AVIATION INTERVIEW WITH WALTER CULAS
Chairman of Airfreight Forwarders Association of Malaysia (AFAM)
After being in the airfreight industry for 48 years and chairman of AFAM for 28 years, he has seen it all and done it all. Despite achieving respectable veteran status in the industry, he still has no plans to rest on his laurels. Walter Culas shares with AIRLINK his steadfast and resolute approach to leadership in navigating the industry through the pandemic.
What is the background story of AFAM and its role as a mouthpiece of the airfreight forwarders industry in Malaysia?
The main role of AFAM is to represent all the interests of the members and to articulate their problems to the relevant authorities. AFAM provides a platform for our members to discuss relevant issues and government policies, whereby we consolidate a commensurate voice to the government agencies. We deal directly with 28 government agencies and government bodies such as Royal Malaysian Customs (Putrajaya HQ), Ministry of International Trade and Industry (MITI) and the Ministry of Transport (MOT).
In the committee, we vet the requests of our members and then proceed to engage with the relevant parties when we have come to an agreement.
I’ve been chairman of AFAM since 1982, and a member of the association since 1982. I lead the organisation in requesting for facilities to the government on behalf of our members. For example, in 1996, AFAM was important in establishing POS Aviation as the second cargo terminal operator for the logistic industry in Malaysia after MAB Kargo.
What has been the growth of the air freight industry since the beginning of the pandemic? And what sorts of goods have increased during this time?
In terms of specific goods, pharmaceutical, medical, and rubber glove products as well as perishable cargo have increased. However, total cargo volume in terms of tonnage has reduced drastically in the second quarter of 2020 (2Q20).
How important is the role of technology for the airfreight logistics business and what steps are taken to advance this?
In our industry, it is indeed very important. However, we believe the level of technological integration for the government agencies is still found wanting. In 2013, the government had agreed to this, however no measures have come into fruition yet.
We believe that there is a need to integrate any system that is to be implemented; our biggest obstacle is that we have issues integrating our IT systems with theirs as well as that of other players in the value chain. We were fortunate that in the past, foreign-based companies such as UPS, DHL Express & DHL Global Forwarding, FedEx, KWE, Tasco, Kuehne Nagel, Bollore, and Nippon Express have brought their technology with them thus benefiting the industry.
One of the issues that I have previously alluded to the government regarding tech is that a modern IT system ought to be implemented for the Customs Information System. Unfortunately, at this point in time, the system is still paper-based and very much backwards in my opinion.
The government has provided some form of improvement to this, but there is still a lack of integration throughout the related industries and have instead cost us more time and expenses. For example, the sea freight industry also has a totally separate system in addition to the fact that they operate largely in silos.
At this point in time, it is certainly a tall order to consolidate all the stakeholders in the value chain to have a cohesive integrated system. Unfortunately, different players have different ideas with how they want to employ technology.
How has AFAM consolidated its members against the issues arising during this pandemic?
It is part of AFAM’s duty to advise each of our members on an individual basis in accordance with their business models. As part of the essential services category, our operations have not been affected by the MCO, thus we have been quite busy with the airport and cargo side. We have been pushing for discussions with the MOT, Royal Malaysian Customs as well as MITI to further press our requests to the government.
At this moment, we have not come into a consensus. But you can trust me to keep pushing forward until they get sick of us!
What are the statistics in terms of cargo movements in Malaysia in the recent months?
Among the three cargo terminal operators (CTOs), MAB Kargo’s tonnage has reduced by 24% in 2Q2020 quarter-on-quarter (q-o-q); POS Aviation recorded a reduction of 33.7% q-o-q and Ground Team Red (GTR) suffered a reduction of 87.6% q-o-q.
On the domestic front, cargo movement has not been good as exports, imports and transfers are generally on the downtrend at airports throughout the country. However, one of our CTOs, POS Aviation has experienced an uptrend at their East Malaysia stations, namely Kuching and Kota Kinabalu.
As long as the pandemic looms over the skies, it will be awhile until global trade returns to pre-pandemic levels.
What is your market outlook for the airfreight industry moving forward?
We would say the long-term market outlook is good. As we deal with international players, once the international market outlook recovers then we will likewise benefit accordingly. However, as of late, we are losing some investors to Indonesia. This is due to the incentives provided by their government for the industry.
In our opinion, the Malaysian government ought to go back to the 70’s when they were giving out ‘pioneer-status’ to industry stakeholders and further incentives such as tax-free measures for more investors to invest directly into the airfreight industry.
What are your planned measures for AFAM and the industry moving forward?
We are in the midst of various discussions since the beginning of the pandemic. However, because of the changes in government over the past few years, it has resulted in many hurdles for us, whereby many policies and requests that we have put forward have not moved and there is a lack of cohesiveness within the governing bodies themselves.
Our stance is that working in terms of silos is not the way we should go, the way forward is to be united and transparent. Moving forward, all measures taken by us will be based on statistics in the coming months.
You have been in the industry for quite some time. What has been your greatest achievement thus far and your ultimate vision for the industry in this region?
After being in the industry for 48 years, I have learnt that being a voice for the industry and getting policies approved is an achievement in itself for me. In AFAM, we believe in being good listeners and striving to resolve our member’s issues. Whatever AFAM has achieved in the past and will achieve is through the participation of the committee and also the dedicated staff of the association; I would like to commend my Executive Secretary, Rosni Mohamed Rasul.
My vision is to attain mutual cooperation throughout the industry. I would like to commend the efforts of previous Minister of International Trade Tan Sri Rafidah Aziz, whom made decisions for the industry without fear of favour as well as former Transport Minister Tun Dr Ling Liong Sik, who was a guiding light in the industry during his tenure. From Malaysia Airports, I would like to commend former Managing Director Tan Sri Bashir Ahmad, former Senior General Manager (Operations Services) Dato’ Azmi Murad, the current GCEO Dato’ Mohd Shukrie Mohd Salleh, Acting SGM (MA Sepang) Mohd Arif Jaafar, and Head of Guest Advocacy Mohammad Suhaimi Abdul Mubin to whom in the past as well as in the present guided the industry in the right direction.