Turkish Cargo rises as new global air bridge and pharma carrier

The 2020 pandemic kept the airfreight industry extremely busy transporting life-saving medical supplies and other essentials. Their critical mission remains along with the additional role of distributing billions of COVID-19 vaccines to save people andto facilitate trade between businesses and economies to avert another global crisis.

Air cargo and its ecosystem are no doubt critical to pandemic response worldwide, supplying population needs, saving lives, and the success of the global economic recovery efforts.

“Since the beginning of the Covid-19 pandemic situation, air freighters have been of vital importance in keeping global supply chains functioning for the delivery of time-sensitive materials and medicines. Within this framework, Turkish Cargo has been adapting its operations in terms of dedicated cargo freighters along with the utilization of cargo capacity in passenger aircraft through its wide network around the world. Our company ensured a global air cargo bridge worth 130 thousand tons in 2020 and 101 thousand tons for the period of January-July 2021,” said TurhanÖzen, Chief Cargo Officer, Turkish Airlines.

Turkish Cargo, the cargo brand of Turkey’s national airline, was there to fill in the gaps to ensure the uninterrupted supply of urgent medical supplies like masks, PPE, oxygen, ventilators, medicines, among other things, across the world.

Worldwide, the cargo carrier’s teams worked round-the-clock, dedicating their precious time and energydespite the threat of the virus, to ensure the safe transportation of these essential goods for humanity’s sake.

By end 2020, Turkish Cargo’s revenue climbed up by 143.4% compared to 2019 and its global tonnage share rose from 5.3% to 7.2% during the same period. In the first 7 months of 2021, its revenue further increased by 10.5% and global tonnage share for this product group rose from 7.4% to 8% compared to the previous year.

And in no time, Turkish Cargo has successfully transitioned itself as one of the world’s three largest pharma carriers.

“During this period, there has been a huge demand on medical supplies and Turkish Cargo transported medicines, masks, medical equipment, Covid-19 vaccines and humanitarian aid all over the world with care and reliance. At this point, Turkish Cargo played a major role in maintaining critical air connections by prioritizing these shipments with its increasing responsibility in parallel with its rising market share. Turkish Cargo achieved a revenue increase of 143.4% in 2020 compared to 2019 in transportation of medical supplies, and raised global tonnage market share from 5.3% to 7.2% by the end of 2020. In the first 7 months of 2021, revenue increased by 10.5% and global tonnage share for this product group rose from 7.4% to 8% compared to the previous year,” Özenexplained.

Transition to SmartIst, Istanbul’s mega cargo hub

This year, Turkish Cargo is preparing for bigger things to come with its scheduled move to Istanbul Airport, currently the world’s biggest airport, where the airfreight carrier will have its mega cargo facility designed to handle as much as 4 million tons annually.

SmartIst is set to be fully operational this year and is aimed at further enhancing the brand’s activities in the years to come.

“Turkish Cargo’s SmartIST facility, which will provide a capacity opportunity of 2 million tons on annual basis at the first phase, will achieve a capacity of 4 million tons on annual basis at an area of 340,000 square meters upon the completion of the second phase,” said Özen.

How does it work? The Turkish Cargo CCO further explained, “Turkish Cargo’s SmartIST facility will be equipped with Industry 4.0, Logistics R&D, Innovative studies and technological infrastructure. Two different systems, will be used, namely PCHS (Pallet Control Handling System) and ASRS (Automatic Storage and Retrieval System), for automation of the processes.

“PCHS system will be used to store the ULDs, which are unloaded from the aircraft or ready to be loaded on board the aircraft, and to transfer the same to the intended location automatically. ASRS system will be used to store the smaller cargo packages, comprising the contents of the ULDs, and to transfer them to the intended location automatically, if and when so needed.  These brand-new systems use their own artificial intelligence to optimize their movements, resulting in minimization of any intervention by employees and therefore enhancing quality of service.

“The new facility will address the needs of the market and maximize customer satisfaction by ensuring that all special cargo processes, from acceptance to delivery, in private areas (perishable, pharmaceuticals, valuable cargo, live animal transportation, express, e-commerce cargo) are carried out with the highest possible standards of quality.”

SmartIst will be powered up by integrated smart technologies such as Augmented Reality, Automatic Storage Systems, Robotic Process Automation and Unmanned Ground Vehicles, thus, ensuring seamless fast and seamless operations at the mega cargo hub.

Read on the rest of our interview with Özen, the aviation and cargo stalwart leading Turkish Cargo to achieve greater heights even in uncertain times.

You’re uniquely positioned with two hubs— Istanbul Airport and Ataturk. Can you please tell us what’s focused on each hub and how important are they in your mission and quest to position the brand as among the top 3 air cargo companies in the world?

Due to global transformations, the rapid development of e-commerce with technological developments and the fact that the word ‘speed’ has become even more important in trade, air cargo companies needed to serve with more capacity.

The increasing of air cargo capacities also affects airports directly. While air cargo companies are trying to expand their fleet and flight network, airports have turned to increase their storage capacity, technology, modernization and digital transformation processes.

As Turkish Cargo, we respond to the needs of the sector with our agile structure by closely following global changes and technological developments. Within this framework, we have built our SmartIST facility at Istanbul Airport, which is becoming a high-end logistics attraction center, in line with the carrier’s long-term targets.

In the upcoming period, Turkish Cargo will then be moving to SmartIST, where the entire operations will be carried out under one roof at Istanbul Airport.

When it comes to carrying pharmaceuticals, Turkish Cargo is a name to be reckoned with. Kindly share with us your accomplishments in this area, particularly in terms of handling COVID-19 vaccines.,

During the Covid-19 pandemic, Turkish Cargo, largely contributed to the sustainability of the global supply chain by transporting shipments of food, pharmaceuticals, medical equipment as well as shipments for urgent needs from/to Turkey and the four corners of the world.

With the start of the vaccine distribution, Turkish Cargo, successfully carried more than 300 million vaccine doses, which is approximately 1500 tons, from the vaccine production centers to destinations in its wide flight network, representing over 600 flights.

Our flag carrier brand transported the Covid-19 vaccines to key and certificated destinations such as Turkey, Baku, Rome, Belgrade, Copenhagen, Beirut, Miami, Sao Paulo and Mexico City, creating a global corridor between more than 400 destinations. With 30 years of experience when it comes to special cargo transportation, Turkish Cargo proved its capability with vaccines that have different transportation requirements by carrying 7 different Covid-19 vaccines in containers with special cooling systems.

With these successful operations, Turkish Cargo increased global market share to 8 percent in pharmaceutical transportation and became one of the most active carriers in vaccine transportation.

What are your plans to make your pharma capabilities and facilities stronger now that it’s certain that air cargo’s main mission of distributing vaccines and other vital medical supplies remain crucial to humanity’s survival? (Please include info on people training, certifications, etc.)

Turkish Cargo’s Istanbul Hub has special storage areas for temperature-controlled medicines, vaccines, medical supplies and food products. All products are monitored with hygienic and standard maintenance processes.

Perishable cargo with sensitivity to temperature are stored thanks to special storage rooms with four different temperature ranges at the cargo terminal equipped with high standards. Temperature values of special cargo rooms are monitored via the telemetry automatic system, and there is a system in place which is capable of sending an automatic message in case of any alarm caused by any difference in the temperature range.

Thermal covers and thermal dolly services are provided upon customers’ request for protection against external environment conditions for perishable cargo with sensitivity to temperature. For temperature sensitive products, thermal dolly is used as an auxiliary equipment to prevent any deterioration in the contents of the products during carriage from temperature-controlled areas to baggage area or vice versa for operations with a connection period of up to 4 hours.

Perishable cargo is monitored under an agreement with the Active Cold Chain brand Envirotainer, which provides our customers with active temperature-controlled containers and QEP (Qualified Envirotainer Provider), referring to the accreditation proving that an airline company is capable of performing the Envirotainer transportation operations successfully at stations.

Turkish Cargo, carries out operations at top level by holding the “CEIV Pharma” certificate issued by IATA CEIV (Center of Excellence for Independent Validators). We continue to take off with our special products established for shipment of pharmaceuticals and medical supplies, and access more than 300 destinations in 127 countries across the world.

Larger terminal and better service at the New Mega Hub;

• 6,600 m² storage area for time and temperature sensitive products,
• 2,000 m² (+5°C) for pharmaceutical products,
• Cold storage: (0°C/+4°C) total 525m² –  (+2°C/+8°C) total 1.100m²  –  (+15°C/+25°C) total 350m²  –  (+20°C) total 2475m²
• Frozen storage: (-15°C/-25°C) total 150 m²

What are the biggest challenges facing the air cargo industry in our current situation? Please share your opinion on how this can be addressed.

The issues, experienced currently by the air cargo industry can be listed under a few main topics.  Such issues involve the topics, namely digitalization, capacity, security and safety, liberalization, sustainability and intra-industry cooperation, respectively.

Digitalization

Air cargo industry has still not taken the steps expected to be taken for the digital transformation. The significance of the digital transformation is demonstrated by the industries such as banking that has overcome the issues which have arisen in global terms and been observed in particular during the course of the pandemic.

Continuing to work considerably on paper at the present, airline industry experiences quality and transparency issues in integrated supply chains such as forwarders, shippers, ground handlers and truckers.

As a solution for such issue, e-AWB and e-Freight initiatives, which the airlines have a key role, have made a noteworthy progress during the recent period of 5 years.  Similarly, air cargo industry, in which speed and safety have a substantial precedence compared to the other modes, has made a great progress towards the capability to track the shipments instantaneously and communicating the shipment movements instantaneously to the consignor and the consignees.

Finally, the use of robots at the warehouse processes have started and the processes have been automated as led by the E-Commerce and Express industry, and all stakeholders have headed towards such type of investments due to the cost savings as based on the acceleration of the operations.

Capacity

The outbreak of Covid-19, which has been declared as a global pandemic in March 2020, had negative effects also on the air cargo industry just as it had for all of the other industries.  The travel restrictions, exportation limitations and measures taken for sealing the borders, started to be implemented for the purpose of fighting against the pandemic, have notedly affected the international airliner traffic.

The flights operated by the airliners that carry only cargo (paxfre or preighter flights), which have been started in March 2020 by the airlines as a dynamic solution, can be given as an example as the solution for such issue.

Apart from that, we observe that airlines have started to make use of their freight fleets more actively and also that the orders for the freighters have also increased worldwide. We are of the opinion that such solutions will provide significant contributions to the offering of such needed capacity to the industry.

Safety and Security

We can summarize the safety and security issue in the air cargo industry as the differentiation of the guidelines and interpretations established by the governments and the associations and also as the adaptation of the security and safety processes applied during the course of the shipment of the cargo to the new situation related to the pandemic.

New security screening technologies are being considered but the follow-up and coordination are required for the purpose of ensuring that the stakeholders of any and all business models in the air cargo industry act in accordance to new regulations. As a solution for such issue, standardization and enhancement of the cooperation between all stakeholders in the industry.

Sustainability

Along with the global warming, quest for clean energy prompts the search of alternative resources in respect of the environmentally hazardous fuels in terms of carbon emission. Investment in such fields by the companies will place significant burdens in financial terms, coupled with the ACCF (Air Cargo Carbon FootPrint) program, implemented by IATA for the purpose of accomplishment of its projects under the sustainability heading. Revenue-decreasing factors may be encountered in the fields such as reduction of the tonnages being carried (due to fuel consumption) and modernization of the fleets due to the risks of sanctions by the regulatory and supervisory supranational organizations. In respect of such issues, companies managed to reduce the fuel costs further, in particular, with the increase at the factory-fresh and younger freighter fleet during the recent years. 2% of the global carbon emission is generated purely by aviation; given the fact that the share of aviation is lower as compared to that of maritime transportation, which constitute 4% of the global carbon emission, air cargo is the mode of transport at which the carbon emission per shipment is the highest. All stakeholders of the air cargo industry will also have a key role in the accomplishment of the carbon emission targets set for the aviation industry.

How important is digitalization in the industry as we thread through the new normal?

The future of air cargo is based on technological developments and digital transformations.

In the last five years, several air cargo companies have involved with virtual integrations due to the digital developments. Therefore, we think that the air cargo sector has entered into a rapid development in digitalization and technology. We think that this will continue rapidly in the upcoming periods.

The air cargo industry is growing very rapidly. An estimated 7.4 billion parcels are flown each year, and approximately 2.5 million lives are saved every year thanks to vaccines shipped via air, according to the IATA. This huge industry is changing and developing still. The development of technology enables new trends to emerge.

Air transport new trends; Next generation fuel types; ‘Sustainable aviation fuel (SAF)’, less emissions, more efficient aircraft and of course; ‘The rise of e-freight’, Fuel savings with light pallets and containers; ‘Lightweight unit load devices (ULD)’ an ‘Investments in carbon offsets’ etc. The increase in sectoral competition also increases the tendency to new trends.

Customers of the modern world demand complete and perfect visibility, faster, safer and more effective transportation, online tracking and much more control on where, when and how their cargo are moving. The air cargo stakeholders have already adopted the emerging technologies such as Virtual Reality, Iot (Internet of Things), cloud and E-Freight in the modern innovation journey, and what’s more, wearable products have started to be used for Big Data analytics, block chain, drones and animals.

Air cargo communities that can keep up with technological developments and complete digital transformation processes will be positioned as leaders in the sector.

Speaking of digitalization, can you tell us more about Turkish Cargo’s investment on innovations and technology?

Turkish Cargo always strive to gear up ourselves in order to provide better service to our customers and target to be one of the best air cargo carrier in 2023.

Within the scope of this important goal, we took good steps towards digitalization and one of them is of them is our robotic process automation. We have been running a robotic process automation (RPA) for our internal business processes known as RPA since 2019. Currently, we have 5 different robots named Alpha, Bravo, Charlie, Delta, Foxtrot which are responsible for a total of 10+ different processes in Turkish Cargo for now and adding more and more processes as we go along the way.

For our new cargo terminal SmartIST is the biggest project we are processing in Istanbul now and target to move all operations over to this new facility this year. It is built to reach 4m tonnes of annual capacity when all phases are completed. Inside the SmartIST, we also aim to use modern technology such as automated storage systems, 3D ULD planning and unmanned ground vehicles and integrate them fully into warehouse management systems and work process.

Besides, we create the online booking system TKGO for our customers, all forwarders can be able to perform online bookings, tracking transaction, claim case.

In our Region, over 70% of the cargo reservation is directly done by this platform, customers could be able to perform their transactions online 24/7 without any intermediaries. Also, our on-going digitalize system, Turkish Cargo Chatbot (Cargy) is launched early this year, offers customers an easily way to get instant shipment details in 24/7 including AWB status, tariff, station capability through the exclusive WhatsApp account.

Please share some lessons we could all learn from this pandemic.

Supply Chain – The pandemic period, especially the critical processes in vaccine transportation, have shown us that air cargo logistics is vital for the sustainability of the supply chain even under difficult conditions. As the flag carrier brand, we are among the most active carriers in pharmaceutical transport with a global market share of 8 percent in vaccine transportation and in line with the ever-increasing vaccination, we commit to be fully involved in the process throughout 2021.

Digital transformation – The global pandemic has created vulnerability over the world economy and trade. During the period we have been getting through, Turkish Cargo has rapidly adapted to the changing circumstances to maintain continuity of logistics and supply chain was of vital importance indeed, through experience.

Technological infrastructure investments made by Turkish Cargo towards digitalization and initiatives focused on e-Commerce, which we started long before COVID-19, have been crucial in practice during the pandemic period. The brand will go further enhancing service quality to meet the needs of our customers and sector partners, involved in our global network, with conveniences thanks to our digitalization-related activities.