Time to fly
After more than 35 years in the air cargo industry, Ram Menen, the head of cargo at Emirates Airline, is calling it quits. In taking early retirement, he’s leaving an industry he helped shape and grow, marked most notably by his career leading Emirates SkyCargo from its infancy in 1985 to one of the top carriers in the world.
When his decision — which Menen said had been mulled over with close business partners for quite some time — was announced in an email to industry friends and associates, officials throughout the industry lauded him as a leading force in the air cargo industry.
“The air freight business is filled with folk heroes who are known for their knowledge, friendliness and likability,” Brandon Fried, head of the Airforwarders Association, said upon hearing the news. “He’ll always be at the top of the charts in my book, and I wish him luck.”
When Menen first entered the air cargo field in 1976, he found an industry that was fragmented, with each member of the supply chain working toward its own aims. During his early years at Emirates, he started seeing these disparate elements come together for the benefit of the whole. Forwarders, shippers and carriers started embracing a symbiotic relationship in the early 1990s, he said, when supply chain management became a hot topic.
“That’s when we started realizing we were peas of the same pod, but with different expertise,” Menen said.
Even with a more holistic approach to air cargo helping clear up some redundancies and inefficiencies, there still existed challenges. The increasing monetary burden of operating planes brought cost efficiency into the foreground as a major planning tool, as economic cycles, which historically spanned five to six years, started to steadily compress.
Since 2000, Menen said there has been an upturn and downturn almost every two years, which has made for rough going in the industry. Simply put, crises have been coming faster and more frequently, and the air cargo industry is constantly forced to adapt.
In down times, air cargo experiences a steady loss in demand as shippers decide to move freight out of the skies and onto the surface. Menen said it’s easy to get caught up in the short-term implications of such a trend, but in the bigger aviation picture, modal shifts come and go.
“Every time we go into an economic down cycle, when time and the cost of capital takes a back seat, that’s when you see the modal shift,” Menen said. “When the markets come back, it all comes back to the air.”
The traditional air cargo structure is also being challenged by shifts in manufacturing. Just as the onslaught of just-in-time manufacturing, mixed with outsourcing, propelled the industry forward, shippers are beginning to bring manufacturing closer to home. Nearshoring and other recent trends still won’t harm air cargo, Menen said, because smaller components will always be made in foreign countries and flown to the United States or Europe to be assembled.
“You’ll probably see a cycle shift of manufacturing going back into places like the United States, and it will also happen in places like Spain and Italy. But you still need cost efficiency,” he said. “These components are going to fly because technology is evolving so fast, you don’t have time.” With an ever-increasing race for the newest, hottest gadget, speed to market has become of paramount importance; that’s where air cargo comes in.
Menen also steps away from an industry that’s having to grapple with the very machinery it relies on. As the price of fuel continues its inexorable rise, the cost of running old freighters is becoming prohibitive. A traditional source of new freighter capacity — converted passenger planes — is also becoming increasingly more costly because newer passenger aircraft cost more to convert.
“In the past, old passenger airplanes converted to freighters economically, but the newer airplanes are so optimized right at the beginning of their lives that the cost of these conversions is going to be quite high,” he said, adding that freighter operators are having a rough time in the current market and may continue to be squeezed.
Of course, any mention of Menen’s impact on the aviation industry has to include his time at The International Air Cargo Association, an organization with which he has been active with since its founding. He served as president and chief executive officer in 1995 and 1996, and is still a trustee of the organization.
“Throughout his years with TIACA, he has not wavered in his enthusiasm to move the association and the air cargo industry forward,” Daniel Fernandez, the association’s secretary general, said. “He has never failed to frame challenges and setbacks as opportunities for growth and development.”
Menen credited TIACA with moving the industry to new heights, helping unite disparate parts of the supply chain together toward common goals. As a member of TIACA, he most heartily championed e-freight and the development of the electronic air waybill, which he said will help the industry achieve so much more than simply saving paper.
TIACA is also involved in educating the next generation of cargo officials, something Menen sees as a valuable asset. Personally, he had to learn about cargo as he went along. Now students are able to come to the industry with fully formed ideas about supply chain management and other aspects of the business.
“When I came into the cargo industry, everybody who had come into the cargo field … we all came in here by default,” Menen said. “Now people are actually coming out educated and specialized. That’s a major change that has taken place.”
Menen said he will continue working as hard as ever until his last day on the job in June. Once retired, he’ll divide his time between summers in Europe and winters in Kuala Lumpur, with Luxembourg as his home base.
While higher ups are still searching for his replacement, he is confident that when he leaves Emirates SkyCargo will keep moving forward.
“We are in very, very good shape as a company. My team is a solid team,” Menen said. “I can walk away, and nothing’s going to change.”