Ram Menen Pushes for Change in Air Cargo
There’s no arguing that Mr. Ram Menen is a veteran and a legend of the airfreight industry. As the head of Emirates’ cargo division since the airline’s inception in 1985, Mr. Menen built Emirates Skycargo from the ground up. Without his pioneering vision, Skycargo wouldn’t be the undisputed industry behemoth it is today.
In 2013, Mr. Menen decided that after nearly 40 years in the industry, it was time to take a well-deserved early retirement. Today, he has taken a step back from air cargo, but he still keeps an eye on what’s happening in the industry. He continues to be a valuable source of industry insight and ideas for the future of airfreight.
One of the issues Mr. Menen is most concerned about at present is the next generation of airfreight leaders. It’s common knowledge around the industry that there are insufficient numbers of young professionals coming into the air cargo business. The industry is not a very ‘sexy’ sector for the next generation; working in airfreight involves long hours and hard work. As such, the next generation’s brightest minds are looking elsewhere. As the old guard begins to reach retirement age, what will happen in the future?
“It’s a worldwide syndrome. We’re not attracting enough talent coming to our field,” says Mr. Menen. “Even though we’ve created more education programs, and lots of colleges have introduced courses in logistics, it’s not enough. When the kids graduate, they don’t find our industry sexy enough. Instead, they go across to work for the manufacturers, who have realized that supply chain management is key to their success.”
What would it take to draw more great young minds into air cargo? How can we make the industry more attractive? It’s a problem for which there’s no easy solution, but Mr. Menen has a few ideas. “First, we need to concentrate on our own training programs. We need to provide training programs for new graduates that will ensure that they have a good skillset for working in air cargo. With this, we can also provide them with a good opportunity for career progression in the industry.” Ensuring that young professionals have the skills and opportunities they need to enter, then move up in the industry would undoubtedly do a lot for talent retention.
But it’s not only about education. The airfreight industry also needs to make major changes in order to keep up with modern times. Technology has changed our lives dramatically in the past few decades, but the air cargo industry has been slow to catch up. One important example comes from the passenger side, where e-tickets have been the norm for years. On the cargo side, however, paper air waybills are still dominant.The prevalent use of outdated technology not only makes it harder to attract pioneering young minds, it also prevents the industry from achieving new efficiencies – efficiencies that it needs in order to survive the cutthroat market environment.
The world is going to be a whole lot different as we go forward, but the industry has been very slow to accept electronic transactions. We’re training new kids to use old-fashioned, out-of-date processes.
“With technology, the world today is very different from when we first started our careers in air cargo. This is where the conflict comes from – the people on top, who are driving things, have been slow to change, while the younger generation is quite comfortable with new technology. We need to ask ourselves if we, the older generation, are really qualified to train the newcomers. This disparity creates friction, where you get the leadership pushing one way, while the rest of the team is either standing still or moving backwards.” This not only discourages newcomers but also holds the industry back.
We can see the need for new blood in the industry, but what about new technology? Why does Mr. Menen believe so strongly that new technology will play a crucial role in the future of the air cargo industry? These days, businesses everywhere have become so focused on cutting costs – and the air cargo industry is no exception. With declining yields and decreasing returns, some companies find it hard to justify the added expense of new technology systems. But this kind of short-sighted thinking would be a mistake.
“This was the problem I was facing at Emirates in 2002. I looked at our systems and said, if we don’t implement a next-generation system, if we don’t make that investment, we would have to make a huge investment in manpower instead. At that time our volumes were growing around 10-15 percent per year. To manage that growth, we would have needed either a huge amount of manpower, or new systems that would allow us to improve productivity.
“At the end of the day, no matter what kind of business you’re in, you need to look at your unit cost. And the fact is, bringing in a next generation system can actually make your processes more efficient and reduce your unit cost,” says Mr. Menen. In the long term, it pays to make that initial investment early on. You’ll make back the cost of that investment with major improvements in processes, productivity and efficiency. These time and cost savings can help to make air cargo a more attractive option for shippers, some of whom have been turning to sea freight as a cheaper, albeit somewhat slower, alternative.
It’s not just the next generation and the old guard that should come together to send the industry into the future. The cooperation and open communication between shippers, freight forwarders and airlines are crucial for the industry’s success.
Attracting and retaining new talent, managing declining yields and revamping outdated information systems – it’s all vital to the air cargo industry’s future success. But Mr. Menen believes that greater industry-wide collaboration would also have a profound benefit. It’s not just the next generation and the old guard that he hopes will come together to send the industry into the future. He also believes that cooperation and open communication between shippers, freight forwarders and airlines are crucial for the industry’s success. Currently, the status quo involves closed doors and reluctant sharing of information; but whole-hearted collaboration could benefit everyone involved.
“Everybody has got to change, and it should start from the shippers. Everyone in the industry – shippers, freight forwarders and airlines – all complain about lack of transparency,” Mr. Menen explains. “But the shipper is best placed to create that transparency, because in today’s business world they’re the ones who have the entire picture.” Enhanced transparency provides every player with greater insight into each step of the transport process. With improved transparency and cooperation between these parties, fully optimized supply chains would be well within reach. It’s a win-win situation for all.
In these tough economic times, the future of the airfreight industry hangs in the balance. It’s not enough to simply maintain the status quo. To ensure the continued success of this industry, the time has come for the industry to embrace change.