Getting ready for the jet age.
FIRST of all--and for a right good question--what is the state of our business? How is air freight, and how is the cartage portion thereof? Frankly, we in Air Cargo, Inc., think that it is good, and that we are all truly progressing forward upon a firm onward course.
Last year, at this same time, we all had three completely abnormal months under our belt: The air freight business, and cartage in particular, had gone through a 90-day period--ending with July--in which we had gratefully wallowed in an excess amount of traffic occasioned as a direct consequence of a protracted strike of Railway Express Agency drivers at six major cities. Everybody in air freight had benefitted from this outside work stoppage, and it was actually as though December had been with us for 90 days in a row. It seemed that any progress beyond such a high-water volume benchmark was a tough assignment, but I'm amazed if we haven't now done it!
The express strike began on April 22 of 1957. Up to the same date of the current year we found that all air freight cartage was progressing at a fat increase of more than 14% in total shipments and 18% in the dollars paid therefor. Comparisons with the strike period then set in and continued through July 21, and while the statistics for 1958 may have looked dismal during this time, I have three facts to confirm that progress was with us nevertheless.
Fact 1 is that upon the conclusion of the strike period we found that 1958 was still ahead of 1957'. The actual dollars were $2,090,815 through the end of July for this year vs. $2,057,612 for 1957.
Fact 2 is that during these first seven months our penetration of the potential air freight cartage market--by this I mean how many of the total of all air freight shipments are actually moved in pick-up and delivery service--had increased by three percentage points. Or, put another way, we have created three more cartage shipments out of every 100 available airline shipments.
These things are solid progress, although not as spectacular as Fact 3, which is simply that, according to Air Cargo, Inc.'s own payment records, total air freight cartage shipments have increased by 20%, and the accompanying dollar volume has increased by 31%, when comparing this year with last, during the post-strike period we have enjoyed beginning with August.
We like such tangible progress and are hopeful it is indicative of putting us all upon the last lap toward another highly successful year.
This kind of visible growth has, obviously, got to be backed up by forward movement upon an onward course--and it has. We can reflect upon this progress in many directions, as confirmed by these examples:
Since last year's Air Freight Cartage Conference, we have completely eliminated any requirement for a telephone cut-off time in some 52 important cities. We have expanded our geographical limits so as to provide pickup and delivery to an additional 25 important military bases--including such strategic ones as Cape Canaveral in Florida; Hill Air Force Base in Utah; and Hamilton Air Force Base in California. We are not only getting prepared for the Jet Age--we are there already--and dealing in missiles and rockets. This particular progress, incidentally, has been accomplished with the complete cooperation of the Military Traffic Management Agency of the Department of Defense, the world's largest purchaser and user of transportation services.
Since last year's Air Freight Cartage Conference, we have also progressed by obtaining a sharply improved level of service in most major cities; we have substantially broadened the true acceptance and use of "automatic delivery" at many, many points; we have dipped our toes into some fairly promising experimentation with containers; we have painted about 85 additional vehicles; we have helped to design a new family of trucks which we hope may be highly useful in the future; we have laid the groundwork for some forthcoming improvements in various procedures; and we have generally tried to live up to that apt GE slogan of progress being our most important product.
Certain of our progress has also come as a direct consequence of last year's Air Freight Cartage Conference. We think the application of cubic dimensional weights to the pricing of cartage services would be considered as progressive in most circles. We know that the establishment of our new Contractors' Advisory Board is a definite forward move upon an onward course. We think that completion of the Drake, Startzman, Sheahan and Barclay survey is just like having money in the bank. * And we have made a certain amount of progress toward the ultimate establishment of door-to-door rates.
Up to this point I have meant to use the word "we" in its broadest editorial sense. I do not mean to report that any of this progess briefly mentioned has been made In airlines, by cartage contractors, by Air Cargo. Inc., or by any one group alone. I really mean that it has been accomplished by the effective efforts of all of everyone.
Nevertheless, I must also admit that we in Air Cargo, Inc., have been going around slapping all the linesmen on the rump, meanwhile urging them to dig in and to get ready for the Jet Age--and at the same time I must also concede that some may well wonder just what has been going on in the backfield. I am pleased to report that Air Cargo, Inc.. is in good posture (to employ a typical Washington term).
We have been moving forward upon an onward course; we have some new faces; we have some new offices; we have some new procedures and standards for the more useful evaluation of both service and rates. We would like to think that our general state of readiness might well be illustrated by the fact that we are currently in the process of amending our Articles of Incorporation in Delaware so as to serve Alaskan carriers immediately upon the Territory's becoming the 49th State.
But we have at least two important forward moves upon our own onward course to report.
First, we have been authorized by our hoard of directors to take such steps as are necessary so as to extend the life of our standard form of cartage service contract to provide for a minimum duration of a full 12-month period in all cases, as opposed to the terms of the existing document, which permit cancellation upon no more than 45 days' notice. In authorizing such a suggested change, our directors were well aware that this year will see almost 50% of all contractors achieving at least five years of service, with more than 20% in the 10-year category, even under the existing 45-day arrangement. Nevertheless, they still join in a desire to provide an even greater measure of security for all in the future of air freight cartage.
Second--and perhaps of more actual impact--we have also been authorized by our directors to progress yet another amendment to our standard form of contract which will have the formal effect of obligating each airline to furnish all cartage traffic which it controls to the contractor so long as the latter is able to perform the service required. Any such like provision is absent in today's arrangement. The establishment of it will become progress of a very real nature. The specific language we have proposed in this regard reads as follows:
"To the extent that the contractor is ready, willing and able to provide the services contemplated herein, each air carrier will employ contractor exclusively for the provision of all such services, unless otherwise directed by the shipper or consignee."
While our directors have already authorized these two progressive contractural changes, it must be realized that Air Cargo. Inc. has 31 delegations of specific authority from 31 airlines, and that each of these must first be appropriately amended, working in concert with 31 Legal Departments. The actual fruits of this progress will, therefore, necessarily be some time in the making, but the fact is that we are embarked upon such an onward course and do feel confident of a valid ability to reach our forward goal.
It appears that we have not yet made too much real progress toward the eventual establishment of door-to-door rates for air freight, and this is strange. We know that most shippers want such service. We know that most receivers feel likewise. We also know that, without a single exception, every one of air freight's direct, and often successful, competitor's offers door-to-door service and rates, yet we are, seemingly, all fouled up in our own inertia in this regard. We do not yet offer the shipping public what we know it fully wants, and we continue to do such nonsensical things as making 3V2 million needless rate computations each year in perpetuating our status quo.
Air Cargo, Inc., made what it thought was a reasonable, though somewhat radical, movement forward toward this particular onward course in early June, when (in connection with another matter) we proposed that pickup and delivery could well be priced at a straight rate per ton-mile, which, in turn, would lend to the ready inclusion of cartage with line-haul air charges for the establishment of door-to-door rates between any and all points.
We documented this proposal by demonstrating that actual Air Cargo, Inc. cartage costs had been but 94/100ths of 14 per ton-mile for the entire industry during calendar 1957. We then quickly recognized that Air Cargo, Inc. contractors do not haul everything, but were able to compute that had their service been hypothetically provided for every air freight shipment which moved during the year, total payments would have risen to a point where they would have become an expense of 2.17 cents per ton-mile for the entire volume of traffic. As a further and last step, we then conceded that no one rightfully knows how many cartage shipments are presently counted twice (both at origin and at destination), and, therefore, suggested that the foregoing figure could even be doubled so as to arrive at an indicated amount of 4.34 cents per ton-mile as providing an ample cushion for full pickup and delivery costs at today's level of both service and rates.
Having fired this proposal, we then fell back and waited. We are still doing so at this time. The lack of any forward progress here seems somewhat discouraging, and at the risk of temporarily alienating some of our many good airline friends, I would suggest that we have the linesmen well dug in--and that the backfield is ready to get into motion--but that doggone little is coming in from the bench for the further forward advance of this particular progression of plays. It is someone's move next. Yet this is clearly not a matter which is within either the province or control of cartage contractors or Air Cargo, Inc.
Within Air Cargo, Inc., for example, we have recently been engaged in attempting specifically to define some future areas of service. In doing so, we find that we firmly believe in high service standards. We believe this is best for the airlines we serve and for their air freight customers. And, by high standards we mean basically these three things:
* Speed and dependability of pickup and delivery.
* Attractive appearance; neatly uniformed drivers; clean and well painted vehicles; and good housekeeping, in general, for its effect on employee efficiency and impression upon the shipping public.
* An attitude of downright intolerance toward errors, carelessness and sloppiness.
We firmly believe that our over-all service will be less costly with such high standards, and that all of our people will take more pride in their own companies and jobs, and will be more alert to do a proper job for air freight as a widely accepted shipping service of which they can be increasingly proud. Such is our own onward course at this time.
This article, from our October 1958 issue, is reprinted in its original form.
By EMERY F. JOHNSON, President, Air Cargo, Inc.
* This is a reference to the Pickup and Delivery Handbook. See last month's issue of Am Transportation, Pane c.
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|Title Annotation:||back pages|
|Comment:||Getting ready for the jet age.(back pages)|
|Author:||Johnson, Emery F.|
|Publication:||Air Cargo World, International ed.|
|Date:||Oct 1, 2012|
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