Time just flew as I became involved with Skypak and the operation.
I was pleased to note that I could call on at least fifteen different languages amongst the staff, so if I had a problem with any shipment overseas, I could take advantage of our time zone and speak to a customer, airline or customs officer during their working hours.
The newspaper reading supervisor thought I was being unreasonable by asking him to supervise the processes that were happening in the warehouse.
He left soon after.
I was fortunate in having Helen, the Tongan lady, to help me understand various aspects of the operation. She was a fund of knowledge.
It was time to study the international cargo rates that Skypak was paying the airlines.
All the airlines were members of IATA (International Air Transport Association) and even when I worked for an airline,I found it odd that they supported an operation that was illegal in most countries i.e price fixing.
In 1980 there were 100 members from 85 nations in IATA.
All airlines charged the same rates on the same routes for passenger tickets and cargo rates. If they did offer a different rate and they were reported then they would be fined, so there was a lot of pressure on the airlines not to step out of line.
If you knew your product you could construct a rate that was ‘legal’ but cheaper than the rate for point to point. There was a system called intermediate point rule, which allowed a cheaper airfare to a further destination to be used for the route that you required.
For cargo the description of the goods might be ‘tweaked’ to generate a cheaper kilo rate between two points. For example, newspapers and periodicals are entitled to a 50% discount off the full cargo rate, but if the goods were classed as paper or stationery there might be a special commodity code number that allows for a cheaper rate again.
I had ten years’ experience of tweaking cargo rates to obtain the cheapest rate for the customer, so now I was the airline’s customer, and I knew to what length the airline would go to make a sale.
I loved my job at Skypak.
I requested a meeting with Qantas Cargo, and their sales representative arrived for the meeting. I asked for their best rate to London. The rep did not know my background, I was just the new boy on the block for Skypak.
Cargo at that time was offered as follows – a minimum rate, followed by a high rate per kilo for traffic up to 45 kilos and then a lower rate per kilo over 45 kilos to 100 kilos and then a reduction from 100 to 250 kilos and so on.
Once you knew the rates you could work out break points, for example if the under 45 kilo rate is $5 / kilo and the kilo rate over 45 kilos is $3 a kilo I would multiply the 45 x $3 to get $135, and divide this by the under 45 kilo rate i.e $5 , to obtain the break point, which is 27 kilos.
So, if I had a bag of documents over 27 kilos it was cheaper for me to call the shipment 45 kilos on the paperwork than the actual weight.
In this picture you can see a standard courier bag, which when packed with documents could weigh over 25 kilos. At that time, you would expect a male to be able to lift and handle a 30 kilos bag without assistance. H&S was in its infancy.
Being aware of the airlines ability to ‘bend’ the rules I asked for a simple kilo rate that was a lot lower than the historic high rates that Skypak had been paying.
It was as if I had insulted his family, because he was so indignant that I had even suggested such action. IATA would not allow such rates!
Qantas would be fined!
He then told me, in a roundabout way, that I should support Qantas, because Qantas was the national airline. I then pointed out that it was Skypak International that paid me, and my job was to make a profit, not support the national carrier’s high airfreight rates.
He didn’t even stop for a cup of tea.
The next rep I invited in was from British Airways.
I knew that they carried cargo from Manchester to London by road, for major British & American air freight companies free of charge.
The amount of money that these major airfreight companies spent with various airlines dictated the level of overall service.
The rep was not the BA cargo manager that I had contacted looking for job ideas, but a regular cargo rep. He knew that most of our shipments were being carried by Qantas so there was a big incentive to ‘do a deal’.
We did do a deal and came to an agreement that the paperwork would show the correct IATA rates, and an incentive fee would be paid once a month depending on volumes of kilos shipped.
Suddenly Qantas lost the Skypak International traffic to London, but they did keep the Los Angeles traffic – I did not wish to burn all my boats.
At the end of the first month the British Airways rep came in with a small package for me.
While he was drinking his tea, I opened the package just a little – it was the ‘incentive’ payment. I returned the package to him.
‘What’s the problem’ he asked.
‘It is cash’, I replied.
‘Isn’t that what you wanted?’
‘I wanted the incentive fee as a cheque made out to Skypak International’ I told him.
I knew how the game was played and accepting cash would leave me wide open to accusations of corruption.
Accepting a cheque I was a servant of the company and unable to take advantage of the incentive fee.
Every month I would send a cheque to Max, the company accountant in Sydney, with a note that the enclosed amount was part of Melbourne’s sales revenue.
A few weeks after I started, I was invited to a lunchtime businessmen’s function by the Skypak manager to celebrate Australia winning the Bledisloe Cup.
My problem was that I did not have any idea what the Bledisloe Cup was, or even that it was linked to a rugby match.
My Manager was a Kiwi and was a bit down in the dumps as New Zealand had lost, but he thought it would be good for me to attend and meet people who were also our clients.
The lunch was very nice and the people I met were hospitable and pleasant, but I wonder what they thought of me being at such a function and did not have clue as to what was being celebrated other than Australia had won at rugby.
It was huge learning curve for me.
During my settling in period Skypak was sold to an Australian company called IPEC (Interstate Parcel Express Company).
IPEC had been in business since 1955, and had expanded internationally into Europe and Asia.
IPEC’s purchase of Skypak was followed by extraordinary growth for Skypak and we became the second largest international courier company in the world.
Six months after joining Skypak the Melbourne manager was promoted to manage the Sydney office and I was promoted to the position of Melbourne’s Skypak manager.
Writing this blog, I thought of the Australian migration officer in Manchester who had told me that I was unemployable.
It would have been nice if he had said something like –
Do not look back, you are not going that way . . .
I took the photo on one of our earlier cruises.