Finnair Cargo’s head of global sales, Fredrik Wildtgrube, regularly takes the stage at international air cargo and logistics events and he's frequently quoted by industry journalists. We've rounded up some of Fredi's most incisive recent statements on some of the hottest air cargo topics.
Fredrik Wildtgrube on...
Electronic air waybills
E-air waybill penetration must rise if the logistics chain is to capitalise on the opportunities offered by globalisation, not to mention meeting the rising demand for speed from customers. Almost 50% all cargo globally is still moving on hardcopy air waybills and the industry is facing a serious challenge to manage new speed expectations because of that.
More from Fredi on the growing demands being placed on air freight here.
A new way of thinking about EUR-pallets
Sometimes it’s hard to envisage just how massive the air cargo industry’s responsibility is and the value of the daily flow of goods, so I get people to start small with what’s known as a EUR-pallet. You’ll fit approx 1000 phones on one EUR-pallet and with a high-end smartphone costing around 700-800€, even above 1000€, that means the retail value of one EUR-pallet is 1 million euros. In our terminal’s automated storage and retrieval system we’ve got space for 4000 EUR-pallets. Puts things in perspective – doesn’t it?
How the industry responded to Finnair Cargo’s futuristic COOL terminal
One funny thing I’ve noticed is that there are huge numbers of air cargo leaders and logistics customers all over the globe who constantly ask me how we got backing for such a huge investment in the form of the new COOL terminal. It’s because Finnair knows terminals like COOL are the future of air cargo and air freight represents a sizeable chunk of Finnair’s revenue.
The COOL Control Center in Helsinki
It’s at the heart of our operations and connects everything together: data and humans, insights and actions. It is our jewel in respect of digital, a vision of the future and it is the axle of our data-driven processes.
More here from Air Cargo Week on how Finnair’s not growing old at 95.
Robotic process automation fixing special handling code errors
By correcting data inaccuracies from further up the logistics chain we are providing a better service for customers and ensuring the right cargo handling and more efficiency in the chain. The benefit for customers is enormous given what a big problem this is for the industry.
More here on how Finnair Cargo is fixing data errors twice as fast with automation.
Faster speed versus cheaper price
The new lead-time target for international e-commerce shipments is now set to 3 days, from order penetration point to door delivery. The supply chain solution in which these e-commerce products move is also changing shape. There are fewer distribution centers, fewer middlemen and more direct shipments. In other words, more of a direct air freight service to promote speed.
During the previous decades the industry made great efforts to make air cargo cheaper – now it’s time to make it faster. It’s very evident that demands are shifting and low cost is not wanted if speed is being sacrificed.
Why Finnair Cargo has moved their head of global sales from Finland to Shanghai
At Finnair Cargo we believe that work is not tied to a place or a location, it’s more connected to time – delivery on time. This is what customers expect from us, that’s what we expect from our teams. This is the reason we are spreading our leadership team more efficiently across our network, rather than locating everyone at our headquarters in Finland. The natural way to kick this off is by moving the head of global sales to Shanghai, so that’s where I live since the start of 2019.
I’m very excited about the opportunity and looking forward to meeting more industry people, customers and partners – and discovering better ways to differentiate our service to meet with rapidly changing customer demands. With this move we are rubber stamping our commitment to China and growth in Asia, which is worth some 75% of revenue for us.
Why 15 years wasn’t the only celebration for Finnair Cargo in Shanghai in 2018.
His experience before Finnair Cargo
Growing up in Finland, which is an island in many ways, I quickly understood the need for well-oiled logistics by air, land or sea. Logistics and supply chain is a people-business industry and I was at home as a forwarder because the industry knows the importance of a happy customer.
Later, during my time with Nokia and Microsoft I fell in love with supply chain and logistics when I saw up close the impact of a good logistics and supply chain execution and how it can transform business and customer decisions.
At Finnair Cargo, I’ve been able to bring the voice of shipper and forwarder to the table. Working in senior roles at forwarders and shippers taught me that there are companies in international commerce that don’t consider supply chain an investment but simply a cost, but I think it’s an achilles heel to overlook delivery and final execution.
The supply chain is not so much about cost, but more about risk management and finance. It’s an investment. The supply chain is the long backbone of a company and in good shape it can support everything in a company, from working capital, cost, revenue and sales, to inventory, sales and operations planning, customer service, and go-to-market time.
Risks and challenges for the industry in 2019
Looking ahead at the status of global air cargo, there are some uncertain elements for this year and possibly also for the years to come. There are ongoing trade wars and there is the unclear impact of Brexit, although at Finnair we’ve got a specialist Brexit team. This certainly presents an interesting cocktail for the logistics and supply chain market, but gladly things improved in the second half of 2018 for Norwegian seafood producers exporting to China (lifting of tariffs) and volumes have been at record levels.
The people in the industry
What I love the most about our industry is the people. The way people have built relationships to bridge the world and connect businesses to successfully enable world commerce. The never-ending passion to keep pushing forward and wanting to deliver a good service to customers, sometimes in the most difficult of circumstances and environment.
The air cargo market in general
The air cargo market is never easy, no matter if it’s growing or declining. We are an expanding company and our growth is supported by our relationship with customers. That’s how we can stand out. Some say that when you take care of your customers the rest will take care of itself. That’s too simplistic, but if you focus on the rest first and your customers last, it’s a recipe for disaster. We at Finnair Cargo want to make sure we have our priorities straight and our focus in the right order. The industry is very competitive and customers easily change provider if things don’t work, which requires us to win their trust with each and every shipment.
Finnair Cargo’s pharma hub at Brussels Airport
Brussels Airport has a dedicated strategy and strong position for the handling of pharmaceutical cargo. It has been continuously developing its position in the pharmaceutical segment over the past years. The airport has gained vast experience in handling and processing pharma and from Finnair Cargo’s point of view, it’s crucial for us to operate in a hub that supports our needs in the best possible way.
More here on why Finnair and Brussels Airport are a match.
The industry’s attitude to digital
It’s clear that to speed up the air cargo supply chain it’s not enough to send emails and call it digital. Information must hit all stakeholders in the chain, from shop floor to office, from planning to execution in the right format and prior to freight arrival.
It is critical that the data we collect is shared because at the end of the day the whole industry will benefit if the customer is the winner. A clear challenge is all the legacy systems in our industry that are not equipped to manage data in the way required. To support the change, we should make the case that leading with data is much easier, because there’s less guesswork involved and there’s much more time to prepare and adapt. Accurate data ensures the smooth flow of goods, prevents delays in our service and ensures goods are handled correctly.
I don’t see a cargo future without significant investment in digital tools. I’ve said before that supply chains utilising digital tools are not necessarily fast, but all fast supply chains use digital tools. An important distinction. In other words, stakeholders who want to follow the global market trend and provide faster air cargo services must not fight digital tools. Digital is the missing link to guarantee end-to-end speed, quality and continual improvement in the industry.
How 2018 went for Finnair Cargo
In 2018 the air cargo market continued to grow overall, but at a slightly slower speed than in 2017. The widely recognised over-capacity in the market had an effect on air cargo unit revenues, although cargo yields began trending upwards after the midpoint of the year.
Our operations grew in-line with capacity additions and a buoyant cargo market in Japan and Finland contributed significantly to strong year on-year growth. Cargo revenue grew 4.8% to 206.9 million euros, up from 197.4 million euros on the previous year.
Our new COOL Nordic Cargo hub we took into operation in the fourth quarter of 2017 and the ramp-up of the new terminal operations was still visible in the first half of 2018 when cargo revenue grew more slowly than other Finnair revenue streams.
In the second half of the year we made several records in cargo tonnes handled. Available scheduled cargo tonne kilometres increased by 17.1 per cent, and revenue cargo tonne kilometres increased by 11.5 per cent. The volume of cargo carried increased by 0.7 per cent to 158,140 tonnes (157,028).
Finnair’s financial report 2018