LONDON, UK—A turbulent 2022 for the global air cargo market ended in December with a ‘win/win’ outcome for airlines, forwarders and shippers as chargeable weight fell -8% on a year ago and the general airfreight spot rate registered its largest year-on-year decline of 35%, but overall average rates remained 75% above the pre-covid level, according to weekly market analysis by CLIVE Data Services, part of Xeneta.
The -8% fall in global air cargo volumes represented the 10th consecutive month of lower demand, down -13% compared to 2019, at a time when available airfreight capacity continued to restore above last year’s level. Capacity in December 2022 recovered to 93% of the 2019 level.
CLIVE’s ‘dynamic load factor,’ which measures the volume and weight perspectives of cargo flown and capacity available to provide a true indication of market performance, declined -7% pts year-over-year to 57% and was -5% pts below the figure for December 2019.
“It would be easy to take a pessimistic view of the global air cargo market’s downturn, but this would ignore where it has come from. There is little use comparing it to the same time last year because then we had no Ukraine conflict, no high energy prices, no soaring interest rates, nor the impact of the subsequent cost-of-living pressures,” commented Niall van de Wouw, Chief Airfreight Officer at Xeneta.
“So, based on the global environment we see right now, airlines are still achieving rates 75% higher than pre-Covid. That indicates the glass is very much still half full. If, in January 2020, you had asked airline executives if they’d like to see airfreight rates across the Atlantic or from Asia Pacific 75% higher, we would have heard a unanimous ‘yes’. The difference now is that there’s less pressure if you’re a shipper, even though you’re still paying more. In terms of the long-term sustainability of the air cargo supply chain, this will help,” he added.
Airfreight spot rates on top volume corridors declined more sharply in December. Outbound Asia Pacific spot rates have been falling for eight consecutive months, with spot rates from Asia Pacific to North America of USD 5.38 per kg for the final month of the year down 13% since October. This represented a -58% decline on a year ago but remained 87% above the 2019 level.
Uncertain times and outcomes
On the Asia Pacific to Europe corridor, the average December spot rate dropped 10% compared to October to USD 4.67 per kg, -46% year-on-year but, again, remaining a strong 92% above the pre-pandemic level.
Reducing winter flight schedules contributed to some resilience to this year’s market headwinds on the Europe to North America corridor. December’s airfreight spot rate stood at USD 3.25 per kg, up 7% over the October level. Replicating the market trends on the other main lanes, this rate was -46% versus a year ago but still 80% up on 2019.
The company specializes in craing tailor-made expe solutions designed to meet the demands of clients, backed by dedicated customer service to provide bespoke premium aireight and chaer services.
Prime Aviation may be relatively young in the sturdy global airfreight and logistics industry but it takes pride in having the knowledge and capabilities to provide airfreight and logistics solutions specific to what customers need.
The company does this through an integrated system that utilizes logistics and supply chain technology coupled with decades of experience that are agile and responsive to the demands of the market.
It specializes in crafting tailor-made expert solutions designed to meet the demands of clients, backed by dedicated customer service to provide bespoke premium airfreight and charter services.
These practices make Prime Aviation the preferred reliable and cost effective choice for clients in the region.
Founded in Dubai, the global business gateway, Prime Aviation’s network of operations span across the Middle East, Asia, Africa, Eastern Europe, China and the CIS countries. It benefits from a healthy network that has been established on trust and integrity
Founded in Dubai, the global business gateway, Prime Aviation’s network of operations span across the Middle East, Asia, Africa, Eastern Europe, China and the CIS countries. It benefits from a healthy network that has been established on trust and integrity across many airlines, airports, handling companies and freight forwarders.
Prime Aviation MD Syed Mohamed Wazeer has a keen vision to create value driven growth by providing services that extend beyond airfreight logistics.
acros s many airlines , airports , handling companies and freight forwarders.
Prime Aviation MD Syed Mohamed Wazeer has a keen vision to create value driven growth by providing services that extend beyond airfreight logi s tics . As digital fulfillment platforms such as end-to-end supply chain visibility, integrated distributed order management solutions and personalized analytics take center stage in today’s logistics, Prime Aviation’ s goal s become more transparent.
Its vision is clear—to create an environment for manufacturers and retailers that effectively position and manage their businesses by sharing information, hence, propelling a refreshing form of efficiency into the air cargo transport industry.
This becomes particularly relevant when we observe the consumer behavioral dynamics rapidly evolving to suit a digitalized form of commerce. Adoption of e-commerce has led to a revolution in consumer trends especially during the pandemic allowing Prime aviation to reflect thoroughly on the demands of their clients as they face an overwhelming demand, which at times may be crippling due to lack of supply.
Providing an efficient and tailored supply chain can mitigate the numerous risks clients face allowing for better fulfillment and increased profitability.
Prime Aviation prioritizes quality of service over every other factor which is reflected in the satisfaction of their clients. With the availability of e-services that allow tracking, tracing and online bookings customers relish in the comfort of fulfillment with transparent visibility of their cargo.
It becomes quite evident that the organization does not intend to leap forward into an abyss but rather takes calculated steps forward. Its team continues to explore activities and projects that may introduce new streams of revenue, increase profitability or add value to the organization.
The pandemic proved to be a fruitful time to increase the pace on development within the organization and investments were poured into hiring skilled manpower, expanding the fleet of airplanes and establishing cross border partnerships that allowed for new routes to be established fulfilling the requirements of the clients.
It is imperative now for the organization to maintain the existing momentum and capitalize on the existing resources to maximize efficiency and create a profitable path for the future.
Baku, Azerbaijan—As part of a wildlife reintroduction project, Silk Way West Airlines flew 100 yaks over more than 2,000 kilometres from Kyrgyzstan to Azerbaijan.
The cargo experts transported the herd from Bishkek Manas International Airport to Baku Heydar Aliyev International Airport. Moving these animals was a challenge that the freight airline successfully completed in accordance with the request of the Ministry of Agriculture of the Republic of Azerbaijan.
Thanks to the airline’s crew and loadmasters’ long experience with animals’ transportation, the yaks all were delivered safely to their destination, and were subsequently transported to their new pastures by truck from the airport.
Silk Way West Airlines has successfully handled numerous live animal shipments in the past, in accordance with all IATA regulations. The carrier’s extensive experience includes transportation of alpacas, kangaroos, dogs, horses and European bison.
Silk Way West Airlines aircraft provide their animal passengers with a perfectly air-conditioned and ventilated environment thanks to ventilation and temperature control systems. The yaks were transported in special cages designed to ensure that they were not exposed to any risk of injury during the flight and remained under veterinary supervision throughout their journey to ensure their wellbeing.
“We are proud to be involved in projects like this, contributing to the preservation of a sustainable and biodiverse environment worldwide. Thanks to experienced crew and accompanying veterinarians, we were able to transport safely the yaks to their new home in Azerbaijan. We thank the Ministry of Agriculture of the Republic of Azerbaijan for their trust in our work,” said Vugar Mammadov, Vice-President CIS and Central Asia of Silk Way West Airlines.
Founded in 2012 in Baku, at the heart of the Silk Road, Silk Way West Airlines operates hundreds of monthly flights across the globe via its fleet of 12 dedicated Boeing 747-8F and 747-400F aircraft based at Heydar Aliyev International Airport.
On April 28, 2021, Silk Way West Airlines signed a strategic fleet expansion agreement with Boeing for the purchase of five new 777 Freighters, followed by a further agreement signed on November 10, 2022 for the purchase of two state-of-the-art 777-8 Freighters. Silk Way West Airlines also agreed the purchase of two A350 Freighters with Airbus on June 28, 2022.
The airline’s annual cargo turnover exceeds 500,000 tons, while its growing route network covers over 40 destinations across Europe, the CIS, the Middle East, Central and Eastern Asia, and the Americas.
MENA Aerospace was keen on adding the vertical of cargo to its portfolio with reach not just in the Middle East or Noh Africa, but in South Asia too. For that, it entered into an alliance with Air Cargo Network (ACN) with which its vast connectivity in South East Asia and beyond is going to provide the best of springboards for growth.
ENA Cargo was born in 2020 in Bahrain during the height of the pandemic as a brand under MAE Aircraft Management WLL which is part of MENA Aerospace Enterprises WLL.
MENA Cargo got its Air Operator’s Certificate (AOC) by Bahrain’s Ministry of Transportation and Telecommunications’ Civil Aviation Affairs (CAA) department in 2021. And since then, it has been steadily growing, providing scheduled and charter air freight services across underserved markets in the Middle East, Africa and South Asia.
Its assets and operations are structured to afford maximum flexibility at minimal costs. A key feature of MENA Cargo’s operations is its efficient Smart Booking System for registered agents.
MENA Aerospace was keen on adding the vertical of cargo to its portfolio with reach not just in the Middle East or North Africa, but in South Asia too. For that, it entered into an alliance with Air Cargo Network (ACN) with which its vast connectivity in South East Asia and beyond is going to provide the best of springboards for growth.
In this Q&A with Air Cargo Update, MENA Cargo’s Managing Director-Designate, Iman Marco, a lawyer who specializes in corporate laws, gives more insights on the company’s expansion and growth plans.
Were you in the right place and at the right time to launch MENA Cargo, considering that the pandemic helped cargo business, particularly pharma and humanitarian relief?
MENA had on good authority received strong recommendations that ACN were steady and successful cargo airline operators, and when we met, it matched their expectations. Their ambition to build a successful cargo airline in Bahrain and the MENA region, and our ambition to grow our business is what binds us together.
It is being one year since you received the air operator certificate (AOC), could you give us an overview of your business in this one year?
MENA Aerospace’s initial year was always going to be an establishment year where it was going about getting a footing in the market. Its growth plans were hampered by multiple reasons that are now history and we are looking forward to more positive growth.
Is it a sustainable business?
I think sustainability in the cargo airline business will be dependent on three key drivers – firstly the capital structure of the business; the presence of a strong existing demand for cross-border movement of goods (trans-shipments, imports and exports) within its region of operations; and finally, the experience and ability of its management team to manage, maintain, and to conduct operations smoothly and cost-effectively.
Today, an airlines sustainability remains challenging and is a niche skill. Asia Cargo Network brings to MENA Cargo its vast experience to compete in the air cargo market, and to manage the business in a versatile manner to adapt with the ever-evolving industry with asset-deployment and cost-management strategies. This type of management would ensure the sustainability of the business regardless of the global economic challenges we now see.
Your plans are to serve underserved markets as well, could you tell us which these markets are, considering the operational challenges these would throw up?
I think that this was a phrase used by MENA Cargo prior to ACN joining. We are taking the lead here and with this new partnership formed, we will be coming in strong to serve the growing need of the regional Middle East and North Africa market demands with additional freighter operations. There will also be more markets that we will be operating into in the near future including West Asia, Eastern Europe, Pakistan, India and Bangladesh.
Operational challenges are common. We have had vast experience operating in various challenging areas like Bhutan or even Papua in Indonesia (for example, terrain challenges or destinations with under-developed infrastructure), MENA Cargo will have an experienced management team that will undertake a more tailored and hands-on approach to face potential operational challenges.
Where are your scheduled freighters to and from?
We will be operating out of Bahrain and Sharjah (UAE) to various markets mentioned above.
What is your fleet size, tonnage capacity? Is the fleet owned or leased?
Our fleet deployment will be over the next 18 months a total of six aircraft which will include a B737-300F, B737-800F and B767-300F. These will be a combination of both owned aircraft and leased aircraft.
The first of six is due to arrive within the next two months, and will begin operations immediately. In terms of tonnage capacity, the B737-300F has up to 17tons of payload capacity; the B737-800F has up to 21tons; and the 767-300 approximately 50tons.
What is the arrangement with Asia Cargo Network and what synergies do you both bring to the table?
Asia Cargo Network (“ACN”) is Southeast Asia’s leading air cargo charter services provider and a parent company to three regional airlines (World Cargo Airlines, Asia Cargo Airlines and RGA Airlines in South East Asia) with daily freighter operations across Asia.
Whereas MENA Aerospace WLL’s subsidiary MAE Aircraft Management WLL was awarded an AOC by Bahrain’s Ministry of Transportation and Telecommunications Civil Aviation Affairs (CAA) department in 2021. In a newly signed strategic alliance partnership, ACN will be a shareholder with a 49% stake in MAE Aircraft Management WLL (brand name MENA Cargo), bringing to the table investments consisting of capital, asset deployment, management expertise. It is a perfect synergy between both parties enabling immediate strategic market expansion of air cargo operations covering the Middle East, Asia and Africa altogether.
There are so many players in the air freight market in the Middle East competing for the huge pie that exists in the region and beyond, how are you going to distinguish yourself in this competitive market?
Marco: While it is true that that there are many players in the air freight market, these are mainly passenger aircraft operators which carry cargo in the lower deck of their aircraft, albeit with various limitations to the type and size of cargo it can carry. There are much fewer full-freighter aircraft in this region and the existing ones are mainly wide-body operators flying mid to long haul routes.
Dedicated narrow-body freighter services remain scarce and there is still considerable market demand (in the Middle East, Northern Africa and Indian Subcontinent region) to consolidate cargos to a full freighter operation with less reliance on inconsistent passenger operations.
We will also offer Middle East connectivity to Southeast Asia and China via our ready network of operations through World Cargo Airlines, Asia Cargo Airlines and RGA Airlines which will be receiving cargos from India as a mid-point and feeding it into our network.
Why did you choose Bahrain as your hub?
Bahrain is already strategically positioned within the Middle East, Northern Africa and the Indian subcontinent for regional flights. On a larger scale, because it sits right between Europe and Asia, it can act as a trans-shipment hub for continental cargo movements, even to the Americas.
Bahrain has immense untapped potential ready and waiting to be unlocked. Its ground logistics infrastructure and capability to facilitate a trans-shipment hub is developing fast, as it already possesses the right technology and facilities, with land space still readily available for development. Integrators like DHL and FedEx are also focusing their base of operations to be in Bahrain.
This is in comparison to Dubai, for example, which is now a busy and saturated transit hub which can pose various challenges to both airlines and logistics companies alike in terms of regulations and competition.
Bahrain has all the right ‘ticks’ for it to be the next big hub, but of course it will take time.
There are 24 airlines which transit Bahrain compared to 84 from Dubai International Airport, does that in a way limit your growth plans
Marco: As our immediate plans are to offer regional feeder network flights within the range of our B737s, the difference in number of transiting airlines would not have an immediate impact on us.
More importantly for an airline like MENA Cargo, Bahrain is surrounded by other nations with ‘Open Skies’ policies including the UAE, enabling us to also conduct immediate air cargo operations from there.
Getting talent here must be a challenge, considering that most of them will be expats, adding to the costs? How cost competitive will you be?
I don’t think that expats necessarily add to the costs as compared to hiring locals. Either way, the real challenge is if you do not have the right experience to assess individual hires or to build a solid team which brings the prerequisite experience required to running a full-freighter operations.
MENA Cargo is now able to tap into ACN’s vast resource of skilled manpower. In cargo airlines management, effective costmanagement comes from entering into the right aircraft deals and managing the aircraft and engines correctly. That is where we will put our focus on to ensure no cost leakages to remain cost-competitive in the market while maintaining a lean yet fully experienced team.
As MD-designate what strategies have you decided upon to take the company to the next level?
Our strategy will be to play on our strengths. MENA Cargo must penetrate the regional markets mentioned and at the same time leverage on the existing flight network that Asia Cargo Network has into the various ASEAN countries, China and India. It will need to offer customers connectivity which may not be readily present.
Coming from a family which has been in the cargo / logistics business for many years, was it easy for you to move into this line?
Marco: Interestingly, I had meant to further my career in law (corporate law as a specialty). But there were several golden opportunities that came along my way which simply could not be ignored. This was before Asia Cargo Network Group had acquired a majority stake in World Cargo Airlines (formerly known as Pos Asia Cargo Express) and before it had set up its third airline (RGA Airlines). I guess you could say the opportunity came like a full powered train and I hopped onto it without hesitation. The transition into the cargo airline business, however, was not without major challenges and life changing
moments. It required my full dedication and resilience to understand all the nuances and technicalities of operating an airline while having to manage and compete for profitability of the business in a consistently high-risk high-reward environment.
What challenges do you see in the air cargo business and as a next gen entrepreneur what are you going to invest in to overcome these challenges – will it be human capital, technology or something else you bring to the table?
Marco: Naturally, the current volatile state of global affairs remains a deep concern in the air cargo business. We can be adversely impacted from a global incident that occurs many continents away. The impact on the global supply chain, and the inconsistent rising costs of goods (e.g., fuel) sets an ever-changing direction which can cause imbalances in supply and demand. This can be very disruptive to air cargo businesses.
Investing in technology is not as easy as it seems and I have not seen any game changing technology to-date that can be applied by cargo airlines. Perhaps there are some out there, but they are geared more towards ground logistics (e-fulfilment or tracking) technology. An interesting alternative would be to look at Cargo-carrying UAVs (Unmanned Aerial Vehicle) which are not fuel dependent. We have begun to explore this, but I think it will be some years to go before safety of its operations can be guaranteed.
Ultimately, I would say investing in human capital and expertise remains forefront (at least for the next few years). With the right people and skill, there are various ways to overcome or mitigate these challenges.
What will be the USP of MENA Cargo?
Marco: MENA Cargo operates a more niche type of narrow-body freighter aircraft and will facilitate more regional feeder access and opportunities to various direct shippers, integrators, aggregators, consolidators and forwarders. This may include access to untapped markets and onward connectivity into Southeast Asian cities.
What are the goals you have set for the company by 2030?
Marco: MENA Cargo aims to be the region’s leading cargo airlines offering both global long-haul freighter flights across continents and regional feeder flights by 2030. We are also enthusiastic over the developments of electric UAVs (unmanned aerial vehicle) used for cargo deliveries which is, of course, still being tested at the moment. Electric UAVs or electric aircraft as cargo carriers will be another big transition which we aim to achieve towards in the next ten years.
DUBAI, UAE—Boeing [NYSE: BA] Business Jets (BBJ) continues to show strong performance in the Middle East, with the region accounting for 29% of the global BBJ fleet, the company said.
Erika Pearson, President Boeing Business Jets (BBJ), commented: “The Middle East and Africa (MEA) together have 820 business jets, with a large concentration of those being in the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA). This region sets the highest expectations for service, luxury, and space. While also being geographically situated such that it can be served very well by BBJs.”
“In the region, BBJs meet the needs of not only private VIP and corporate jet travelers, but it also remains the “gold standard” for head-of-state travel. Its unmatched cabin size and attributes show why the BBJ is preferred over every other private jet. Customers can work with high-speed connectivity and privacy, dine, relax, sleep and shower in private suites, while other guests and crew have full access to the main cabin,” she added.
According to Alex Fecteau, Director of Marketing for Boeing Business Jets, “BBJs account for 75% of all widebody head-of-state airplanes in the region. This demonstrates the strong demand for our jets, and the commitment our valuable customers have for our brand. Overall, business aviation in the Middle East market continues to show strong growth, far greater than nearly all other regions. With global business aviation traffic up 14%, according to WingX, an aviation and data analysis agency, the Middle East region business jet departures are up a whopping 62% compared to the same period pre-pandemic. With increased interest in private and business aviation in the region, BBJ is uniquely positioned to meet this growing demand. The spike in bookings to Qatar associated with the World Cup, up 345%, demonstrate the demand for the benefits offered by private jet travel.”
In 2021, BBJ celebrated its 25th anniversary with more than 260 orders to date. Since 1996, BBJ has provided the business jet industry’s highest quality and most exclusive, cost-effective flying experience.
Built to the highest quality and safety standards, every BBJ is custom outfitted to each owner’s individual tastes and needs, and since it is built upon the foundation of our robust commercial structure, provides reliability, and on-time departure performance far superior to every other business jet.
As a leading global aerospace company, Boeing develops, manufactures and services commercial airplanes, defense products and space systems for customers in more than 150 countries.
As a top U.S. exporter, the company leverages the talents of a global supplier base to advance economic opportunity, sustainability and community impact. Boeing’s diverse team is committed to innovating for the future and living the company’s core values of safety, quality and integrity.
By 2025, the cargo airline envisions its annual revenues to reach $2.37 billion handling cargo volumes of as much as 1.6 million tons and serving 70 international destinations.
“14 dedicated freighters as of today and they include nine Boeing 777F; four Boeing 737-800BCF; and one Boeing 767-300BDSF and these are helping in capacity expansion, on top of our belly capacity which has gradually opened up as travel restrictions are easing up. We are still using 11 passenger to freight aircra (eight wide-bodied and three narrow-bodied P2F) which have been configured for cargo, albeit temporarily. We will be geing deliveries of three Boeing 767- 300BCF next year and another Boeing 767-300BDSF soon.”
As a strategic business unit of the group, Ethiopian Cargo & Logistics Services has significantly contributed to the total profit of the group which stood at US$900 million.
Ethiopian Airlines is the only airline in the African continent to operate a fleet of over 130 international
passenger and cargo aircraft. Its subsidiary, Ethiopian Cargo & Logistics Services, is a significant revenue driver for the Group. And Addis Ababa is fast emerging as the ‘smart logistics hub’ in the whole of Africa. Needless to say, it has grown enormously that it is now considered among the top 50 airlines in the world.
By 2025, the leading aviation group in the continent envisions to operate at least seven business units: Ethiopian International Services; Ethiopian Cargo & Logistics Services; Ethiopian MRO Services; Ethiopian Aviation Academy; Ethiopian ADD Hub Ground Services, Ethiopian Airports Services and Ethiopian Express Services
Giving a perspective of the work in progress at Ethiopian Cargo is its Managing Director, Abel Alemu, who spoke to Air Cargo Update on the sidelines of the recently held World Cargo Symposium in London. Excerpts of our interview below:
Post-pandemic, what is the emerging picture for Ethiopian Cargo?
The aviation sector, like most other sectors, was impacted majorly. However, the cargo segment was very active, transporting medicines and other humanitarian relief materials. I can confidently say that the past few years have been highly lucrative for cargo business. As a strategic business unit of the group, Ethiopian Cargo & Logistics
Services has significantly contributed to the total profit of the group which stood at US$900 million. The cargo unit with dedicated freighters, charters and belly freight accounts for a large chunk of the group’s revenues.
What has been the growth year-on-year for the cargo segment?
The growth has been tremendous not just in revenue but also general uplift. We are focused on four major areas – fleet acquisition, infrastructure development, network expansion and human capital. We have 14 dedicated freighters as of today and they include nine Boeing 777F; four Boeing 737-800BCF; and one Boeing 767-300BDSF and these are helping in capacity expansion, on top of our belly capacity which has gradually opened up as travel restrictions are easing up. We are still using 11 passenger to freight aircraft (eight widebodied and three narrow-bodied P2F) which have been configured for cargo, albeit temporarily. We will be getting deliveries of three Boeing 767-300BCF next year and another Boeing 767-300BDSF soon.
Where are the new freighters going to be deployed?
The new freighters will get delivered by September next year and they will cover existing routes to address demand. There will be frequency adjustments and we will also look at new markets. The United Arab Emirates (UAE) is a growing market and we are strong there, thus, the focus will be in the Middle East. In the interim the Boeing 767-300BDSF which we are converting with the help of Israel Aerospace Industries (IAI) will be delivered and that will be deployed in the Middle East, Indian sub-continent and south Europe.
Besides fleet acquisition, you did mention three other focus areas, could you give some details on the same?
We are investing heavily in infrastructure development in Addis Ababa, intending to become a world class ‘smart logistics hub’, serving not just African continent but the region as a whole. The new distribution facility is designed to help e-commerce business and will be operational by June 2023. It is a huge project with an investment of nearly US$50 million and it will be one of the most modern and efficient logistics platform in this part of the world.
Another focus area is network expansion. We have 66 freighter destinations and 130 passenger destinations and we are continuously expanding. By far, we are the largest operator in Africa. We fly to Brazil, Chile, Ecuador, Miami, Mexico, the Indian sub-continent, Indonesia and many more destinations across continents. We have a combination of 40 flights in and out of China, both passenger and dedicated freighters, though some of them have been affected due to the pandemic. In India, we have daily freight schedule from Mumbai and wide-body aircraft flights through Delhi, Bengaluru and Chennai.
The fourth focus area is investment in digitization and human capital. We have introduced online booking, tracking and tracing systems, etc., and we are working with our technology partners to expand our digital footprint, to facilitate further seamless movement of cargo and the processes.
With such investments, what has been the returns?
Like I said, we are profitable and cargo is going to be critical component of the group business. Our vision 2025 envisages annual revenues of US$2.97 billion (US$2.37 from dedicated freighters) carrying a total tonnage of about 1.6 million and serving 70 international destinations. Ethiopian Cargo will be one among the top 20 cargo airlines in the world in terms of FTK by providing safe, market driven and customer focused air cargo, courier and mail transport services by 2035. The vision is to have 30% market share in the sub-Sahara African cargo market.
Could you tell us more about your network expansion, particularly in the Middle East?
The Middle East, particularly UAE, continues to be a very strong market for us. We have three operations from Dubai World Central (DWC), triple daily wide-body flights from Dubai International (DXB), and nine passenger-converted freighter weekly flights from Sharjah into Africa. The freighter flights from Sharjah are direct to Kenya and Nigeria without touching Addis Ababa. Going forward, we will be expanding the UAE business.
What about other countries in the Middle East like Saudi Arabia, Qatar, etc.?
Alemu: The Middle East has tremendous potential. We have dedicated freighter operations into Jeddah and Riyadh with mostly perishables going into these cities and general export out of Saudi Arabia. Doha is presently served with belly capacity, while we have a weekly freighter flight to Kuwait. We recently started passenger flight to Jordan and will be using belly capacity to and from.
As regards other regions, Korea is an interesting market for us as we are a significant global player of salmon traffic.
We have four weekly flights transporting salmon to Incheon out of Norway and on the way back normal cargo is moved. We have not reopened Singapore as yet and we are hoping that passenger flights will normalize fully by December.
Tell us about India connectivity?
Alemu: We have regular freighters out of Mumbai, Delhi, Bengaluru and Chennai. India is a top pharma market for us and we are looking at opening Hyderabad and Ahmedabad in a gradual manner.
Can you update us on the pharma hub that you are developing in Addis Ababa?
We have the largest cold room facility in the region, built in 2017 and it came handy during the height of the pandemic. The pharma business is expanding and work is in progress to make Addis Ababa the pharma hub for Africa. We have received IATA’s Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) certification in December 2021, making us the first airline in Africa to receive such certification.
We have one of the most modern facilities and are able to provide efficient and effective transportation of pharmaceuticals throughout our pharma network including Brussels, Shanghai, Johannesburg, Paris, Seoul, Lagos, Lusaka, Beijing, Hong Kong, Maastricht, Chicago and Addis Ababa.
Our special cargo division is also expanding and e-commerce is becoming very critical for growth, hence our focus is be a fully dedicated smart warehouse hub in the region. The state-of-the-art cargo terminal with perishable cargo handling of 336,000 ton per year is one of the highpoints of our group.
A lot is happening….
Yes, indeed a lot is happening. We keep on developing and our aim is to be a leading airline in Africa.
Aren’t you already the leading airline in Africa?
Yes, we are but we need to continue to keep the momentum. We want to be competitive in the global marketplace to be a formidable airline. The group has a strategic road map and we are on course to becoming one of the top airlines in the world and Ethiopian Cargo will be a major player in this journey.
“Like I said, we are profitable and cargo is going to be critical component of the group business. Our vision 2025 envisages annual revenues of US$2.97 billion (US$2.37 from dedicated freighters) carrying a total tonnage of about 1.6 million and serving 70 international destinations. Ethiopian Cargo will be one among the top 20 cargo airlines in the world in terms of FTK by providing safe, market driven and customer focused air cargo, courier and mail transpo services by 2035. The vision is to have 30% market share in the sub-Sahara African cargo market”.
Abu Dhabi, United Arab Emirates – Etihad Airways, the national carrier of the United Arab Emirates, has partnered with World Energy, a carbon-net-zero solutions provider, to operate the first NetZero flight powered entirely by Sustainable Aviation Fuel (SAF) Book & Claim, delivering delegates to COP27 with zero net emissions.
The airline will operate its Washington Dulles to Abu Dhabi service, routed via COP27 venue Sharm-El-Sheik to demonstrate the only feasible path to net-zero commercial aviation using current technology, while showcasing the challenges and opportunities of SAF.
Mariam Alqubaisi, Head of Sustainability & Business Excellence, Etihad Airways, said: “This initiative is about proving NetZero commercial aviation is possible, but equally facing up to the significant logistical challenges the industry faces to turn the possible into the routine. Etihad endeavors to make good on its rigorous commitment towards sustainable aviation through the Greenliner programme in partnership with Boeing, GE and other aviation leaders in 2020, followed by the addition of the Sustainabile50 programme in partnership with Airbus and Rolls Royce, coupled with our commitment to achieving net zero emissions by 2050 and halving our net emission levels by 2035.
“Through these programmes, we have run a series of ecoFlights over the past two years to test and validate several concepts, and we have made refining and implementing sustainability initiatives an intrinsic part of our day-to-day operation. The NetZero flight is the next logical step after our EY20 operation from London Heathrow to Abu Dhabi in October last year, where we reduced emissions by 72% compared to the same flight in 2019.
“This isn’t about solving only Etihad’s emissions, but about supporting the entire industry to address the biggest challenge we face over the next three decades.”
Gene Gebolys, CEO, World Energy, said: “Aviation is how the world connects but we are on a collision course as flying people and goods is one of the most carbon-intensive things humans do. Aviation is on an unsustainable trajectory as it is projected to continue to account for an ever-greater share of global carbon emissions. But there is a way off this course. The course correction will come from the fuel tank rather than the cockpit.
Together, we can efficiently change the fuel we fly on so we can change the impact of flying. We are grateful to corporate leaders like Etihad who are paving the way to help make net-zero aviation a reality.”
Enabling delegates to travel 10,000 km emission-free to COP27, Etihad will buy (or book) SAF for the flight provided by fueling partner World Energy. However, the flight will use conventional Jet-A1 fuel, and the physical SAF that Etihad has purchased will be delivered into the Los Angeles International Airport (LAX) fuel system and used on flights by other airlines out of that airport.
LAX has the infrastructure in place to take delivery of and distribute World Energy’s SAF. This is known as a Book & Claim system and is the preferred model for SAF use and distribution advocated for by the aviation and energy industries as a stopgap solution to make SAF available for global aviation until infrastructure and production capacity can catch up. Book & Claim includes scrupulously third-party verified transactions that comply with the Roundtable on Sustainable Biomaterials (RSB) guidance
Guests onboard the flight will not be charged any extra premium for their fare but preparing a NetZero flight without charging each passenger and cargo shipment a surcharge is a challenge given that the cost to produce SAF is four-times higher than JetA1.
The extra costs will be mitigated by several sources, including government subsidies reducing the SAF cost by 50 per cent, the Corporate Conscious Choice programme contributing 28 per cent, and the Etihad Guest Raffle providing 22 per cent. A final 10 per cent to partially offset additional operational and handling costs will be generated by tokenizing and trading CO2e avoidance credits, possible due to this being the first transatlantic flight actively managing non-CO2 effects through contrail avoidance prediction and flight planning.
The NetZero flight will be the latest in a series of “EcoFlight” tests since Etihad launched its Greenliner programme in 2020, each one testing and proving a series of concepts.
“Despite many airlines being late to expand into freight, we have seen a strong movement towards the use of new innovations in the sector to get ahead of traditional cargo-focused airlines which are stuck using older, legacy technology. Undoubtedly, airlines that were already on their digital transformation journey were able to adapt fast.” – Ashok Rajan, Senior VP & Head – Cargo & Logistics Solutions at IBS So.
The air cargo industry is in the midst of a major transformation and digitization is crucial to its success. The changes have led into more efficiency in streamlining approach to managing air cargo, with various processes being automated and made more transparent.
Airlines and other companies in the air cargo industry are turning to digitization in order to gain a competitive edge. By investing in new technologies, they are able to improve their operations and offer a better experience to their customers. In particular, digitization can help reduce costs, improve efficiency and provide a better customer experience.
Firstly, the mind-set in the industry towards digitization has undergone a sea of change, from being a backend cost center to being central to all business initiatives. Visibly, there have been changes on several fronts (a) Most airlines have invested into modern core platforms that are providing reasonably clean and accurate data (b) Selling has gone digital in a big way whether through common channels or direct connectivity (c) Automation on the ground and in warehouses are seeing significant investments and these are giving a good uplift to quality of service (d) Integration between partners and stakeholders are becoming less cumbersome and ( e) generally IT landscapes are becoming far cleaner, simpler and more efficient.
Digitalizing and automating air cargo systems, and moving away from the traditional, old-fashioned paper-based
processes, means airlines can gain actionable ins ight from how their operations are running and make genuinely
informed business decisions that serve customers better and impact the bottom line.
Ashok Rajan, Senior VP & Head – Cargo & Logistics Solutions at IBS software, explains to Air Cargo Update the importance of digitization in the air cargo industry in an email interview.
Boosting cargo revenues
The boost in cargo revenues have been a lifeline for many in the air cargo industry, which has faced unprecedented challenges since 2020. The pandemic has disrupted traditional trade routes and led to a sharp decline in demand for certain types of cargo, such as containerized freight. At the same time, it has caused a surge in demand for other types of cargo.
The boost in cargo revenues have been a lifeline for many in the air cargo industry, which has faced unprecedented challenges since 2020. The pandemic has disrupted traditional trade routes and led to a sharp decline in demand for certain types of cargo, such as containerized freight. At the same time, it has caused a surge in demand for other types of cargo.
Traditionally side-lined by airlines, air freight represented a gilt-edged opportunity for airlines to generate revenues with passenger fleets largely grounded. With cargo yield at previously unheard-of levels, for many airlines, air freight became their lifeline.
“Digitalization is critical to boosting air cargo revenues. Going digital is a 3-pronged approach to boosting the top line. (a) Reach – Take your product to customers and regions that otherwise wouldn’t be serviced by feet on the ground, this either through digital channels or direct connectivity (b) Value Addition – The pandemic has shown
that higher price points are affordable to customers, as long as value can be offered. Being digital can provide the means to creatively construct new offerings and make sure service delivery against those is possible (c) Dynamic Pricing – For long price has been a constant in this industry – this tech backed approach for dynamic pricing is
trying to discover the right price at the right time and therefore allowing airlines to price their services in line with market fluctuations,” says Rajan.
Evolving digital landscape
It’s no exaggeration to say that digitalization has been the difference between airlines that were able to fully capitalize on the opportunity, and those that were not, according to IBS.
“Despite many airlines being late to expand into freight, we have seen a strong movement towards the use of new innovations in the sector to get ahead of traditional cargo-focused airlines which are stuck using older, legacy technology. Undoubtedly, airlines that were already on their digital transformation journey were able to adapt fast.”
While the pandemic has significantly boosted the profile of air cargo with airline decision makers and pushed them to re-evaluate their business models, the onus is now on the air freight sector to keep freight in the boardroom long-term as passenger volume returns.
That requires evidence of value. Key to that is switching the focus to the value of shipments rather than focusing on capacity alone. And digitalization provides the means to do just that.
“At IBS Software, we always stay well ahead of times, advocating the need for a digital push in the airline industry in general and particularly in the air cargo industry. Our core focus has been to build and offer digital platforms ease airlines and GHAs along the digital journey.
“Our efforts are on three fronts (a) Offering a strong digital platform for core operations – this has been done through our market leading iCargo platform, enabling core business transactions to be digitized, allowing for a strong and clean data to be collected and utilized and drive efficiencies (b) A suite of products under the iPartner umbrella which are meant to bridge the digital divide between the disconnected stakeholders in the industry be it between customers and airlines or airlines and GHAs or between airlines themselves (c) We also have a medium to long term strategy in expanding beyond the airport-2-airport operations and offer a holistic logistics platform. The majority of airlines and many ground handlers on board are helping move the industry forward on this front,” Rajan explains.
To support this, IBS Software has developed a vibrant community of airline and ground handling customers and partners that has grown around the platform, encouraging best practice shared to drive air cargo’s digital transformation.
‘Democratization’ of AI technology
When we asked about the use of AI-based tools to drive digitization in the cargo industry, Ashok described the use of AI tools as putting the cargo business on steroids.
“Businesses that embrace digitalization and make the mindset shift to rework legacy systems suddenly find themselves with access to the data they need to make informed decisions. That level of analysis – increasingly enriched by the introduction of AI to the tech mix – helps airlines map their air cargo business end-to-end and make informed, data-driven decisions about their operations. The shift being envisaged.
He continued further that the benefits of digitization are manifold. They can test and refine new products, provide personalized services and eliminate inefficiencies, to name a few. The upshot is that they are far better positioned to increase revenues while also providing a superior customer experience. “We’re also seeing these technologies evolve at great pace and become increasingly available to the entire value chain. The ‘democratization’ of AI technology is a critical development as traditionally access to cutting edge digital capabilities was limited only to the businesses with the deepest resources. This is quickly changing and will continue to change in the coming years, making these tools more and more accessible to any size of business.”
Personalization in digitization
Personalization is intrinsically linked to digitalization in the air cargo sector. This is part of the journey to unlock potential by moving from offering the customer ‘What we have’ to offering them ‘What They Need’, said Rajan.
At a fundamental level, personalization is all about delivering enhanced custome experiences that balance revenues with value and relevance. It’s of paramount importance because it builds deeper relationships by showing customers that cargo businesses understand and value their needs and preferences.
“In a digital landscape with so much information and choice, personalization helps overcome “paralysis by analysis”,
accelerate decision-making, and boost conversion by influencing and guiding customers.
Advances in data analytics and AI help players in the air cargo value chain tailor products and solutions that make customer experiences more relevant and targeted. What’s especially exciting is that there is so much more innovation to come. But that innovation is only enabled by airlines and GHAs fully embracing digital technology.”
Recommendation engines in air cargo serve the same purpose as in other industries – they provide a way for businesses to analyze available data and make suggestions to customers based on known preferences and behavior. This is long overdue for any industry that has operated on fixed offerings and pre-negotiated rates.
“As consumers, we are all subject to recommendation engines – whether searching for a flight, picking a movie on
Netflix, or shopping on Amazon. They work behind the scenes to propose one offer over another.”
According to Rajan, broadly, they can be split into two classifications:
1-Content based filtering categorizes products and services according to specific features and attributes, aiming to make a link with the user’s past behavior.
2-Collaborative filtering is a broader behavioral recommendation approach that looks at a user’s previous history and interactions, matching them with that of similar users.
“In the Air Cargo industry, this is a fundamental shift in how businesses are conducted, we ourselves in our platforms are moving the commercial aspects from being a booking system to a selling system, and this shift is a win-win for both the customer and the airline. The recommendations are in routing, timing, add-on services all of which allow customers to play on both axis – (a) moving the service up or down (b) Moving price points based on affordability. The underlying shift is moving the industry more towards B2C behavior from its current B2B approach,” Rajan shared.
For airfreight, there is so much to be gained from improving modern data-driven sales and recommendation engines, he added.
A look into the future
According to Rajan, the air cargo industry is undergoing a digital revolution, in reality digitization is a journey not a destination. The question arises, are we at the forefront of that journey or are we back-markers? The reality is that the sector was initially slow to embrace digital technology compared to other industry sectors, meaning the industry is working from a comparatively lower bar.
“Our vision for a Digital Freight Enterprise is one which (a) engages with its customers digitally (b) Can fully outsource or run its operations on a digitally managed SLAs and workflows (c) completely manages its revenues or finances digitally (d) collaborates with its partners on digital ecosystems (e) can completely engage and clear regulators over digital data and finally makes data and insights core to its operations,” said Rajan.
PARIS, France—Worldwide Flight Services (“WFS”) is set to be acquired by SATS Ltd. (“SATS”) for €2.25 billion with the transaction expected to be closed and fully executed by March 31, 2023.
SATS, the leading provider of aviation services in Asia listed at the Singapore Stock Exchange since 2000, has reached an agreement to acquire WFS from an affiliate of Cerberus Capital Management. Following the close of the transaction, WFS will become a wholly owned subsidiary of SATS and the WFS management team will continue to lead the business.
The transaction will bring together WFS, the world’s largest air cargo handler with leadership positions in the Americas and Europe, and SATS. This combination creates a first-of-its-kind global air cargo platform with scale and a network of stations across Asia, the Americas, and Europe. Customers will benefit from the combined platform’s broader suite of services, operational best practices, and integrated technology.
“WFS has become the leading global air cargo logistics provider thanks to our commitment to customers, our experienced team, and our partners at Cerberus,” said Craig Smyth, WFS CEO. “As we look to our next stage of growth, this combination will deliver exciting benefits for our customers and our people. We have great respect for SATS and enjoy similar values. By bringing together our respective strengths, we will be able to build on our trusted relationships around the world.”
Kerry Mok, SATS CEO, commented: “WFS is an industry leader because it has dedicated people and an unwavering commitment to customers. Our proposed acquisition is a transformational opportunity for SATS and will create a global leader and a go-to provider of mission critical aviation services. In our newly combined markets, SATS and WFS will be at the heart of global trade flows, operating in the world’s busiest airports and supporting the biggest companies.”
From Cerberus, financial sponsor since 2018, Managing Director Craig Brooks commented: “It has been a privilege to work alongside the talented WFS team and support the company in reaching new heights. Over the past four years, WFS has become a global leader by growing its network and investing in technology, operating capabilities, and customer solutions. SATS is a great partner for WFS and the combination will enhance growth and the value proposition for customers.”
WFS was advised by Goldman Sachs & Co. LLC as exclusive financial advisor, Linklaters LLP as lead counsel and Deloitte LLP as tax advisor.
Founded in 1984, WFS is the world’s largest air cargo logistics provider and one of the leading providers of ground handling and technical services with annual revenues of €1.8 billion. Its more than 30,000 employees serve over 300 customers at 164 major airports in 18 countries on five continents.
Another prime offering is the e-Marketplace, an online poal for booking door-to-door cargo transpoation services, offering competitive pricing and total transparency of the best shipment
options across all modes of transpo. The plaorm connects supply chain stakeholders; such as freight forwarders, Customs brokers, shipping lines, airlines, transpoers, consignees, warehouse operators, rail operators and regulatory authorities, enabling them to adopt modern logistics practices that will allow beer response to customer demand, increased efficiency and a more competitive industry landscape in air cargo space.
Digital transformation is heralding the next era in logistics and supply chain management and in the forefront is Kale Logistics Solutions, a global IT solutions paner for several Foune 500 companies worldwide. With in-depth domain knowledge and technical expeise, Kale Logistics is working on creating the world’s largest digital logistics cloud for the international supply chain by creating a global network of airpos and pos connected digitally through its Digital Corridors. Explaining in detail to Air Cargo Update the digital expanse of Kale Logistics Solutions is Amar
More, CEO and Co-Founder More holds the distinction of being the first and only Indian to receive the “CILT International Young Achiever Award – 2009 for his invaluable contributions to deliver tech solution to the logistics industry.
Digital transformation is a given thing now. Is the air cargo sector receptive to it, considering the high costs of going totally digital, more so, when the logistics industry is going through a margin squeeze?
Yes, Digital Transformation (DT) is the right thing to happen to the industry even though, a bit late, but not too late. The air cargo industry is receptive and understands the value DT will bring to their businesses. The mindset toward DT is not cost-centric but investment-centric, where the industry will reap benefits in the coming years and become sustainable.
The buzzwords in today’s board meetings are disruptive technologies – AI, ML, IoT, Blockchain, Cloud, Mobility, and AR are taking the center stage. The usage of these technologies has surpassed discussion and conceptualization to actual applications in business scenarios. For example, we have AI-based truck management systems at airports, Blockchain-based digital corridors, Machine Learning-enabled document to EDI conversion and many more.
Can you give some cost-benefit analysis for a freight forwarder such that the freight forwarding community understands the importance of digitization?
Every actor in the supply chain is touched by digitization in today’s world. In the past three years, the freight forwarding community has taken a quantum leap in tech adoption. The pandemic drove the need to go digital. Today, freight forwarders are facing two paths: digitize their processes and catch up with the industry, or become
obsolete and face very high costs. When it comes to addressing forwarders for digitization, we are dealing with a very
heterogeneous group with different levels of automation needs, customer expectations and scale of operations. Digitization benefits are both tangible and intangible for them. Tangible benefits including savings on charges like storage, demurrage, detention and abandoned cargo are very much possible. Document exchange can be executed within a few minutes as opposed to a few days previously. The other benefits, which cannot be immediately quantified are better customer service, fully automated sales, end-to-end tracking, document management, complete cargo visibility and prevention of revenue leakage with automated accounting and invoicing.
What segments of air cargo sector still continue with legacy systems that you think they can easily migrate to digital?
Any process which still needs paper or manual operations can be migrated to digital easily. In order to make digitization a success, every aspect and process should be touched by it. It should start with core operations and then move to other peripheral processes. We have generally observed that the SMEs in the air cargo supply chain are fragmented and are laggards in tech adoption. But with cargo community systems such as Kale’s Air Cargo Community System (ACS) and Logistics e-Marketplace, this gap is bridged. These unified platforms make technology, data, and best practices available and affordable to all supply chain stakeholders, including the SMEs. For example, in Mumbai International Airport and Bengaluru International Airport we have our CCS, which has 98% adoption, enabling the entire air cargo value chain to work as a synchronized operation.
One of the concerns of digital is the security of data, how does Kale address this?
With changing IT environments, cloudbased solutions offer agile and robust ondemand infrastructure with benefits such as stability, cost efficiency, and more. We must not forget concerns related to cyber security. More attempts have been made to steal passenger data (personal data, credit cards etc.) than cargo. Having said that, a shipment can often involve data or intellectual property transfer between up to ten separate parties across the globe, hence there is enough motivation for hackers to look at cargo data as well.
However, if there is an additional layer of a CCS, which typically has seven layers of security, and additional security layers provided by leading cloud providers like Microsoft and Amazon, the cyber security risks to the larger stakeholder systems go down significantl y. Icall it the democratization of cyber security. Cargo Community System (CCS) can democratize cyber security and help provide better security infrastructure to the smaller players and, by being a buffer layer with bolstered world-class security infrastructure, reduce the risks for the systems of larger players, too.
Digital being very dynamic, it calls for constant innovation. Can you name one game-changing innovation of Kale in the logistics industry? Also give the gamechanging attributes.
A cargo community system comes with some limitations as it has geographical boundaries, and to overcome the same and achieve larger synergies globally, one has to think beyond cargo community systems.
This brings us to the future of cargo community systems i.e., the digital trade corridor. The Digital Air Freight Corridor aims at creating a completely transparent supply chain through the exchange of real-time status of shipments between two airports and exchange of shipment data to eliminate duplicate processes. For example, shipment arrival information can be shared beforehand with the rightful stakeholders in the destination airport so that the Customs, handlers, and other stakeholders are well informed and prepared to handle the incoming freight on time. We have successfully established the first Digital Air Freight Corridor between India and Netherlands, powered by Blockchain.
Another prime offering is the e-Marketplace, an online portal for booking door-todoor cargo transportation services, offering competitive pricing and total transparency of the best shipment options across all modes of transport. The platform connects supply chain stakeholders; such as freight forwarders, Customs brokers, shipping lines, airlines, transporters, consignees, warehouse operators, rail operators and regulatory authorities, enabling them to adopt modern logistics practices that will allow better response to customer demand, increased efficiency and a more
competitive industry landscape in air cargo space.
The platform can connect with third-party systems, cargo community systems and systems of the airport authority and terminal operators to provide status updates. Along with digital, there is talk about sustainability. Please explain with specific examples how you factor in sustainability in customer operations. Sustainability is now a mega trend, as per the World Economic Outlook Jan 22. It’s no longer just important but a necessity. There is a perception by some airlines, airports and ground handlers that aviation’s reputation comes from the passenger business so there is no need to invest in sustainable cargo solutions as these are not visible. We must collectively change this situation.
We at the airfreight industry have a collective responsibility to our customers, employees and future generations to develop solutions creating a positive impact on people and the planet in ways that enhance business success, which in turn will lead to enhanced global prosperity.
Our CCS is developed as per United Nations recommendation 33, which sets the framework for sustainable trade facilitation through paperless operations. Kale’s Cargo Community System, used for airport and maritime community systems, enables electronic communications between multiple supply chain stakeholders. We want to add momentum to the global sustainability drive and be a key influencer for airports, ports, and supply chains globally to go paperless, improve digital connectivity, and reduce carbon emissions.
A study by Kale Info Solutions on the impact of digitization at Atlanta Airpo, Georgia, USA, has demonstrated CO2 and fuel savings, as well as reduced labor costs and close to 2,000 man-hours saved. The study showed that by using digital tools, the Atlanta Airpo Community, powered by Kale’s digital solutions, had saved nine tons of CO2 from being processed since the beginning of 2021: the equivalent of planting more than 1,500 trees. The study looked at 1,839 shipments, 389 trucks, and 680 tons of cargo going through Atlanta Airpo for the first seven months of 2021.
In total, more than 5,650 liters of fuel, USD 69,000 of labor costs, and 1,945 man-hours were saved by using Kale’s Slot Management tool to organize and facilitate the arrival and loading of trucks at the airport.
After two bad years due to Covid-19, how is the logistics industry looking and how can companies like Kale help them recover faster?
The last two years have been exceptional for air cargo as the pandemic induced just not uncertainty, staff shortages, and health risks but also made way for an eCommerce boom with congestion and high dwell times. These times have shown loud and clear that the logistics industry needs to stand unified to fight this battle.
As per WHO, the COVID-19 virus stays on paper for 72 hours, so contactless and paperless operations were the requirement of the industry. CCSpromoted this with Single Window Systems, powered by autonomous data exchange, online payments, eapprovals, digital signatures, barcoded gate-pass, digital customs, and e-delivery orders. The stakeholders enjoyed benefits, such as improved customer satisfaction with beer shipment visibility, improved data accuracy by 90%, security and reduced cost.
One of the most relevant offerings from our CCS is Truck Slot Management; here all truck arrivals and departures are managed as per slots to avoid gate congestion. Truckers experience much lower wait times at the terminal gates, & all documentation is predone before the truck reaches the terminal. The handler is equipped with advanced shipment information to plan the resources, equipment, and warehouse. The airlines receive an IATA-compliant e-AWB. So, all the actors are well synchronized, which ensures the cargo flow is seamless and quick, along with significant cost savings.
We hear some airports in Europe, including Heathrow, are stretched to deal with both passenger and cargo operations, how do you think technology/digital can help in addressing this resource crunch?
Business continuity was a big challenge during the pandemic times, with legacy systems and manual operations, the air cargo operations were poorly affected. Remote working was a novelty and the airports were not geared up to handle staff shortages. Because of the uncertainty of the times and the likely realities of the “new normal,” more and more airports are now charting the course for their journeys toward cloud computing and digital transformation.
Cloud-based applications enabled workfrom-home. Cargo operations continued uninterrupted with robust cloud-enabled platforms which enhanced productivity and collaboration. There was no need for heavy investments on infrastructure or highly trained staff to work on CCS.
Another point of contention was the COVID-19 virus staying on paper for 72 hours as per WHO and the paper-intensive air cargo industry had to move to paperless operations. This was an opportunity in adversity for the industry to adopt automation and digitization for information exchange, thereby making the entire supply chain efficient and agile.
Could you give details of your global operations – in how many countries you are present, the size of your client base, and the markets you are focusing on?
We have more than 5,000 customers globally in 30+ countries. We have been successfully engaging with 100+ air cargo stations across the world. We are focusing on North America as this is a big market for air cargo, and the geography is very receptive to digitization. We are engaging with Atlanta, Vancouver, Boston and many more airports are talking to us at this point in the region.
What are the challenges for a digital company such as yours when it comes to the logistics sector?
Unlike other industries, the logistics industry has varying degrees of IT maturity amongst its stakeholders. Large players have sophisticated IT solutions to manage their end-to-end operations, but the SMEs would still be on Excel-based data or worse maintain physical files. Though they are disparate in operations, what links them is the common data and cargo they handle at various times during the shipment journey. With different contours of IT systems, what suffers is the movement of cargo across the supply chain. There is data discrepancy, time-consuming operations, and a lack of trade visibility and transparency. Therefore, making the entire supply chain inefficient
Making the logistics fraternity aware of the benefits of digitization is the most critical part. In several regions, they are still reluctant for various reasons. In the Middle East especially, stakeholders believe that digitization will bring extra costs, and they need to set up a separate infrastructure for the same. However, not many understand that the tech solutions do not require a separate infrastructure cost.
What is Kale’s roadmap, say for the next 5 years?
We strive hard not only to stay relevant but try to create a digital future for the industry. We are working on expanding the reach and depth of our community platform by providing value-added features to the community like complete enterprise applications for Customs brokering as well as freight forwarding rolled out through our CCS platforms.
We are also working on creating the world’s largest digital logistics cloud for the international supply chain by creating a global network of airports and ports connected digitally through our Digital Corridors. We believe that the future is multimodal, so we are working on creating Sea-Air corridors to facilitate intermodal cargo movement. Our large communities will get integrated with our Logistics eMarketplaces, which are under development.
We continue to expand our operations across the globe. We are also working on implementing the deep tech use cases of IoT, Blockchain, AI, and ML in our community platforms.