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Ram C. MenenRam C. MenenSenior Vice President CargoSenior Vice President CargoEmirates AirlineEmirates Airline
ANAMA CONFERENCE
Past President, TIACA
Milan 08 July 2004
Economies are more interdependent than ever, the main driver being globalisation.
We all live in a very globalized world where the only thing that is constant is change.
Centralisation vs. decentralization seems to be the dilemma that most companies face today.
The Global Village
•
Globalization of production is fuelling the growth of the air cargo market.
Globalization of the markets is fuelled by the liberalised trade environment that is being created around the globe. Cultural
differences/preferences are what fuels the need for customisation/localisation.
Global competitive environment means global branding and local customisation/marketing activity are critical to the success of the product-creation of the need!!
In all this, time and timing are very critical to successful market penetration and profitability. This is all good news for air cargo.
Globalization
Production vs. MarketsProduction vs. Markets
Globalization refers to the shift toward more integrated and interdependent world economy.
Globalization has two main components: the globalization of markets and the globalization of production.Globalization of the markets is driven by WTO and GATStrying to create a liberalised market place by tearing down thetrade barriers.
Globalization of production is driven by the need to achieveoptimal cost efficiency in the supply chain by leveraging benefits from cheaper labour/material costs where available.
“Real values are created on spill over of the core business -- i.e. development of ancillary industry around the core”
Time
Price
Yield
Service
Expre
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Information
NEW ERA OF GLOBAL COMPETITIVENESS IS DAWNING
NEW ERA OF GLOBAL COMPETITIVENESS IS DAWNING
“Change will be forced and those who don’t change
are likely to be extinct in the evolutionary process”
Institutional change has got to be based on three things :
Transparency, transparency and transparency
Ready access to information at any time from any place
Companies should be orchestrator of information
Create economies of scope by leveraging economies of scale
BASIS OF CHANGE
Look how Emirates has grown in a free market !!
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“If not, why not?”Most Italian air cargo has to betrucked to outside gateways in
other countries to find economic capacity!!!
A liberalized environment is very critical to growth of any market place.
Aero-political authorities should never find themselves constrained in opening up/negotiating by having
to protect their national carrier.
Travel and commerce are both inextricably linked and a liberalised environment helps catalyze the economy.
What Are The Constraints?
What’s in it for air cargo ?
Growth in globalized production actually triggers the growth in local industries as core production activity requires various ancillary support.
The cargo industry plays a critical role in any activity as it gets involved right from the procurement cycle to delivering the finished product onto the shop shelf.
ROLE OF THE GOVERNMENTS
Governments have a key role to play in bringing in the change
Role of the government should be that of a gardener catalysing the development of business environment
Dr Mohan Sawney, Professor, Northwestern University
Proactive governments will encourage export led growth rather than growth led exports
Role of the customs should be that of a catalyst in growing commerce rather than policing trade