Boom times gone for good?
Shippers have permanently turned their back on airfreight as the sophistication of their supply chain grows, reveals Robert Mellin, head of supply and logistics at Ericsson.
Speaking at the TIACA Executive Summit in Dallas, Mellin revealed the telecommuni-cations giant had a target this year of sending 80 percent of its products by surface freight, instead of the 20 percent it used to a decade ago.
"We achieved that last week," he said. Looking around the delegates, he added: "I cannot see any smiling faces here."Over 70 percent of Ericsson's logistics spend is on airfreight, despite it only accounting for 20 percent of its volumes. "Those numbers speak to me," said Mellin. "As a shipper, you are suicidal if you do not get rid of airfreight."
He explained the source of the company's shift: the Icelandic volcanic ash cloud in 2010. "I loved that volcano. We had to go from air to surface in one day. It forced us to think differently, to look for ways to go under the cloud. It forced us to find a new solution and forced the customer to have a dialogue with us about lead times. It worked. Then we realised we could swap between different modes without constraints and that gave us flexibility to adapt to other situations."
For the full story read the 29 April issue of Air Cargo Week (Link: April 29 ACW)