The Coronavirus pandemic knocked down the whole world in unimaginable proportions. Uncertainties still abound with global infections rising to nearly 36 million and the new normal requiring new protocols to live and do business.
But thanks to a global concerted effort and strong support from certain industries like the healthcare, medical supply manufacturers, air transport, among many others, more lives are saved and economies have begun moving albeit slowly in the midst of the pandemic.
Progressive, proactive and agile, Turkish Cargo was among the world’s most dependable air cargo carriers that courageously fought the threat of the virus to ensure the fast and efficient delivery of vital medical and other basic essential supplies across the globe, enabling hospitals and healthcare facilities to treat patients, as well as sustain lives, jobs and businesses, struggling in an unchartered territory.
Fatih Ciğal, Senior Vice President of Cargo Marketing, Turkish Cargo, said Turkey’s national air freight carrier immediately took interim safety measures to protect their staff while adopting to the new market dynamics to meet the needs of their customers and sector counterparts.
“Apart from the transition of our office personnel to home-working,” Ciğal told Air Cargo Update in an interview, “we took actions with respect to mask supply and maintenance of social distancing for our operation personnel who continued to work devotedly, especially to safely transport and deliver food, aid materials, masks, medical equipment and other supplies, across the world to maintain the flow of the supply chain.”
“In addition, the required disinfection processes were and are still carried out regularly in the cargo terminal by applying fogging method through the solution approved by the Ministry of Health of Republic of Turkey, which has an action duration of one month. Throughout the pandemic, Turkish Cargo has been committed to transport health and aid worldwide, handling global operations 24/7 devotedly,” he added.
Global Air Bridge
Turkish Cargo’s market share in the global air transport industry grows each year. It now accounts for 1 out of 20 cargo carried worldwide.
Its success comes from Turkey’s continued push to further strengthen its aviation and air transport industry to support local businesses complemented by Turkish Cargo’s growing fleet & network, competitive rates and a reliable team of cargo and logistics experts who deliver the best service to customers.
Ciğal described Turkish Cargo’s role as a “global air bridge” with untiring commitment to ensure that the flow of goods remain uninterrupted despite these difficult times.
“We at Turkish Cargo continues our operations uninterruptedly by establishing a global air bridge,” said Ciğal explaining that this is achieved through adequate staff safety measures they have adopted in carrying out their duties.
“Our flight crews use masks, gloves, goggles and protective overalls when necessary. All of our aircraft are carefully disinfected before and after the flight. Mask distribution and temperature measurement are made to our staff and all visitors at the entrance to our facilities. Our personnel are supplied with personal disinfectants. Disinfectants have been placed at various areas of the facility.
“Our personnel and each person visiting our facility are subjected to body temperature check. Whole of our facility and cargo vehicles are disinfected periodically. The radios and similar common equipment are put into use after disinfection. The number of personnel was reduced and the social distance was increased. Waste bins were placed for used masks in our facility. As a global brand, Turkish Cargo is committed to take all preventive measures and prioritize human health.”
Global Logistics Ally
The International Air Transport Association (IATA) underscored how the air cargo industry has been an essential partner in the ongoing fight against COVID-19 transporting not only vital medical equipment, medicines and supplies but other basic essentials as well.
But the industry is facing difficulty addressing increasing demand for air cargo with most passenger planes still not flying, reducing significantly its belly capacity.
Belly capacity for international air cargo was 67% below the levels of August 2019 owing to the withdrawal of passenger services amid the COVID-19 pandemic, IATA noted. This was partially offset by a 28.1% increase in dedicated freighter capacity using passenger planes. Daily widebody freighter utilization is close to 11 hours per day, the highest levels since these figures have been tracked in 2012, it added.
Ciğal said the pandemic has essentially revealed how important the air transport industry and assured that Turkish Cargo stands ready to face the challenges.
“The pandemic has revealed how vital the airline transportation industry is, and Turkish Cargo’s role was critical in this process. We worked without slowing down, even more intensively, taking all the precautions,” he said.
“In this difficult period of time, Turkish Cargo’s key source of motivation was to be a part of the logistics solutions that meet the pharmaceutical, masks, medical equipment, humanitarian aid and food needs of the world. During this period of time, in which logistics is of vital importance, we keep working by being aware of our responsibility in maintaining the global supply chain, while we touch the lives of people in another part of the world and write different stories,” he continued.
2 Modern Tech-Driven Hubs
Apart from its vast global network and modern fleet, Turkish Cargo’s advantage is its two tech-driven hubs with modern facilities—one at Ataturk International Airport, the other at the newly-opened Istanbul Airport, currently the world’s biggest and most modern airport.
Both can handle large volumes of cargo safely, fast and efficiently. Last year, Turkish Cargo transported more than 1.5 million tons of cargo and despite the pandemic, it grew its global market share to 5.4 percent, carrying 1 out of 20 cargo hauled worldwide.
Ciğal said the company plans to fully move at Istanbul Airport by the first quarter of 2021, which would essentially boost its capacity to handle as much as 4 million tons of cargo and efficiency by adopting new technologies on its entire operations.
“Turkish Cargo has been investing in a brand-new hub at Istanbul Airport with the “SmartIST” facility, which is still under construction and has an area of 340 thousand m2 and where we plan to move in the first quarter of 2021. Our SmartIST facility with a capacity to carry 4 million tons of air cargo is being designed so as to be in conformity with the operational process, dominated by the industry 4.0, artificial intelligence technologies and digitalized processes,” said Ciğal, an industrial engineering graduate of Istanbul Technical University.
Investing heavily on technology, Turkish Cargo’s new hub at Istanbul Airport features the latest automated systems in warehousing and logistics that saves space, time and resources.
“We equip our SmartIST facility with Industry 4.0, Logistics R&D, Innovative studies and technological infrastructure. We will use two different systems, 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,” Ciğal explained.
“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,” he added.
Ready for COVID Vaccines
The world is eagerly awaiting the release of the COVID vaccines to prevent the spread of the virus and finally bring some normalcy to our disrupted lives that not only brought great sadness for those who lost their loved ones but for the living as well who lost their jobs, their businesses or were infected.
Equally important to the vaccine’s discovery is how it’s distributed across all corners of the world, both for the rich and the poor.
At least 8,000 747 freighters would be needed to transport a single dose of COVID-19 vaccines for some 7.8 billion people across the world, according to IATA as it warned of potentially severe capacity constraints in transporting vaccines by air.
IATA described the delivery of the COVID-19 vaccines as “the mission of the century for the global air cargo industry” that requires careful advance planning and cooperation across the logistics chains, across borders, to accomplish this task.
Turkish Cargo, with its hubs ideally positioned in between continents, and with its unparalleled access to routes is crucial to this mission.
Ciğal said Turkish Cargo is closely monitoring the situation and has taken all precautionary measures to do its part which would have a huge impact on humanity’s future.
“We closely follow the activities carried out for Covid-19 vaccine, and hope to get good news in this regard as soon as possible for the sake of all humanity…. We, as Turkish Cargo brand, are ready to do our share in the delivery of the vaccine across the world through our wide flight network, fleet and specialized teams,” he said.
Turkish Cargo carried nearly 30,000 tons of medicines and 10,000 tons of medical equipment, in addition to carrying special cargo such as human blood, organs and tissues, between February 1 to August 31, 2020.
“Between February 1 to August 31, 2020, when the maintenance flow of air cargo was of critical importance for human health and the pandemic’s impact was experienced heavily, we carried almost 30,000 tons of medicines and 10,000 tons of medical equipment, and we continued transporting other vital health supplies such as human blood, organs and tissues, as well as masks, humanitarian aid and food, uninterruptedly,” Ciğal pointed out.
Turkish Cargo, which has access to more than 300 destinations in 127 countries across the world, is globally recognized for its world-class expertise and facilities in handling shipments related to pharmaceuticals and life sciences.
It’s the first cargo brand to concurrently hold all three international industry certificates under the IATA CEIV (Center of Excellence for Independent Validators) program namely: the CEIV Pharma, CEIV FRESH and CEIV Live Animals.
“We are going through days when we noticed how vital the air cargo industry is, not only for world trade, but also in supporting a healthy global population, especially in these difficult times,” said Ciğal, adding, “The IATA CEIV certificates prove Turkish Cargo’s commitment to international standards in terms of special cargo operations, during such vulnerable and critical period.”
“And we proceed with due diligence in all processes. The IATA CEIV program is intended to ensure that any vulnerable cargo is transported and delivered at the highest standards, meticulously and punctiliously. Therefore, certificates stand out as more valuable than their usual importance and as proof of quality standards,” he added.
Turkish Cargo also strictly follow international protocols in carrying highly-sensitive products, apart from using sophisticated containers and facilities to protect them throughout the process.
“In our operations, we implement handling procedures that are in harmony with each other. We make use of active temperature-controlled Envirotainer and CSafe containers, the electrical air-conditioning container Opticooler, Thermal Dolly and disposable thermal sheets equipped with thermal isolation features and minimize any and all risks in highly-critical medicinal products,” said Ciğal.
This practice of applying new technologies and innovations is also extended to perishables flowers, fresh fruits and vegetables, frozen meat and fish, eggs, chocolates, dairy products, among many others,
Turkish Cargo is known for providing high-standard protection for these types of cargo through its sophisticated cold-chain facilities offering varying temperatures suited for each one.
Indeed, Turkish Cargo has come a long way and the future offers new opportunities and possibilities in the new normal.
On top of speed and operational excellence, one of the strengths of our industry is our professionalism and the great people who are part of the air cargo family. I am glad this crisis has revealed the air cargo heroes and hope this will not be forgotten.
Q&A with TIACA Chairman Steven Polmans
No one could have predicted that an unknown, invisible virus would shut the world for months, bury people and businesses in debt as well as cripple robust industries and economies in unimaginable proportions.
The Coronavirus pandemic is a tragic part of modern history that will be looked back upon with great sadness. It killed more than 900,000 people and infected nearly 28 million worldwide, thus far; millions have lost their jobs and billions across the planet still live in uncertain times.
The story doesn’t definitely end there. The pandemic remains a threat to all of us and certain industries like air cargo must double its efforts to step up to the plate and keep things going.
Steven Polmans, Chairman of The International Air Cargo Association (TIACA), the only global trade organization for the industry, shares his insights with Air Cargo Update, the industry’s growing importance to sustain lives, businesses and economies during these difficult times.
One of the industry’s most crucial missions is to deliver billions of COVID vaccines once it gets the green light for distribution.
Worldwide, at least 578 drugs and vaccines are reportedly in development targeting the virus. 34 of these are now in final clinical evaluation with the global biopharmaceutical industry innovating and fast-tracking everything.
Approximately 12-15 billion doses of the vaccines are needed, but there’s no assurance that much could be produced immediately given the manufacturers’ limited facilities and resources. Some vaccines may require just one dose, others up to three doses, requiring more production and shipments, according to experts.
The air cargo industry, which has shown its agility, flexibility, reliability and innovation during the pandemic, is crucial in hauling the vaccines around the world. Is it ready? The honest answer is not yet but it’s up to the challenge.
Read the rest of our interview with Polmans, who is also the Brussels Airport Director for Cargo & Logistics and Chairman of Air Cargo Belgium.
It’s been widely circulated in the industry that you’ve decided to leave Brussels Airport as Director Cargo and Logistics. What prompted this decision and what’s next for a man of your caliber who is known for growing Brussels’ cargo business and pushing for the industry’s agenda in general.
The past 10 years were remarkable, and with my team, we have been able to really turn the cargo business in Brussels into a success story. Increasing revenue and profitability, complete overhaul of the infrastructure, setting up a cargo community, digitization initiatives to make Brussels the smartest airport. So, I can only say I look back at this period with great pride and positive feelings.
But after 10 years, I also felt I needed something new, something challenging, pushing me a bit out of my comfort zone again. So, we were able to end my contract in good terms and I am really looking forward to what comes next. It is the first time in my life I am not having a job, so it is also new to me. Hopefully, however it will be in this industry as I really like it and I feel there is still so much that can be done and where I believe I could contribute.
You’ve been the Chairman of TIACA very recently but its membership has remarkably grown with strategic alliances with some industry groups. How did you do this? What can you say about this feat?
As the unique not-for-profit industry association representing and uniting the global air cargo community, we believe it is important to ensure our membership is diverse in terms of stakeholder type, company size, geographic location. Since last September, we did several things to increase the membership of TIACA:
We signed a partnership with Neutral Air Partner (NAP), a premier global network of 250 leading air cargo architects and aviation specialists from 150 countries, making all NAP members also TIACA members.
We introduced a separate category for small, medium and start-up companies allowing them to become a full TIACA member at reduced rate, as we believe it is the mission of TIACA to represent and unite the global air cargo industry, regardless of the size of the company and welcoming new entrants.
We launched the Sustainability program last year and project Sunrays this year, as a start to morph TIACA into a content-driven association. This evolution is attractive to companies who want to contribute to such initiatives.
Regrettably, as the industry is suffering and many companies are struggling to survive, we are also losing some members due to the COVID-19 crisis.
The Coronavirus pandemic has exposed vulnerabilities & strengths in certain industries. Please relate those weaknesses and strengths in the air cargo industry.
Weaknesses of our industry were already known: fragmented, complex procedures, slow digitalization, complexity in the certification and use of active monitoring devices, lack of clear visibility of existing capabilities of airfreight players at each location or by trade-lane.
We “discovered” at the start of the crisis our extreme reliance on passenger traffic to provide airfreight capacity. Capacity shortage was not an issue before, except at very peak times linked to Christmas and Single Days, but it is anticipated to be one of the major issues in the next months and years, until belly capacity is back.
On top of speed and operational excellence, one of the strengths of our industry is our professionalism and the great people who are part of the air cargo family. I am glad this crisis has revealed the air cargo heroes and hope this will not be forgotten
Another strength, despite opposite perception, is our great innovative mindset: airlines, handlers, airports, civil aviation authorities, manufacturers have all came up with solutions to the problems. The new “preighter” operations, Cargo in the Cabin, new equipment design to support them like Cargo Chute from JBT are prime examples of exceptional reactivity and solution-oriented approach we have in our industry.
What are the greatest challenges impacting the global air cargo industry’s growth and transformation in the digital age?
In the COVID-19 era, this is airfreight capacity, cash shortage and budget cuts affecting investments in infrastructure, both physical and digital. Before COVID-19, it was the slow pace of digital transformation mainly due to mindset and lack of priority given to cargo compared to passenger or to air compared to surface modes of transport.
In the post-COVID-19 era, we are hopeful that the profile of air cargo will be raised and heads of cargo will be invited more and heard better at Board discussions, that talented professionals will be willing to join and stay in this industry and drive its digital and sustainable transformation.
TIACA’s influence in the air transport industry is getting stronger as its responsibilities to safety transport vital goods across the world gets bigger. How is TIACA taking its role in this difficult and challenging times?
While the world is discovering air cargo’s vital role for a sustainable world, it is important for industry associations like TIACA to build on it and make the voice of our industry heard more and better.
TIACA is more relevant than ever in this context and to prepare the “next normal” as we are the only international trade association representing and uniting the global air cargo community.
TIACA’s challenge is to pursue its advocacy mission to defend the interests of our members and the industry, but also to set the vision for the future, building on strong partnerships, and developing products and services our members need now and will need tomorrow. We have to be visionary and pragmatic at the same time: this is our commitment to our members.
How do you help members adopt to the new normal, particularly those with no access to government assistance?
We are not yet in the new normal, times are still very uncertain. For a lot of smaller companies, this is having a bigger impact than for global companies with more support functions. Especially for those companies, joining a bigger alliance or association such as TIACA can help. We do have government contacts and access to other organization.
In recent months, several times, we were able to help individual members struggling to get their issues on the agenda of governments and authorities. When dealing with this crisis, decisions were taken that impacted passenger traffic but indirectly also cargo, often unknown or without realizing the impact. TIACA can help to create awareness and push to have cargo higher on the agenda.
There’s been plenty of talks a COVID vaccine is likely to be distributed for commercial use very soon. How prepared is the air cargo industry in undertaking this great task in your opinion?
The industry is not prepared yet, as we lack critical information of the future vaccines specifications, production locations, volumes, etc. But we are working on that.
Last month, TIACA joined forces with Pharma.Aero to launch project Sunrays. Our objective is to open dialogue with pharmaceutical manufacturers to collect these insights, as well as to gather intelligence on airfreight industry’s overall capabilities, plans and readiness to handle, store, transport and deliver the future vaccines.
What advice would you give air cargo carriers and logistics companies running cold chain facilities to efficiently handle this mission with billions of vaccines out to be distributed globally?
I am sure they are already doing it, but in case they are not, I would recommend they start discussing with their forwarders and pharmaceutical shippers now, do an inventory of their capabilities (in terms of skills/trained personnel; cool chain facilities, ground service equipment, ULDs, tracking devices, etc.), develop dedicated operating procedures to handle, store, transport and deliver the vaccines; set up dedicated teams; define what to do with the other cargo requests and manage customers expectations to avoid frustration, etc.
Air transport in developed nations are reliable but some remote areas as well as those facing civil and political unrest don’t have access to it. Is TIACA considering talks with international bodies to help in this area? Why or why not?
Yes, as much as possible, we would like to cooperate with international organizations like WHO, GAVI or UNICEF and share with them the intelligence we will gather. Our ambition is do ourselves what we are best in, and support others and join forces if it makes sense.
Please share some lessons we all could learn from this pandemic.
Still a bit early, as this pandemic is not over yet. We are not back to the new normal and I am also sure that seen the impact on (passenger) aviation on which we depend a lot, the future will look different.
But looking back, I think we must be very proud as an industry on what we did. We have shown agility, flexibility, determination, action and solution focused thinking. But all the weaknesses of the past are not gone: for me the biggest lesson is that this slow adoption of digitization, the lack of cooperation are things we need to tackle soonest.
Steven Polmans: Man of the Hour
Steven Polmans spent most of his career in the world of aviation and held management positions, both operational and commercial, in the handling industry.
On October 1, 2010, he joined Brussels Airport as Cargo Marketing Manager and on February 1st, 2012, he was appointed Head of Cargo and Logistics, responsible for developing and implementing the overall cargo strategy of the airport.
In 2016, Steven became one of the founding fathers of Air Cargo Belgium and was chosen to become the first chairman of this newly established air cargo organisation at BRUcargo, grouping all stakeholders involved.
In August of the same year, Steven also joined the board of TIACA, The International Air Cargo Association, of which he became Vice Chairman in October 2017. On April 1st, Steven was promoted to Director Cargo & Logistics and amongst his new responsibilities is becoming in-charge of all cargo real estate development and portfolio management.
In July 2019, Steven took over the role of Chairman at TIACA, a position he still holds today.
Every day, more than 100,000 flights roam around the global air space, carrying nearly 12 million passengers and about US$18 billion worth of goods in aircraft belly.
But that’s history now and no one knows when the global aviation industry will return to normal although some countries have resumed flights despite the Coronavirus pandemic.
It was just in March of 2020 when the lethal invisible Covid-19 virus struck yet its impact will be felt for many years to come and it will go down in history as one of the worsts with deaths of nearly 700,000 and worldwide infections rising to over 18 million with still no vaccine found.
The months of forced lockdowns worldwide to prevent the spread of the virus inevitably resulted to loss of business activities and jobs. It forced many companies to shut down operations, including the aviation industry which prompted airlines to ground their fleets of planes amid the global travel ban.
The Coronavirus pandemic crisis continues to keep everyone on edge but the onus of delivering essential services to sustain people, businesses and economies despite the situation, is greater on certain industries like healthcare, air cargo, logistics, among others.
Resilient & flexible
The air cargo industry has proven once more its flexibility and resiliency in times of disaster and extraordinary circumstances to support the world’s need for essential supplies.
Wilson Kwong, Chief Executive of the Hong Kong Air Cargo Terminal Limited (HACTL), one of the world’s largest and busiest cargo terminals which also owns and operates SuperTerminal1, the single largest multilevel air cargo terminal in the world, told Air Cargo Update in an exclusive interview the pandemic has changed the dynamics of the industry and that the new normal presents both challenges and opportunities.
At the height of the pandemic, the air cargo industry kept the global supply chains functioning, delivering much-needed medical supplies and equipment as well as other essential goods. Cargo carriers kept their freighter operations while airlines helped by having their passenger aircraft converted to freighters to meet the growing demand for essentials in the fight against the virus.
Hactl immediately adopted precautionary measures to protect its staff while performing their duties more than the usual with the demand for medical supplies all over the world heightened.
“The impact of the pandemic has shown itself both in how we work, and for whom we work. We took very early action to protect our staff and visitors to our terminal, and also to help ensure business continuity,” Kwong shared.
“Our many measures included temperature scanning of all arriving personnel, moving as many staff as possible to homeworking, rearranging shift patterns to minimize the number of people on the premises at any one time, issuing masks and sanitizer to all staff, distancing arrangements in our large catering facilities, and a ban on business meetings and business travel.
“Thankfully we have had no cases of COVID-19 among our staff at the time of writing, but we are not complacent and are retaining and constantly reviewing our protective measures.”
Hactl is capable of handling 3.5 million tons of cargo every year and more than 1 million data transactions on a daily basis yet its capacity and capabilities were put to the test during the height of the pandemic with the extraordinary movement of freights.
“The pandemic has also changed the profile of our business. At its peak, 95% of the global passenger fleet was grounded, and that lost cargo capacity had to be replaced. The result was significant growth in freighter movements and, as Hactl and Hong Kong are noted for their proficiency and capabilities in handling cargo aircraft, we received a lot of those flights,” said Kwong.
“Although the needle is gradually moving back towards the passenger belly, freighters are uplifting a bigger share of global air cargo than they have done in the past,” he continued.
‘More like a family than a business’
Founded in 1971, Hactl began its air cargo logistics operations at the Kai Tak International Airport in Kowloon Peninsula in 1976, becoming the only air cargo terminal operator in Hong Kong.
In 1998, Hactl moved to SuperTerminal1 which it built at Hong Kong International Airport with an investment of $1 billion. A significant number of its employees have been with the company for many years, some even for decades, mainly because they are treated with fairness and enjoy good fringe benefits.
“Hactl is more like a family than a business. Our workforce is very stable and dedicated, and we have many long-service employees; and our staff know we care very much about them,” said Kwong.
“When everyone saw how this global crisis was developing, and the key role we needed to play in getting PPE and other urgent supplies to destinations around the world, there was not a single moment’s hesitation on the part of anyone – they just got on and got the job done. I can’t tell you how proud I am of them; the patience, determination and sheer hard work which our team put in over the past few months have left me in awe,” he added.
As of press time, not a single staff of Hactl got infected with COVID-19. The company’s health protocols remain in strict implementation.
Kwong said apart from the staff’s dedication, it helped that Hactl invested so much in technology and automation to speed up the process of handling cargo in large volumes.
“The high degree of automation within our SuperTerminal1 facility, and our plentiful space and capacity meant that we were able to cope with the influx of freighter aircraft and the frequent spikes in demand. And as we have our own integrated ramp handling operation, this made adapting to sudden changes in traffic patterns and demand a much simpler matter,” he said.
Kwong believes the volatile situation is likely to continue and the important thing is for the industry to quickly adopt and deliver its tasks.
“We believe there is too much concentration on whether tonnages and flights are up or down, as if this is something over which any of us has any influence. The truth is, there are many factors at play which are totally beyond the industry’s control, and that’s going to continue for some time,” he said.
“What matters most right now is our ability to move whatever cargo is presented to us, and we are doing that despite all the challenges. We are all in this together and we need as much of our sector as possible to survive – or we will emerge with a weakened global industry that will negatively impact us all.”
A new era
The pandemic has ushered in a new era that requires combining creativity and innovation in different fronts and industries to survive the harsh realities.
According to the International Air Transport Association (IATA), the global passenger traffic will not return to pre-COVID-19 levels until 2024.
This year, global passenger numbers are projected to decline by 55% compared to 2019 despite easing up travel restrictions. That meant billions of losses for the aviation industry and lesser belly-hold capacity for the air cargo for the long-haul.
“Aviation faces a new reality in which passenger numbers are likely to remain depressed for a long time to come. Cargo has meanwhile carried on providing revenue opportunities for airlines when there were no others. It doesn’t take a genius to predict that cargo is going to receive a lot more attention in the future,” said Kwong.
This new reality could force many airlines to continue utilizing passenger planes for cargo to survive.
“This could manifest itself in a move to re-introduce the quick-change aircraft concept, it could lead to more P2F conversions using redundant passenger airframes, and it could result in growth in the freighter wet-leasing sector. What’s clear is that cargo demand has survived better than passenger demand, rates are stronger at present and likely to remain so, and that this spells opportunity,” explained Kwong.
Technology will drive the future
Our day-to-day lives have been completely changed with the evolution of technology from the time computers were invented, the internet, to the smart mobile phones. It has made the world smaller with connectivity made simpler and faster, giving us unparalleled access to people and businesses anywhere in the world.
We’re now in the era of the Fourth Industrial Revolution, or Industry 4.0, which takes digital technology to a whole new level of making interconnectivity stronger through the power of the Internet of Things (IoT), artificial intelligence (AI), big data, analytics, new cyber-physical systems and access to real-time data. These things will completely change how services are done and customer experiences different from bygone eras.
Hactl has long recognized the power of technology to speed up the process in cargo and logistics. Its own business model is focused on automation and sophisticated IT capabilities, both proved very resilient during the pandemic.
And Kwong said the company will continue to invest on technology to further enhance its capacities and capabilities.
“We continue to drive ever greater efficiency in our business daily, led by our Performance Enhancement unit, which proactively seeks out and destroys all inefficiencies. Some of its ideas may seem trivial and unexciting to outsiders – like our new system for inspecting our ETV system power rails and automatically reporting potential faults – but they add up to better business continuity, cost savings and even a reduced carbon footprint,” said Kwong.
“Apart from the possible future deployment of driverless vehicles and GSE (which is an ongoing project), we are probably now beyond any massive new developments – nowadays, it’s more about finessing what we already do well,” he added.
And while political instability continues to besiege Hong Kong with China asserting its power over the former British colony which was handed over to it in 1997 under the one country, two systems agreement, Kwong is convinced Hactl will continue to grow and even Hong Kong for that matter.
“Business has been challenging in 2020, and that will continue for some time to come. But we remain optimistic and confident in the future for Hong Kong and for Hactl. As an airport, we offer an unparalleled combination of strategic location, destinations, frequencies, main-deck capacity, large-scale freighter handling capabilities, modern Customs regime, bilingual workforce and legendary efficiency and work ethos,” said Kwong.
“It’s no accident that Hong Kong has been the world’s top international cargo hub for 10 years, and I don’t see that changing.”
Wilson Kwong: The conscientious leader
Wilson Kwong became the Chief Executive of Hactl in March 2018. Prior to joining the company, he was the Chief Executive of Jardine Engineering Corporation.
He began his career with Jardine Matheson Group in 1998 with Jardine Aviation Services before moving to the head office to work as Executive Assistant to the Group Managing Director. Following this, he held senior management positions in real estate development, property management and engineering services.
Passionate in serving his community, Wilson also holds key positions in various organizations—Vice Chairman of the Employers’ Federations of Hong Kong, Vice Chairman of the Environment and Sustainability Committee under the Hong Kong General Chamber of Commerce, and was a Director of the Business Environment Council.
He is also active in Advisory/Statutory Boards & Committees for the HKSAR Government. He is a Member of the Energy Advisory Committee, a member of the Advisory Committee on Agriculture and Fisheries, a Co-opted Member of the Hospital Governing Committee of Queen Mary Hospital and Tsan Yuk Hospital, and a Council Member of the Hong Kong International Arbitration Centre.
A graduate of the London School of Business and Political Science, Wilson also has two Master’s Degrees—business administration and real estate. He also holds a degree in law from the Chinese University of Hong Kong.
Read on some of his industry insights on this unprecedented time in our lifetime.
The logistics industry’s significance has become more visible in this era of pandemic and e-Commerce. How do you see it evolving as a vital component in sustaining global trade? What about its challenges?
Kwong: Logistics as a whole has learned some valuable lessons from the pandemic, and has already begun to change and adapt. Companies globally are developing new ways of working with distributed workforces. And industry is building in new supply chain resilience by diversifying its suppliers.
I think our industry and our markets are also learning that the days of rock-bottom rates—both ocean and air—are over, if we are to have an industry that can respond quickly and effectively to any future crisis. This has been a necessary re-set: the logistics industry could not have continued as it was for much longer.
Air cargo will remain the elasticity in supply chains, rather than greatly growing its share of global trade. As such, it will continue to command a premium. And, now that the man in the street has seen the air cargo industry’s heroes at work on his own TV screen, helping to save lives by keeping vital supplies moving, I think logistics will enjoy a new respect and be more valued in the future.
Please share some lessons we could all learn from this pandemic crisis.
Kwong: Information Technology really is the key to future resilience for this industry. We must accept the painful idea that COVID-19 may not be a one-off event, and so we need to ensure that our industry can continue to perform while staff levels are depleted, and while workers must work remotely. The better we become at passing information without paper or contact, the less we will be impacted by any future crisis.
It’s a safety issue, too. There is nothing more precious than human life, and good health. As well as being the right thing to do, it makes sound business sense to look after your workers, so they can take care of your business. That’s why Hactl will retain all its protective measures until any threat is totally removed.
And, as I said before, we need to take air cargo more seriously as a function of the aviation sector: aircraft fleets need to be more flexible, airports need better infrastructure for cargo, and we need to value our product more highly. Imagine what a COVID-19 world would have been like without the air cargo industry.
It was one of those shining moments for Eng. Majid Saidgul Babasheikh Barzanji, the Chairman & Executive Director of MATEEN Express & Logistics Iraq, who also serves as the Executive Board Member of the National Association of Freight and Logistics-UAE (NAFL) and chairman of the Courier & e-Commerce Subcommittee, as he recalled how the logistics industry pulled through during the early days of the Coronavirus pandemic in China.
Heading a great team that is passionate about air transport and logistics, Majid was among the movers and shakers who led the industry out of the woods and on stable ground, particularly in Iraq, his home turf.
“Through our good communications with different governmental departments across multiple regions, we quickly obtained the necessary permits for 3 main activities: clearing the inbound traffic of shipments already in the pipeline; transferring these cargoes to our national hub for sorting and storing; and lastly the one we are most proud of, delivering the necessary shipments to their final addresses,” he said in this exclusive interview with Air Cargo Update.
Majid has not blinked an eye on what lies ahead for the industry in light of the current situation.
“I think the pandemic has proven that the air cargo industry is, in general, robust and agile, adapting to situations quickly and creatively. The same goes for the supply chain and logistics generally.
“Every element and every aspect of our industry has room for improvements and optimization. Collaboration within same company or group, reaching out to rivals, going untapped path, involving more technology, changing or modernizing the rules and regulations, we will see all these and many more as time unfolds,” he said.
Read on the rest of his insights in this Q&A.
The Covid-19 pandemic required quick and extraordinary commitment from the air cargo and logistics sectors to deliver valuable cargo like medical supplies to sustain lives and livelihood. How did MATEEN Express handle the situation?
We handled it quite well, fortunately, I would say in two stages, and here is how.
As we have two main branches in China since 2007, especially in Guangzhou, we came to know what to expect early on. So, even before March 2020, we got all our branches preparing for complete or partial lockdown, lack of mobility and working from home. So, by the time the KRG (Kurdistan Regional Government) announced the first lockdown starting 14 March 2020, we were not taken by surprise. In fact, we were quite well prepared.
Through our good communications with different governmental departments across multiple regions, we quickly obtained the necessary permits for 3 main activities, clearing the inbound traffic of shipments already in the pipeline, transfer those cargo to our national hub for sorting and storing, and lastly, the one we are most proud of, delivering the necessary shipments to their final delivery addresses all over Kurdistan and Iraq, despite the complete lockdown in Kurdistan and travel ban between the cities. We refer to this as Stage One.
Those volumes were already on the go, medical and personal protective equipment, seasonal commercial cargo, few projects, some oil and gas and telecom related.
Stage two is the critical times where almost all new cargo volumes where medical and life support related, and every hour counts. All this while, life in the rest of Iraq, UAE and the region goes as normal, for another 10 days.
Learning from our Kurdistan region experience, we got fully ready for the UAE lockdown (National Disinfection Program). Bear in mind, as the UAE is quite advance in all aspects, our industry was exempt from the lockdown.
Please share with us some of the challenges MATEEN Express experienced in delivering vital medical supplies to Iraq and other parts of the world. How did you manage?
Just like any other operator, we have faced many challenges, the toughest being how to get the medical support mainly from China to Iraq, via UAE and other transit routes.
Towards the end of March 2020, almost every cargo aircraft available on the market was dedicated to export pandemic related traffic out of China which made the availability and cost of the aircraft way too difficult to predict, let alone to secure.
This led to multiple hikes in the cost of air cargo, not expected by the customers and sometimes too difficult to fathom, on one hand, and very less flexibility left to match the supply of the cargo with aircraft availability and/or capacity availability.
Yet we managed through good and trusting relationship with our long-standing partners, and in some areas, through collaboration with operators that we were not engaged in business prior to those days.
Another challenge was trucks crossing the international boarders during the pandemic and quarantine requirements. This has put so many operations to a hold. However, one solution we came up very quickly was changing the trailer head at the border, and so minimized the impact of this new challenge, and moved on.
How busy was MATEEN Express during this pandemic crisis? What types of medical supplies you delivered and in which places?
Our Kurdistan, Iraq and China branches were very busy and under enormous pressure, but the UAE and Turkey were kind of quiet.
We have made major contributions in the shipping lots of medical, ventilators, testing kits & PPE from multiple locations in China, with direct exports from the mainland and also via Hong Kong to Iraq direct and via transit routes.
Shipments just arrived from China, being prepared to move forward to Baghdad & other cities.
Here in the UAE, we were mostly engaged in flight operation connecting China to Iraq for the medical supplies. Also, with whatever Iraq-bound exports of Oil & Gas and ITC volumes, with less medical related cargo due to export rules and restrictions.
How do you see the future of air cargo and logistics in light of what’s happening?
I think the pandemic has proven that air cargo industry is in general robust and agile, adapting to situations quickly and creatively. The same goes for the supply chain and logistics generally. However, due its own nature, the air cargo industry is always grabbing more attention due to the immediate results people are looking for in both success cases and otherwise.
We have seen many nations deploying all government resources including air force and air mobility divisions responding to the national supply needs due to the pandemic. Civil aviation approved passenger freight operations, removal of seats in certain cases.
Sure, on the commercial side, logistics industry in general and air cargo, correspond to the global economic trends.
Nevertheless, the air cargo industry remains on top of the supply chain with high demand for the foreseeable future.
Having said so, I do believe we all have learned valuable lessons from the situation. Every element and every aspect of our industry has room for improvements and optimization. Collaboration within same company or group, reaching out to rivals, going untapped path, involving more technology, changing or modernizing the rules and regulations, we will see all these and many more as time unfolds.
What challenges are you seeing as far as the Middle East logistics is concerned?
There are quite many challenges around here: instability in the region, leading to some kind of demographical changes, drop in oil prices and its impact on the regional economies forcing some governments to hold or postpone projects. Also, new routes from China to final destinations like Africa & Europe, partly impact the volumes used to move via the Middle East, and probably we see more volumes leaving as the road and belt initiative get more into shape.
Please update us with the different multimodal services/ specializations that MATEEN Express currently offer to customers and other potential clients. Please elaborate and specify each one.
Historically, air transportation to Iraq and express delivery have been the backbone of our success. However, driven by the growing demand in quality logistics and transport services in oil & gas and projects sector in Iraq, we diversified our portfolio and secured some great contracts for many years.
Yet, as Iraq being very unstable for many years, MATEEN Express eventually expanded its geographical coverage to GCC and MENA region in general since 2016 onwards, focusing mostly on challenging and specialized logistics solutions, like oversized, heavy and bulky, dangerous and multimodal.
One of Our Repair & Return Logistics Solutions for Energy Sector in Iraq.
Last year, we were awarded a contract to move precast concrete in the GCC for more than 1,300 trips of specially equipped fleet. And the last phase of this contract coincided with the Covid-19 outbreak.
Also, during January 2020, we were awarded another contract to move raw materials from multiple origins to the GCC and the final products to half a dozen destinations in Europe. Again, highly specialized multimodal and multistage logistics and transportation were managed mainly by our team’s professional and creative approach.
Every company is now on survival mode following months of lockdown all over the world. How important is honesty and integrity in today’s business scene to make things work and help in the recovery efforts?
Well, we have proven to ourselves and our community, yet again that it is all in the Core Values.
As we could see from our China branches what is going to happen if the virus spreads in our regions, we have had very open and candid discussions with our entire workforce across all our stations.
As early as mid-March, we declared to our staff that this will be the last month we expect to have our full wages. And everyone was advised to strictly budget themselves for months to come. I am very humbled by the trust and loyalty of our people everywhere.
In March-2017, we increased the salaries by 6% across the group, with no real business improvement expectations. Our team appreciate these gestures and has gone the extra mile during these tough times to ensure the service remains functional and we keep the company safeguarded.
We have not laid-off a single staff due to the pandemic. Yes, we cut on many luxuries and reduced salaries for April and May, but kept our people on their jobs.
It is a harsh reality; no service provider can sustain by moving only medical and top urgent necessity shipments alone.
Our business has always been flourishing with stable and prosperous times where there is trade and development. However, during this difficult time, we keep moving forward and holding up, while we focus on training, optimization, cost reductions and many other initiatives.
I am equally thankful to our customers and partners who kept trusting us during this unprecedented time.
We started publishing regular updates on what is happening in Iraq through our website and social media, even before the mainstream media get them through.
This extra level of integrity and transparency was very important for our customers, contractors, service providers and staff. We kept everyone in the know of what is going on and what to expect next. And we certainly had moments of hesitation whether to share the info to the public or withhold to avoid any possible panic and let the public find out later on mainstream media. Yet, we decided early on, that we will keep our message brief, clear and concise.
MATEEN Express is known for its cost-effective solutions and honesty, which are now more relevant, given today’s unprecedented global crisis. Please share your thoughts on this subject as far as companies seeking your services are concerned.
Well, thank you for thinking nicely about us. I would say, the traits we are mostly known for are, trustworthy & reliable. When we started back in 2003 & 2004, all the concepts and services we introduced in Iraq were all new, and never tested prior to us.
So, a major reason for customers to get on board was our honest approach. Then we gradually proved our worth to be Trustworthy & Reliable not only to individual customers, but to SMBs, Corporates, MNCs and Interline Partners, Integrators and Freight Forwarding partners as well as Governments.
Time and time again, customers are telling us on different levels, why they stick with us. The core values we live by are not brochure and presentation materials, in fact it has been our guiding principles in every aspect and since the inception of the company; in our recruiting, selecting business partners & associates, proposing solutions to critical situations where things can get blurry, and so on. Most of the time, you will have to sacrifice an immediate or short-term gain in return to stick by these values and principles, but in the long run you will harvest what you planted.
And the beauty of living by sound principles is, for as long as you stand by such high principles and practice them in your daily business, you gain the trust of your surroundings and you get loads of ideas and insights, feedback and advices. And word of mouth proved to be one of the best ways to connect with new potential customers.
Having said so, one has to keep his tools sharp and his people prepared and motivated, and adapt to the new realities and market evolution and new technologies breaking ground every day.
I can humbly say, when it is about Iraq, you don’t need to think further, we always have you covered.
The Coronavirus pandemic has so far infected nearly 7.5 million and killed over 420,000 across a broad spectrum of people worldwide. Beyond creating a global health crisis, it plunged the world’s economy to unimaginable lengths with recovery still uncertain until a Covid-19 vaccine is produced.
The months and weeks of lockdowns in major cities worldwide to prevent the spread of the virus pushed business activities to fully stop resulting to financial upheaval, massive unemployment and a deep global recession.
World Bank forecasts the global economy to shrink by 5.2% this year, the deepest recession since the Second World War, with the largest fraction of economies experiencing declines in per capita output since 1870. The global aviation industry appears to be the worst hit with billions in losses.
The blow is hitting hardest in countries where the pandemic has been the most severe and where there is heavy reliance on global trade, tourism, commodity exports, and external financing, World Bank noted, adding that while the magnitude of disruption varies from region to region, all countries have vulnerabilities magnified by external shocks.
Amid this, one industry, air cargo, seemingly underrated despite accounting for one-third of the world’s global trade, took the center stage during the pandemic, reinventing itself to quickly supply the world with vital medical supplies, food and other necessities.
Adrien Thominet, CEO of ECS Group, the largest integrated GSSA worldwide with over 95 subsidiaries and 153 offices spanning across over 50 countries, in an exclusive interview with Air Cargo Update, shares his insights on the pandemic, the air cargo industry’s expanding role and the Group’s increasing involvement in sustaining people, communities and livelihood as the world fights off its biggest crisis.
The Coronavirus pandemic has disrupted the global economy in unimaginable ways apart from endangering the lives of billions, infecting over 7million and killing more than 420,000 worldwide.
How bad was its impact on ECS Group and your clients’ operations and how are things now that countries are slowly easing up lockdowns and restrictions?
We are currently living in a time of unprecedented crisis with terrible impacts on our personal and professional lives. This period has been a time for introspection, for questioning, and for rethinking the way we do business. In short, our relationship with the future has changed.
From the beginning of the crisis, we at ECS Group very quickly put in place processes to ensure the health and safety of our employees all over the world, which was our top priority. Alongside this, we focused on business and on the best way to support our customers, who were also impacted. In particular, we concentrated our efforts on yield management and clearly, our home-made tools have been a real asset in this.
By working together hand in hand, focusing on the field, we have been able to limit the terrible consequences of the crisis as far as possible. We are suffering together, but it is also together that we are finding solutions. The responsiveness of our teams all over the world in this regard has been truly exceptional, as has been their commitment.
The future is of course uncertain, and it will depend to a significant extent on the sector’s recovery, which itself is intrinsically linked to the recovery of the world economy. But we believe in ourselves, and we prefer to move forward, suggesting new solutions to our customers in order to avoid simply passively responding to a situation that we cannot control, playing instead an active role in the recovery. That is why we are launching new services aimed at our customers based on our experience, which will help them to get back on their feet and to build a sustainable future for their cargo activities.
What is your hope for the air cargo industry and the aviation sector in general in light of what’s happening?
I always prefer to take action rather than simply hope. Of course, our aim must be for a quick recovery and government support, coordinated at a global level. But we cannot just wait passively, simply ‘enduring’ events.
We have used recent weeks to make progress, to learn from this crisis, and to reflect on how to emerge from it, which is just as crucial as the time of crisis itself. Economically, this pandemic has been a disaster for many air cargo stakeholders, but it has also helped us to understand our weaknesses – and so we have worked on addressing them.
The new services that we are launching are in response to these issues. Professionalizing each aspect of cargo-related activities by outsourcing them to dedicated experts as part of focused organizations is at the core of these new services.
Do you think the pandemic has changed people’s perception about the importance of the air cargo industry not just as an economic enabler but also as life-sustaining with millions of medical supplies that it transports regularly? Please elaborate.
Yes, that’s something we’ve seen. Air freight has revealed itself to be absolutely vital in many countries where medical equipment was not produced locally and the speed of this method of transport made all the difference.
The industry, once little-known, has taken centre stage. The pandemic has highlighted our ability to reorganize ourselves extremely quickly when faced with a crisis. Our field expertise and the agility and determination of our teams have been remarkable.
For example, to fight the pandemic, the GAC team in China, working with the GAC Germany team and our Cargo Ops Expertise team, launched the first charter flight from Shanghai early on in the crisis. Since then, over 350 charter flights have been operated all over the world.
We pay tribute to the determination of all of our teams in the field and their ability to organize new routes and new connections to respond to the urgent situation and meet people’s needs. In this light, while we can’t describe every operation that has been conducted, all of them reflect the desire to never give up.
All of our teams have been mobilized, and all over the world they have been extremely responsive. The most connected routes in particular have been within Asia, from China to Europe, and also from Europe to Central America. In particular we have transported medical equipment of all kinds, of course, but we have also ensured logistics continuity (transporting lots of perishable goods and postal products and of course purely industrial operations).
This leads me to another point: while we as air cargo stakeholders were already aware of it, it seems to me that governments and the general public have become aware of the impact of cargo on the world economy.
Around the world, ECS Group teams have worked extremely hard. We’ve worked in very close partnership with 16 airlines. Together, we have been able to adapt ourselves and convert passenger aircraft into ghost flights. In two months, we have worked on over 350 flights to help fight the pandemic and ensure the survival of people and their local economies.
Different countries and pharmaceutical firms are on a race to find the vaccine for COVID-19. Once a vaccine for the virus has been developed, billions of vials ought to be transported worldwide, how prepared is the global air cargo industry in your opinion to undertake this task?
We all hope that a vaccine will be found as quickly as possible. In my view our entire industry has demonstrated its ability to react, faced with the need for urgent transport. Once again, air cargo will be the only industry capable of meeting people’s needs in terms of vaccines, while ensuring safety and compliance with relevant health regulations (temperature control, etc.).
To take the example of ECS Group, we have proven our charter expertise during this pandemic. It is one of the ways in which we have been able to meet very high demand from our customers during this period, whether they be freight forwarders or airlines.
The pandemic has prompted many companies to focus more on tech-driven systems to keep their operations. Please share with us the latest tech innovations that ECS has introduced or thinking of having in the future.
Yes, this crisis – especially with the lockdown that it required – has revealed a number of issues in our industry and in particular the need for new technology.
Firstly, it has become clear that perfect management of all aspects of logistics linked to pharmaceutical products is essential in order to be able to play a crucial role in this fight against the pandemic. In addition to the fact that all of these new technologies are powerful tools that facilitate our daily work, they are also essential in managing activity.
And beyond these technical aspects, technological tools have also shown themselves to be a key ally in the daily management of cargo activities. The priority in situations such as these is to simplify operational agents’ work by allowing them to respond to demand in record time, optimize holds, and work in an even smarter way.
Having access to sophisticated analysis, planning and pricing tools has allowed us to remain effective. Our customers have been able to count on us at a time when cost savings were absolutely essential at all levels.
And it’s from that very standpoint that we have worked closely with our customers during this time to refine our tools to ensure they meet their concrete needs. Even before the crisis, our aim was to implement e-booking platforms. In recent months, we have been able to develop effective decision-making and strategy tools that are perfectly in line with our customers’ new expectations. And as such, we are all coming out of this stronger.
Apart from doing GSA, your company is also into full cargo service. Kindly share with us in details the different services that ECS Group is offering to its clients worldwide.
That’s right. We don’t simply offer our customers the traditional GSA services – we anticipated the changes to our industry and created new services as a result. We have long offered GSSA and TCM services. We work to ensure we always meet the needs of our customers better and more comprehensively by creating new solutions that suit the changes they are undergoing.
Before the crisis, we had already modelled the new services we wanted to offer our customers, which were totally unique coming from a GSA. This truly extraordinary period in the true sense of the term has allowed us to go even further and to incorporate issues linked to the crisis in order to constantly better respond to our customers’ needs.
As I said earlier, professionalizing all cargo activities appears more essential than ever before. You need digital experts who are capable of creating custom-made digital tools tailored to your own needs. You need to maximize your airline’s cargo revenue via bespoke analyses and a customized pricing policy.
You need to manage quality, safety, security, customs and all other purely operational aspects. In today’s world, a traditional GSA can no longer meet these needs. Expertise and flexibility are essential. This is the model that ECS has adopted.
Please share some positive thoughts that people/ companies should consider while facing this pandemic.
The adaptability of our teams in the field and of airlines, the determination to never give up and the spirit of togetherness between stakeholders in logistics chains and within our subsidiaries all over the world all prove that we are absolutely on the right path.
Progress is in our sights. We have had no other choice than to take an introspective look at ourselves. Now, we are continuing with our quest. We will need every person who is a driving force, especially young people.
The amazing capacity for resilience of the younger generations is an asset for our industry – anticipating, building, inventing and starting over to create essential solutions. I have every confidence in these driving forces and in their beneficial impact within our industry. Let’s allow them to create their own norms.
The second edition of the NexGenLeaders challenge is currently being prepared and we too will be NexGenLeaders! Whether it’s sustainable development, technological developments, more powerful solutions, or skills, all necessary transformations are initiated by the same passion: progress. And that’s where ECS is clearly positioning itself. ECS Group: Made in Progress.
ECS Group Invests on Digital Innovations
In the digital world, everyone can be connected to anyone, anywhere and in real time. And in the transport industry, this is extremely important. Cognizant of this growing trend, ECS Group ventured into three new services harnessing the power of new technologies.
Cedric Millet, ECS Group Strategy and Digital Officer, explained these new services—the Cargo Digital Factory, Cargo Commercial Planning and Cargo Ops Services—are perfectly suited for their partners and clients, all conveniently housed under the single roof “freight firm.”
CARGO DIGITAL FACTORY – Cargo Digital Factory seizes the opportunities offered by digital technology, and tests, invents and builds process analysis and optimization tools as well as tools to develop and implement digital solutions. The experts from this laboratory offer innovative and tailor-made solutions to boost our clients’ performance and optimize their revenue. Today, a number of tools are already operational, and others will be launched very soon.
First of all, our in-house teams have developed a state-of-the-art next-generation market intelligence and reporting system called Apollo. Apollo is a real-time system that combines market data and internal information, and is used for sales planning, reporting, performance monitoring and performance improvement purposes.
Secondly, for the airlines that we represent under a TCM (Total Cargo Management) contract, we have developed a tracking system (called PathFinder) with best-in-class functionalities, including advanced notifications and real-time geolocation of shipments during flight.
Today, PathFinder is one of the best tracking systems within the airfreight industry. For these airlines on TCM contracts, we have also implemented a range of solutions that ensure seamless connectivity with the various industry players, including handling partners and customs authorities.
The Group is on the right track in terms of digital and has made the necessary investments in the right specialists, with one objective: to innovate and perform on behalf of our airline partners.
CARGO COMMERCIAL PLANNING – It is no secret that all airlines are primarily looking for revenue optimization, and this is exactly what we are offering them with the “Cargo Commercial Planning” service, supporting traditional GSSA commercial activities.
We have designed tailor- made commercial planning processes (pricing, revenue management) combined with performance management processes (sales steering, load factor improvement, destination mix optimization), supported by digital tools developed by our Cargo Digital Factory.
We are extremely proud of our state-of-the art business intelligence and reporting system (called Apollo), which gives us real-time visibility of results and allows constant monitoring of principals’ performance.
Apollo also helps us identify performance improvement drivers, a key factor in improving our airline customers’ results.
Our Cargo Commercial Planning service also covers activities related to budgeting & forecasting and interlines management. It offers fantastic support in terms of structure and in terms of analysis, monitoring, and therefore decision-making processes.
CARGO OPS SERVICES – A team of experts dedicated to managing airlines’ operations and quality, safety and security functions.
This in-house service is one-of-a-kind and is capable of managing all of the following: Audits, quality and safety management systems, laws and regulations, and all aspects linked to network operations: ULD management, customs procedures, management of suppliers and contracts, handling manuals, handling supervision, and more.
Our teams have all the necessary certification, are constantly given regular training, and work with the very latest technology.
There’s no escaping the truth: We are facing a deep global recession never before seen in our lifetime as nations struggle to fight the Coronavirus pandemic that has impacted the lives of billions across the world.
The International Monetary Fund said the cumulative output loss from the pandemic in 2020 and 2021 could reach $9 trillion. And for the first time since the Great Depression, the IMF said “both advanced economies, emerging markets and developing economies are in recession” with income per capita for more than 170 countries to dramatically shrink due to the “Great Lockdown” that put a stop to all activities, including global flights, for weeks and even months in some areas.
Experts warned it will be a slow and painful recovery for many countries that won’t be felt until 2021 or when the anti-Covid-19 vaccine has been developed.
The new normal, whereby people must practice social distancing in public places in addition to wearing masks, will prevail in the meantime. Governments are also likely to re-impose lockdowns if necessary to prevent the spread of the virus that has so far infected more than 4 million people worldwide and killed nearly 300,000 so far.
Stronger e-commerce
While many industries suffered unimaginable losses, aviation in particular, the pandemic also sustained some sectors like air cargo, logistics and growth for some such as e-commerce.
With people stuck at homes for weeks, the allure of buying online, especially essentials like food and medicines, surged within just a short period of time, inevitably making the e-commerce industry stronger.
The United States, Canada, and other developed economies in Asia and Europe, saw online buying activities and spending substantially increased, if not doubled, particularly on groceries. With malls, shops, restaurants and other retailers closed, consumers were pushed to buy their needs online.
The trend extends to affluent nations in the Middle East like the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia, where people, for safety and precautionary reasons, have turned to e-commerce platforms to keep a steady supply of their basic needs instead of going to supermarkets which remained open during the lockdown.
ITCAN, a leading e-commerce technology and digital marketing company focused on e-commerce performance marketing, said the changing dynamics in the way we live have turned most consumers to online shopping rather than doing bulk-buying in stores. For many, the practice is seen as more convenient with free deliveries offered by e-commerce platforms.
“The current global health situation is leading consumers worldwide to adapt to alternative ways of getting their goods, particularly through online shopping and they are likely to spike even more as cities raise the level of restrictions on people’s movement outside their homes. This shift in consumer behavior puts e-commerce platforms on the forefront to support people in the region who are still used to shopping their needs in malls and stores to move towards online marketplaces,” said Mansour Althani, CEO & Co-founder of ITCAN, adding, “online shopping will go beyond the current crisis and will serve as an impetus to further accelerating the growth of e-commerce in the region.
In a 2019 joint study by Dubai Economy and digital payment solutions leader, Visa, titled the “UAE eCommerce Landscape,” the UAE was identified a the most advanced e-commerce market in the Middle East and North Africa with transaction hitting $16 billion that year. It’s annual pro-Covid-19 pandemic growth was estimated at 23% annually through 2022.
The study underlines innovative initiatives, such as the Dubai Smart City, tech-eager consumers and a favorable ecosystem promoting start-up growth as the chief factors that have positioned Dubai and the UAE at the forefront of the e-commerce growth in the MENA region.
Saudi Arabia, which is already big on e-Commerce, also saw a sudden surge on online retail shopping following the Covid-19 lockdown and curfews.
Local online retailer BinDawood Holding disclosed its average sales on a 10-day basis jumped by 200% in March while its average order value rose by 50% and app installations by 400%. The company had since hired more packers and drivers to keep up with demand for online deliveries.
The company has two e-Commerce platforms – BinDawood and Danube – connected to their respective 72 supermarket and hypermarket chains, enabling customers to purchases groceries and other goods online.
Saudi grocery delivery app Nana has also benefitted from the recent turn towards online shopping, raising $18 million in a Series B funding round in late March to expand operations across the Middle East, with investors including venture capital funds Saudi Technology Ventures and Middle East Venture Partners. This follows a Series A funding round that raised $6 million last year.
The Saudi government hopes to increase the proportion of online payments to 70% by 2030, up from 2020 target of 28%. Last year, it enacted the E-commerce Law designed to regulate digital payments and improve transparency. On January 31, 2020, the Ministry of Commerce and Investment adopted the Implementing Regulations of the E-commerce Law, adding increased oversight to areas such as personal data protection, consumer rights and disclosure obligations.
Growing Market
The global logistics market was valued at $10.68 billion in 2018. By 2027, it’s projected to reach $15.88 billion, growing at a CAGR of 4.5%, and pushed by the rise in the use of multimodal transport and innovation in mobile technologies.
Retail and consumer goods companies are likely to benefit more prompting them to reshare their operating models with connected logistics, to keep pace with the ever-evolving industry and consumer demand, according to Agility, a leading global logistics company.
According to the Agility Emerging Markets Logistics 2020, the Middle East will see significant growth in domestic logistics largely fueled by e-Commerce market. Leading this is are the UAE and Saudi Arabia.
“UAE’s rise has been driven by a boost to its e-Commerce market, forecast to expand at a CAGR of 19.1% in the five years to 2023, while in Saudi Arabia, benefits of the Kingdom’s Vision 2030 strategy are improving prospects and performance. Growth in the construction and tourism sectors as a result of projects established by the Vision 2030 strategy increased demand for domestic logistics services,” Agility pointed out.
In its latest e-Commerce analysis, the Dubai Chamber of Commerce said the UAE has advanced its position globally in this industry thanks to its large storage capacity, extensive logistical networks and the government’s support.
“The country’s position further advanced after the outbreak of the epidemic, as unified exceptional measures taken by the government, logistical support companies and commercial companies helped to ensure the continuous flow of necessary materials during the emerging pandemic…The benefits of the UAE’s strong logistics and warehousing sector extend beyond the domestic market to neighboring markets, for example, Saudi Arabia,” the Chamber said.
Challenging zones
Logistics growth is projected even in some of the most challenging zones like Afghanistan and Iraq to sustain communities and businesses.
Airglow Aviation, which established its operations in Afghanistan eight years ago, relies on highly qualified staff to accomplish its mission.
“Providing services in conflict zones can always be challenging due to the unpredictable security situation in the country. We need to ensure that our personnel, the cargo we handle and our facilities are secure, with multiple layers of security in order to run a successful and incident free operations,” shared Rohit Thakwani, Managing Partner at
Airglow Aviation Services FZC, which represents airlines as Cargo GSSA.
“Our main focus has been safety and security, and we rely on our highly qualified staff to ensure that our standards are maintained. In order to mitigate risk in Afghanistan, we have a due diligence checklist in place that helps us know our clients better. In addition, we also carry out cargo supervision throughout the logistics supply chain. These are just the first few steps put in place that helps us ensure the cargo is safe for transport,” he added.
Liana Coyne, Chief Operating Officer of the family-owned Coyne Airways which pioneered in delivering cargo to conflict zones, said the company relies on their wealth of experience, highly-trained staff and reliable network to mitigate and recover from surprises in conducting their operations.
“It can be very challenging to deliver air cargo services to conflict zones, particularly when there are broader geopolitical issues at play. For better or worse, it has become routine for us and we strive to provide the same level of service to our customers that they would expect on less eventful routes. However, sometimes there are forces simply beyond our control,” said Coyne.
She cited an incident a few years ago when their slots will be cancelled at the last minute changing their entire plans for deliveries.
“For example, a few years ago, Kandahar was the busiest single runway airport in the world and because of that, they were understandably very unforgiving if you missed your slot, regardless of why. And if you missed your slot, you would go to the bottom of the queue and it could take days to get another one. I remember always holding my breath a little for our Kandahar flights, hoping that nothing would go wrong. I also remember feeling somehow cheated on the occasions when we had everything ready to go, but our slots were cancelled at the last minute because of an unannounced visit by a foreign dignitary,” she recalled.
“Unfortunately, there are some things that you cannot plan for; fortunately, we have a wealth of experience and a network of reliable and trustworthy partners to help us anticipate, mitigate and recover from any surprises.”
Future of logistics industry
The Covid-19 pandemic has created so many challenges but also highlighted the importance of the air cargo industry’s ability to deliver fast and efficiently medical and other vital supplies across continents. Equally important is the role that logistics played out during this time of crisis.
Coyne who is in-charge of Coyne Airways’ five new market-focused divisions including Iraq, the Caspian and Central Asia, Afghanistan, Africa, and Contract Logistics, said the pandemic crisis highlighted the importance of the logistics industry in keeping the world moving.
“It is clear that the coronavirus crisis will have a lasting impact on the world economy for the foreseeable future; that will necessarily affect the logistics industry in a variety of ways,” said Coyne, an Oxford graduate lawyer. “Coronavirus has really exposed how reliant supply chains are on flows from East to West.”
“On the airline side, we have seen a huge reduction in capacity in frequencies to and from mainland China on both the cargo and passenger side. For the freighters that are still flying, some are trying to honor their commitments while making the trade imbalances work, while others are charging premiums for capacity. Overall, however, I think that there will be few long-term winners: in February, IATA estimated that coronavirus would cost airlines $30bn in revenue,” she pointed out.
In a globalized world, connectivity is very important and logistics make it happen seamlessly and so are the people behind it.
“If there is any silver lining from this misery, I think that the crisis has highlighted the importance of logistics and more attention may be focused on the industry in the future. I would mention two things in particular: First, we live in a connected world, but contingency planning is key, particularly for pharmaceutical goods. I hope that the response will to diversify and spread the risk rather than to isolate and on-shore. Secondly, I think there has been a renewed appreciation for those people who make the final mile happen: the delivery drivers who provide food and medicine to people under quarantine. I very much hope that the rise in respect and courtesy that ‘hero’ drivers have reported in Wuhan will be replicated around the world,” said Coyne.
Stuart Milligan, Course Leader, MSc International Logistics and Supply Chain Management at the University of South Wales Dubai, said supply chains may become more resilient as a result of the COVID-19 disruptions.
“The reason why the Lean approach is so successful is that it forces organizations to face aspects of their operation that aren’t efficient. COVID-19 has really pushed supply chains to the limit, exposing areas of weakness that day-to-day operations don’t highlight. Smart organizations will reflect on these issues and address them, making them more efficient and resilient in the future,” he explained.
Describing the supply chain as a “people’s job” Milligan noted while some technologies may be integrated in the sector that will shape its future, people will always be behind its success.
“I always maintain that supply chain is a people job. Now, more than ever, the power of people is vital to success. This is a key opportunity to exploit value beyond the transactional. The prize now isn’t price, it is about real social value—health, well-being and care for the most vulnerable. I am engaged in social media feeds of supply chain professionals in the UAE, and the care and compassion that is evident in the profession is humbling,” he said.
Thakwani, Managing Partner at Airglow Aviation Services FZC, said with new technology combined with increasing demand for movement of goods, the region’s logistics industry is up for more growth.
“With the advancement of technology which enables aircraft to fly further whilst being more fuel-efficient, we are going to see more cargo move across the globe, from point to point, as opposed to transiting in hubs such as the UAE,” said Thakwani.
“Moreover, with the growth of the aviation sector in the world and especially in the region, we will continue to witness supply outpacing demand, and overall industry wide load-factor continuing to decline. On the other hand, we are getting access to new markets, and with the rapid growth of e-commerce sales in the region, we expect the year-on-year revenue and over all yields would continue to grow,” he added.
6 trends that will impact the Transportation & Logistics industry over the next decade
1. Global uncertainty: Disruption in the global supply chain cost US$56 billion in 2015 in Europe alone. Economic turbulence, protectionism, and geopolitical instability are forcing transportation and logistics providers to adopt new business models and new alliances.
2. Urbanization: With the rise of megacities, T&L providers need to cope with the challenges of urban logistics, including congestion, difficulties in loading and unloading, and last-mile delivery.
3. Digitalization: Digital technologies will transform the industry, with new efficiencies and new visibility. However, technology is a double-edged sword that also creates rising customer expectations and security challenges.
4. Technology innovation: Business model disruption is coming from established companies and a host of new entrants who are harnessing the latest technology innovations. This will lead to horizontal and vertical integration across the value chain, and networks that are real-time optimized.
5. Need for new talent: New technologies require new skill sets — including design thinking, data sciences and robotics. Hiring costs will rise, and innovation will be a key competitive factor.
6. Sustainability and transparency: Stakeholders, government agencies, and consumers are keenly interested in the practices that guide T&L companies, including sustainability, labor conditions, and environmental compliance.
Source: www.ey.com
As the world continues to grapple against an invisible enemy, the novel Coronavirus (COVID-19), which has infected more than 1.7 million and killed over 100,000 as of early April, countless frontline health workers, along with those in certain industries like air cargo, take mounting risks to deliver vital health, food and other supplies for billions of people locked in this pandemic crisis.
The World Health Organization (WHO) said new cases are still emerging in every country and territory across the world since the virus was first discovered in Wuhan, China more than three months ago, despite preventive measures that include locking down cities and even whole countries. This meant the supply-chains must keep going to sustain the needs of the world at this difficult time.
The International Air Transport Authority (IATA) said since the COVID-19 crisis began, air cargo has been a vital global partner in delivering much-needed medicines, vaccines, pharmaceuticals, medical supplies like ventilators, masks & PPE (personal protective equipment), mortuary body bags, medical equipment, including spare parts/repair components, medical oxygen, among others, to hospitals and clinics across the world to treat victims infected with the virus.
“We call on countries to work with companies to increase production; to ensure the free movement of essential health products; and to ensure equitable distribution of those products, based on need,” said WHO Director-General Tedros Adhanom Ghebreyesus at a media briefing after the G-20, which Saudi Arabia currently chairs, convened a teleconference recently.
Moving medical cargo is particularly crucial in Italy, Spain, France and the UK, which were all hit hard by the virus, straining their healthcare facilities and medical supplies to the maximum.
Italy suffered the worst worldwide with more than 17,669 deaths and over 139,422 COVID-19 cases as of early April. Its health services are on the brink of collapse, overwhelmed with patients. It recently received desperately needed doctors, supplies and equipment from China, Moscow and Cuba, which wouldn’t have been possible if air cargo flights were not allowed.
The United States, now the epicenter of the pandemic with more than 368,000 cases recorded as of the first week of April, is also struggling to cope with the pandemic that has caused food shortage, medical supplies and job losses for more than 10 million Americans.
An indispensable global partner
The air transport industry accounts for more than 52 metric tons of goods transported across the world in a given year. That’s about more than 35% of global trade by value but less than 1% of world trade by volume, which translates to some $6.8 trillion worth of goods annually.
These statistics dramatically fell this quarter with airline flights suspended across the world to prevent the spread of COVID-19. The pandemic’s disruption on the global supply chain also led to a fall in demand with deeper cuts on cargo capacity for freighter planes and lost belly-hold capacities for passenger flights.
“The situation of the airline industry remains grave. As you know, we have been working from a scenario of severe travel restrictions lasting for three months. That will cut industry revenues by $252 billion in 2020 compared to 2019,” said Alexandre de Juniac, IATA’s Director General and CEO, noting that the dimension of the crisis is beyond what the industry has experienced in the past.
While the cargo sector remains in operation, it’s struggling to meet demand due to restrictions on aviation rules that varies in different countries.
“The one part of the industry that continues to operate is the cargo sector. And it is struggling to meet demand. Passenger operations have been reduced so drastically that there is just not the capacity in the system to meet even the reduced levels of air cargo. And, as I have said before, this includes vital medical shipments on which people’s lives depend,” said De Juniac.
“Airlines are being creative in mounting cargo operations as charters and even using passenger aircraft. As we all know, aviation is a highly regulated industry. And on top of the “normal” process of obtaining traffic rights and landing permissions, in the current situation we were also seeing cargo crew being delayed by quarantine restrictions designed for commercial passengers,” he added.
Among the many issues that air cargo carriers face includes the ever-changing environment of travel restrictions and government orders that significantly challenge the movement of crew and the operation of freight flights itself.
EU clears roadblocks in Europe
Recognizing the importance of keeping the movement of goods despite the pandemic, the European Union had cleared “roadblocks” for air, land and sea cargoes.
EU President Ursula von der Leyen said the unobstructed transportation of goods is crucial to Europe, especially in this time of crisis, so the EU has issued practical advice to member states on the border crossing regulations involving freight carrying goods.
Emirates SkyCargo also had temporarily shifted all its cargo handling operations at Emirates SkyCentral DWC to Dubai International Airport (DXB) to streamline costs and operations effective 1 April.
“Additionally, in order to consolidate operations and reduce costs in this new scenario, we have also temporarily shifted all our cargo handling operations to Dubai International Airport (DXB). Taken together, we are making sure that we react more quickly to requests coming in from every part of the globe from our customers,” said Sultan.
Turkey & Turkish Cargo
Turkey is among countries reaching out to those deeply affected by the virus. It recently has health supplies to Italy and Spain, two of the worst hit nations in Europe, using a Turkish Military A-400M cargo plane.
Bosnia and Herzegovina were also assured by Turkey to receive medical and professional assistance, including support in the procurement of essential goods, as they fight the spread of Coronavirus.
Turkish Cargo, the country’s national air freight carrier, is also busy transporting essential goods and medical supplies across the country and elsewhere. It says it will deploy 155 flights per week for cargo freighters out of Istanbul in addition to 60 flights per week for passenger aircraft used for cargo operations.
Turkish Cargo says it intends to bridge the gap in the air transport industry amid the continued global travel ban to meet the world’s crucial demands for essential medical supplies and basic needs. The company is internationally certified to handle pharmaceuticals and life sciences and is known for its modern facilities and highly-trained personnel.
Several strong new measures were implemented in Turkey recently to curb the spread of the virus. Recep Tayyip Erdogan, the nation’s president, ordered a curfew restricting members of the public under age 20 (born after Jan. 1, 2000) from leaving their homes unless absolutely necessary.
He also announced a 15-day ban on vehicles leaving or entering 31 provinces, including Istanbul – home to nearly one-fifth of Turkey’s population – as well as the urban centers of the capital Ankara, Izmir, Bursa, and Adana while the wearing of face masks in crowded areas, including stores, is now mandatory, reported the state news media Anadulo Agency.
Erdogan announced over a billion Turkish liras (nearly $149 million) had been donated by over 300,000 people and institutions to Turkey’s national solidarity campaign within just three days to help those who need assistance. The president himself donated seven months of his salary to the fund.
Saudi Arabia vows to bounce back
With its economy hit by the double blow of the coronavirus pandemic and dramatically lower oil prices, the Saudi government unveiled in late March a stimulus package of 120 billion riyals ($32 billion) to keep businesses afloat amid the crisis.
The country, which has nearly 3,000 COVID cases as of April 7, says the measures are designed to ensure the safety of its citizens and residents and to address the adverse financial and economic impact of both the virus and oil-price decline.
Saudia Cargo, the country’s national freight carrier, had since taken proactive steps to ensure the continuity of all cargo and supply operations, particularly in hauling much needed medical supplies.
UPS & other major US airlines
In the United States, President Trump’s Coronavirus task force has tapped UPS to work with the US Federal Emergency Management Agency (FEMA) and State health agencies as well as companies across the public and private sectors to deliver vital health supplies.
UPS Chairman and CEO David Abney said UPS Healthcare’s dedicated team with the company’s global network of public-private partnerships “are creating a powerful combination for rapid deployment of protective equipment and test kits throughout the U.S., and around the world.”
“UPS Healthcare has the expertise and experience to move vital, life-saving medicines, medical devices, diagnostic specimens and supplies everywhere they are needed,” said Abney as he announced the stepped up collaboration with FEMA to provide supply chain services for the agency’s distribution of PPE and necessary materials throughout the U.S., including respirators, N95 masks, and gloves for use by healthcare workers across America.
Apart from UPS, four other major passenger airlines – American, Delta, Southwest and United – have offered their services to bridge the gap in transporting medical supplies to the country as it grapples to fight the pandemic.
More than 432,000 Americans were already infected with COVID-19 as of early April with deaths totaling over 14,000. Health experts believe the pandemic could lead to more deaths and cases as it reaches its peak.
Airbus, Lufthansa Cargo & Europe
Airbus is also on a race to help in the fight against the COVID-19 pandemic. On April 3, an A350-1000 left Toulouse, France for Tianjin, China and returned to Hamburg the next day to deliver vital medical supplies.
The aerospace giant said it’s been conducting special missions related to the pandemic since mid-March, including deploying an A400M and its Beluga fleet to transport shipments of masks between its European sites in France, Germany, the UK and Spain.
“I would like to pay tribute to all the Airbus teams, globally, supporting the fight against COVID-19. They’re living our values in assisting those who are saving lives every day,” said Guillaume Faury, Airbus CEO, and vowed that Airbus will continue to support the fight against the Coronavirus pandemic wherever possible.
Apart from deploying its employees, their expertise and know-how and leveraging technology in the fight against the COVID-19 pandemic, Airbus has also started engaging in designing and manufacturing ventilators and 3D printed visors which are critical resources for hospitals.
France, one of the hardest hit countries in Europe, has ordered a billion face masks from China. The first batch landed in Paris on March 30 aboard the Russian flight carrier Volga Dnepr. Air France was also tapped to fly a portion of the shipment and so are other carriers.
French Health Minister Olivier Véran said France needs about 40 million face masks per week but it can only produce eight million on its own.
ECS Group, the global leader in the GSSA industry, meanwhile, paid tribute to the remarkable work of the teams at Global Services Handling (GSH), a French air cargo handling company based at Roissy Charles de Gaulle (CDG) airport in France.
“As in all sectors, we need to reorganize the way we work because of the crisis, with one further difficulty: remote working isn’t possible with goods handling. Our staff levels are down by around 25% but we are continuing to operate 24 hours a day, 7 days a week. We are 100% operational thanks to our extremely hard-working employees. Our priority is still to make sure that cargo leaves and arrives in total safety,” said Pierre Perez, GSH’s Managing Director.
Airlines are doing everything they can to offer more capacity: increasing the number of all-cargo flights, converting passenger flights into freighters, demonstrating greater flexibility, and more – which makes handling agents’ vital players in ensuring the continuity of the supply chain. Without them, it would be impossible to receive and load cargo, which in turn would also make air freight forwarding impossible, Perez noted.
In Germany, Lufthansa Group utilized a passenger aircraft between China and Frankfurt to carry highly urgent goods, mainly medical supplies in an effort to stave off medical supply shortage due to the pandemic.
Lufthansa Cargo said the required permits for the flight were issued in excellent cooperation with the foreign ministries and embassies of the People’s Republic of China and the Federal Republic of Germany.
“Lufthansa Cargo is making every effort to strengthen security of supply by air. About half of the goods are normally transported in freighters, the other half in the bellies of passenger aircraft. Due to the far-reaching cancellations of passenger connections, valuable airfreight capacity is lacking. The Lufthansa Group and Lufthansa Cargo are therefore looking into the possibility of operating further flights exclusively for cargo transport on passenger aircraft,” Lufthansa Cargo said.
Middle East & Africa
Revenue losses are mounting in the Middle East & Africa with the continued travel ban amid the pandemic crisis.
Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East, called on the governments across the region to step up efforts to help the aviation industry.
The United Arab Emirates, along with other countries in the region like Saudi Arabia, Rwanda, Morocco and Angola, have already offered stimulus packages and relief but Al Bakri said more is needed which include: direct financial support; loans; loan guarantees and support for the corporate bond market, and; tax relief.
“The air transport industry is an economic engine, supporting up to 8.6 million jobs across Africa and the Middle East and $186 billion in GDP. Every job created in the aviation industry supports another 24 jobs in the wider economy. Governments must recognize the vital importance of the air transport industry, and that support is urgently needed. Airlines are fighting for survival in every corner of the world,” said Al Bakri.
The IATA official said failure by governments to act now “will make this crisis longer and more painful.
“Airlines have demonstrated their value in economic and social development in Africa and the Middle East and governments need to prioritize them in rescue packages. Healthy airlines will be essential to jump-start the Middle East and global economies post-crisis,” he said.
“Some regulators are taking positive action. We are grateful to the Ghana, Morocco, the UAE, Saudi Arabic and South Africa for agreeing a full-season waiver to the slot use rule. This will enable airlines and airports greater flexibility for this season and greater certainty for summer. But there is more to do on the regulatory front. Governments need to recognize that we are in a crisis,” he added.
IATA is specifically asking governments to provide a package of measures to ensure air cargo operations, including fast track procedures to obtain overflight and landing permits, exempting flight crew members from 14-day quarantine, and removing economic impediments (overflight charges, parking fees, and slot restrictions).
The International Monetary Fund (IMF) said the world is heading to a deep recession this year and that countries must unite and help each other in this difficult times.
“First, the outlook for global growth: for 2020 it is negative—a recession at least as bad as during the global financial crisis or worse. But we expect recovery in 2021. To get there, it is paramount to prioritize containment and strengthen health systems—everywhere. The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be,” said IMF Managing Director Kristalina Georgieva following a conference call of G20 Finance Ministers and Central Bank Governors in late March.
“The human costs of the Coronavirus pandemic are already immeasurable and all countries need to work together to protect people and limit the economic damage. This is a moment for solidarity…,” she noted.
COVID-19 Pandemic Impact in the Middle East and Africa
o Saudi Arabia: 26.7 million fewer passengers resulting in a US$5.61billion revenue loss, risking 217,570 jobs and US$13.6 billion in contribution to Saudi Arabia’s economy.
o UAE: 23.8 million fewer passengers resulting in a US$5.36 billion revenue loss, risking 287,863 jobs and US$17.7 billion in contribution to the UAE’s economy.
o Egypt: 9.5 million fewer passengers resulting in a US$1.6 billion revenue loss, risking almost 205,560 jobs and around US$2.4 billion in contribution to the Egyptian economy.
o Qatar: 3.6 million fewer passengers resulting in a US$1.32 billion revenue loss, risking 53,640 jobs and US$2.1billion in contribution to Qatar’s economy.
o Jordan: 2.8 million fewer passengers resulting in a US$0.5 billion revenue loss, risking 26,400 jobs and US$0.8 billion in contribution to Jordan’s economy.
o South Africa: 10.7 million fewer passengers resulting in a US$2.29 billion revenue loss, risking 186,850 jobs and US$3.8 billion in contribution to South Africa’s economy.
o Nigeria: 3.5 million fewer passengers resulting in a US$ 0.76 billion revenue loss, risking 91,380 jobs and US$0.65 billion in contribution to Nigeria’s economy.
o Ethiopia: 1.6 million fewer passengers resulting in a US$0.3billion revenue loss, risking 327,062 jobs and US$1.2 billion in contribution to Ethiopia’s economy.
o Kenya: 2.5 million fewer passengers resulting in a US$ 0.54 billion revenue loss, risking 137,965 jobs and US$1.1 billion in contribution to Kenya’s economy. Source: IATA
Women remain treated as a minority in many countries, especially in Africa, where the belief that they are less deserving of power as men, still holds. Change is slow in coming in the continent with many societies still locked up in traditional concept of gender roles even in the 21st century.
In South Africa, one of the most progressive democracies since coming out of the Apartheid in 1994, issues on women remain a concern, but it’s less pervasive compared to other parts of the continent where women are given the chance to actively participate in both private and public sectors.
Fundi Sithebe, acting Chief Executive Officer of Airports Company South Africa (ACSA), which operates nine airports across the country, including one each in Brazil and India, is among South African women breaking the glass ceiling in the continent’s male-dominated business scene. She was the company’s COO, directing, planning and leading its overall business operations, prior to being named as ACSA’s Acting CEO on November 1, 2019.
Managing a busy airport is a daunting task. It takes a lot of responsibilities, prudent decisions, hard work, dedication and a team capable of handling the safety and security of millions of passengers from different countries. In Sithebe’s case, it’s twice the pressure as she’s not only responsible for a single airport but rather integrating the operations of nine, in addition to generating non-aviation revenues for all those facilities.
Her career path has inevitably become a source of inspiration for many African women and elsewhere who are struggling to break barriers and make a difference in their lives.
Apart from keeping up with her duties at one of the world’s major airport operators, Sithebe, a licensed pilot, also actively participates in cause-oriented activities that promote women empowerment. She is a member of the Southern African Women in Aviation and Aerospace (SAWIA), Women in Aviation (W&A) and is the current Chair of Akani Aviation Leadership Initiative South Africa, a non-profit initiative that aims to ensure a larger and a sustainable base of females in the aviation industry.
$5 billion investment
In an interview in Dubai on the sidelines of the three-day Global Investment in Aviation Summit (27-29 January 2020), Sithebe says she’s honoured with the trust given to her to manage one of the country’s most profitable entities independently run like a private company.
Sithebe takes her role very seriously and collaborates with a strong team with the collective goal of pushing for ACSA’s growth in the foreseeable future.
Founded in 1993 with the South African government as majority shareholder, ACSA operates nine international airports—O.R. Tambo International Airport; Cape Town International Airport; King Shaka International Airport; Bram Fischer International Airport; Upington Airport; Port Elizabeth Airport; São Paulo Guarulhos International Airport (Brazil); Chhatrapati Shivaji Maharaj International Airport, Mumbai, India (consortium with Bidvest and Airports Authority of India)—which last year collectively handled more than 48 million passengers.
ACSA also operates domestic airports—East London Airport; George Airport; Kimberley Airport; Pietermaritzburg Airport, and; Mthatha Airport.
Over the next 10 years, ACSA is planning to spruce up the facilities and infrastructure of airports it operates, with focus on three which handle the greatest number of passengers— Johannesburg’s O.R. Tambo International Airport, Cape Town International Airport and the King Shaka International Airport.
“Right now, the next phase of our growth strategy is to build new infrastructure and facilities. All in all, our capital expenditure program would cost us $5 billion over the next 10 years. That cannot be funded from our own balance sheets, unfortunately, so we’re going to market these projects in the private sector,” said Sithebe.
“The reality is much of the funding would come from the private sector and PPP is always one of our options,” added Sithebe who is recognized for her extensive skills in strategy formulation, research and analysis as well as project management having played a significant role as the protocol lead during the 2010 FIFA Soccer World Cup in South Africa.
A pre-feasibility study to create a midfield carbon airport at O.R. Tambo International Airport is now being undertaken. At Cape Town, a new runway is being mulled while remote apron stands are envisioned to be introduced at the King Shaka International Airport.
Digitalization is also a major part of ACSA’s future growth plans with passenger experience now a priority in today’s digital world.
“Digitalization—that’s part of a valuable positive passenger experience. And we are funding this project ourselves,” said Sithebe noting that the master plan for all of the airports that ACSA operates considers the projected passenger, cargo, and aircraft movement statictics.
Renewed cargo strategy
ACSA has also new plans to achieve growth in South Africa’s cargo sector. Johannesburg, the only airport in Africa with nonstop flights to six continents, is at the center of this reform.
Sithebe explained new facilities may be introduced at Johannesburg’s O.R. Tambo International Airport that can be used by air freight operators and forwarders to enhance shipment of different types of goods carried through the belly of commercial passengers serving the route.
“We’re starting to rethink our cargo strategy. What we have before is just provide the land but the two are interlink (cargo and passenger airlines). Any aircraft that comes in can bring in cargo. We need to make sure that there is a cohesive strategy between them,” she said.
In 2017, Johannesburg handled close to 415,000 tons of cargo with the 14 international and local carriers either maintaining or increasing their frequencies. Belly-cargo accounted for a significant percentage of this growth. South Africa’s top export markets in terms of value are China, Germany, the United States, Japan and India as well as Botswana and Namibia.
COVID-19 and other diseases
Just like other countries, South Africa is suffering the lingering brunt of the coronavirus (COVID-19) outbreak which has so far killed more than 4,089 people as of mid-March. Tourist arrivals rates are at an all time low with domestic and international travel strongly discouraged to prevent the spread of the virus.
More than 120,000 people, mostly in China, were already infected with the virus which has spread to more than 100 countries worldwide and their number are likely to increase with COVID-19 vaccine still yet to be formulated.
The virus has a huge impact on revenues of South Africa’s travel industry with about 20 percent of its tourists coming from China followed by the UK and Germany.
Sithebe said airports handled by ACSA are prepared to handle medical emergencies like COVID-19 gaining their experience from previous outbreaks in the continent like the Ebola virus.
“We have automatic screening put in place. We’ve done this over the past four or five years since the Ebola outbreak,” said Sithebe. “Every single passenger coming internationally to South Africa is screened. We have the necessary medical protocols in place in case someone is found to have the virus. That person will be immediately quarantined.”
The world remains on a standstill with an invisible enemy that is slowly crippling all activities but Sithebe remains hopeful everything will come into place soon.
Fundi Sithebe: Airports Company South Africa’s COO
Fundi Sithebe is the Acting Chief Executive Officer of Airports Company South Africa as of 1 November 2019. Prior, she was the Chief Operating officer appointed in December 2017.
As the COO, her role is to direct, plan and lead the overall business operations (namely overall airports management, infrastructure asset management, technical services and solutions, enterprise security and information technology), ensuring that the business operations are set to achieve the company’s set performance commitments.
She is responsible for the integration and seamless operations across the network of 9 airports. In addition, she is responsible for the Commercial Division – which is mainly responsible to non-aeronautical revenue, a large component of the business revenues.
She started her career as a management consultant, focussing in the areas of strategy and operations in several organisational strategic projects. She was part of the expansion team for a financial services organisation that crafted a strategy and was responsible for the successful establishment of operations in Africa – both greenfield and acquisition.
She holds a Bachelor of Business Administration from Midrand University, and a Post Graduate Diploma in Management (Business Administration) from Wits Business School. Her passion in the aviation industry was sparked in 2003, when she obtained her Private Pilot’s License (PPL).
She is a member of the Southern African Women in Aviation and Aerospace (SAWIA), Women in Aviation (W&A) as well as the current chair of Akani Aviation Leadership Initiative South Africa, a non-profit initiative that aims to ensure a larger and a sustainable base of females in the aviation industry.
Airports Company South Africa (ACSA) runs various Socio-Economic Development (SED) initiatives focusing on Education, Youth and Women Development, Persons with Disabilities, Environmental Sustainability, Employee Volunteerism and Philanthropic Donations, all aimed at seeking to improve the quality of life for people.
ACSA says it has spent over R41 million on various projects that are aligned to the country’s National Development Plan, the King III report, Broad Based Black Economic Empowerment and the Skills Development Act.
It mainly focuses on communities in and around the nine airports, that it operates. The company also contributes to other community development projects around South Africa that meet its SED criteria. Most of the company’s airports fall within poverty nodes, that the government has specifically identified as needing focused intervention.
Its major projects include the following:
Komazi high school: Maths & science initiative-Mpumalanga
Tucked away in a rural area between the borders of Swaziland and Mozambique is Inkomazi High School. Like many schools in South Africa, Inkomazi struggled to keep up with the modern way of learning. Being a poor area, IT and internet facilities were out of reach for most learners.
With instant internet access being provided throughout the year, the new facilities have opened many opportunities, for the learners, which they could never dream of before.
Besides the learning issues, sanitation was also a big concern for the school. Due to lack of toilets learners would stand in queues until they ran out of break time. Airports Company South Africa intervened by providing the school with 20 modern ablution facilities.
Mgezeni high school computer donation
Mgezeni High School in the village of Ntambanani outside Empangeni in KwaZulu Natal, is a newly upgraded technical school. The school however needed the supply, installation and maintenance of ICT equipment for their two ICT centres to enhance their Mechanical, Electrical and Civil Technology curriculum.
ACSA’s Socio-Economic Development initiatives
Airports Company South Africa in partnership with the Air Traffic Navigation Services, known as ATNS, and the Department of Transport as a shareholder made a combined donation. In addition, the Department of Transport made a donation of Shova Kalula bicycles as an intervention to improve the learners’ mobility and access to the school.
More than 1400 learners currently benefit from the project. Computer classes at the school are now run with two teachers handling each lesson. The first teacher conducts the lesson, while the other teacher follows up to ensure that the learners understand what is being taught.
Teacher and learner development program
Eastern Cape has been identified as one of the worst performing provinces by the Department of Education. Airports Company South Africa took a decision to improve education in the province by introducing a Learner/Teacher Development Programme in East London and Port Elizabeth.
Two schools were identified namely Walmer High School in Port Elizabeth and Umtiza High School in East London. Both schools are within a 5km distance from East London Airport and Port Elizabeth International Airport respectively. The programme, which commenced in April 2017 focuses on Mathematics, Physical Science and Accounting for learners in Grades 10 to 12. Learners continue to attend Saturday and Holiday classes and the teachers also receive capacity and development training.
The landlocked country pins hope on aviation and air cargo to fire-up elusive economic development
Battered by years of violent insurgency problems and armed conflict between the Taliban, the local government and American forces, Afghanistan had long suffered economically and politically though it is richly endowed with natural resources.
The war-torn Afghanistan has verified rich deposits of natural gas and petroleum—about 2.9 billion barrels of crude oil, 15.7 trillion cubic feet of natural gas and 67 billion liters of natural gas liquids, according to the US Geological Survey. It also has gold, copper, marble iron ore and other minerals, precious and semi-precious stones yet poverty remains rampant due to insurgency and the lingering war with the terror group Taliban, the longest war the US has waged in its history.
Located between South Asia and Central Asia, Afghanistan is a landlocked mountainous country bordered by Turkmenistan, Uzbekistan, Tajikistan, Pakistan, Iran and China.
With no access to waterways to transport goods, the country relies heavily on air transport to connect to the global market and its future hinges on aviation and air cargo industries to bring about the elusive peace and stability that the more than 32 million Afghans have long been waiting for.
Dr. Mohammad Qasim Wafayezada, Director General of the Afghanistan Civil Aviation Authority (ACAA), said aviation is a vital lifeline to the country’s quest for peace and stability because it will bring employment, new opportunities and hope for the Afghans.
“Civil aviation is important for Afghanistan more than any other countries in the world because we are landlocked. We strongly rely on the aviation industry to support our economy,” Dr. Wafayezada told Air Cargo Update on the sidelines of the recently held Global Investment in Aviation Summit 2020 that the UAE government hosted in Dubai.
Dr. Wafayezada, a Monbukagakusho scholar who studied in Japan for more than five years for his Master’s Degree and Ph.D. focusing his research on ethnic politics, democratization and peacebuilding in post-conflict multi-ethnic societies, said aviation development in Afghanistan was setback by years of destructive war and political instability.
But he said the Afghan government had since initiated efforts to reform political and economic priorities which involve investing in the country’s aviation infrastructure and programs to help transport Afghan products to the world.
“No matter how small, aviation provides support to the country’s economy. About 70 percent of Afghanistan’s economy relies on agriculture so it would really help the farmers if their produce could be given the chance to be transported to the global market,” he said, noting that Afghanistan is known for producing high-quality agricultural products, especially fruits and nuts.
Afghanistan’s air space is equally valuable to others in the region. Geographically, it is the most efficient way between Europe and Asia, saving time, jet fuel and other resources.
Afghanistan’s gateway to the worldAbout half of Afghanistan’s exports by value are moved through the Hamid Karzai International Airport or HKIA (formerly Kabul International Airport renamed in 2014 after the country’s first democratically elected President Hamid Karzai).
Situated about 16 kilometers of the capital Kabul, HKIA is used both for military and civil aviation. It is capable of housing more than a 100 aircraft. It has been expanded and modernized in recent years.
A new international terminal has been added with free Wi-Fi while the old passenger terminal had since been dedicated for domestic flights. The Afghanistan Civil Aviation Director General said Japan International Cooperation Agency (JICA) funded the airport’s new terminal allowing it to now handle as much as 400,000 passengers.
HKIA is the hub for Afghanistan’s national carrier, Ariana Afghan Airlines, and supports a number of military bases used by the United States, NATO, and the Afghan Air Force with security provided by the Afghan National Police.
Dubai-based carriers like Emirates regularly serve the Kabul route supporting businesses and communities that need passenger and cargo capacities.
Increasing cargo & passenger volumes
Cargo and passenger volumes in Afghanistan continue to grow despite the limited number of passenger and cargo flights around the country amid security concerns.
Overall passenger traffic in the country’s major airports—Kabul, Kandahar, Herat, and Mazar-i-Sharif –jumped to 2.6 million in 2017 from only 1.9 million in 2016.
In 2016, 1,971 tons of cargo were handled at major airports compared to only 1,751 tons in 2015. It jumped to 4,199 tons in 2017, an encouraging figure given the country’s scarce aviation and logistical resources.
In 2019, cargo volumes exported from Afghanistan rose to about 7,000 tons, mostly involving dried fruits and nuts, according to Dr. Wafayezada.
“We have exported around 7,000 tons of national products last year which has contributed significantly to the economic growth of the country,” he shared. “A similar figure has been transported through normal flights. It has a positive impact on the development of the country, especially in rural communities as Afghanistan’s economy is 70 percent agricultural.”
“We produce some of the best fruits in the region – pine nuts, apples, pomegranate, and many other varieties of fruits. We export them to China, Turkey, Saudi Arabia, the UAE as well as some countries in Europe,” he added.
Apart from agricultural products, Afghanistan is also poised to export gemstones with the government agreeing to open up its mining to private investors.
USAID (US Agency for International Development) Invest announced last year that Afghanistan is ready to accept 43 new large and small-scale mining projects in 16 of the country’s 34 provinces. Afghanistan Minister of Mines and Petroleum Nargis Nehan said tenders will cover a wide range of commodities including oil and gas, gemstones, copper, gold, marble, and talc.
The PPP Hope
Faced with shrinking foreign aid, Afghanistan had begun steps to revive its war-torn economy. Among its options is strengthening the aviation industry which requires massive resources.
The US had since drawn up a Public-Private Partnership scheme whereby the private sector will help Afghanistan finance its aviation projects which involve building a five-star hotel (Airport Hotel), New International Passenger Terminal at HKIA, Cargo Terminal, Fuel Farms, Maintenance Repair Organization (MRO) for aircraft, and an Airport Export Processing Zone.
Documents submitted to the US Congress showed the US had initially planned to transition airspace management back to the Afghans by end 2014 but this did not materialize as scheduled. It was further recommended that Afghanistan develop an air cargo terminal at HKIA with “One-Stop-Shop” facility to streamline customs clearance procedures and expedite exports by air.
It was also recommended to create an “Export Processing Zone” to streamline the air cargo export bureaucratic and logistical process, reducing risk and transaction cost to exporters.
Anchal Chandra, PPP Expert/Financial Modeler of the Dubai- based consultancy firm Aero Asia, said all the preliminary work needed for HKIA development have been done and that Afghanistan is ready to take on investors for its PPP aviation projects.
“We will be bidding all these projects. We will start the transaction advisory of these projects in the coming months,” she added noting that the Afghanistan aviation projects are supported by USAID and will get help from multilateral agencies offering low interest rates with the winning bidder/s left to be responsible for operation and maintenance during the concession period.
Dr. Wafayezada said aviation is a fundamental pillar of any economy with one aviation job supporting three non-sector jobs, according to studies.
He’s hoping the reforms they are making at ACAA, one of the most transparent agencies in the Afghan government, will make a difference in the lives of many Afghans who are seeking employment and opportunities in a land tormented by violence for many years.
“Poverty breeds violence. In a country like Afghanistan, which is facing multidimensional challenges, it is difficult to lead the civil aviation sector but we’re hoping to overcome those challenges and pave the way for positive change to take place. We are doing our best to be successful,” Dr. Wafayezada said.
“I hope that with these projects, we can facilitate the safe and secure air transport of passengers and cargo to bring more connectivity to Afghanistan to the region and beyond to lead the way for economic development,” he added. “We need to explore ways that could contribute to the country’s infrastructure development, poverty reduction, capacity building, improving education and medical services to the people.”
Dr. Mohammad Qasim Wafayezada began his aviation career in 2013 when he was appointed Deputy of Policy and Planning at Afghanistan Civil Aviation Authority (ACAA).
He was instrumental in enhancing the development of new policies, laws and regulations of the country’s civil aviation industry in collaboration with various ministries.
As Director General of ACAA, Dr. Wafayezada has dedicated his time and skills to reform what could potentially be Afghanistan’s major ally in rebuilding its economy, aviation.
Dr. Wafayezada has contributed immensely in overseeing discussions, negotiations and agreements to expand Afghanistan’s aviation footprint domestically and internationally as well as improving the country’s aviation infrastructure and technologies to enhance passenger and cargo connectivity.
Prior to joining the ACAA, Dr. Wafayezada served as a lecturer and held several leadership roles in nongovernment organizations. He studied for more than five years in Japan, earning a Master’s Degree and Ph.D. from the Kanazawa University. His doctorate research focused on ethnic politics, democratization and peacebuilding in post-conflict multi- ethnic societies
The air cargo industry, which accounts for about a third of global trade transported annually valued at over US$6 trillion, continues to struggle to fully embrace digitalization but major companies in different continents have long initiated steps to transition their operations from traditional way to digital, eliminating in the process much of the paperwork.
New technologies are redefining the way we live, work Nand how business is done. The transformation has been rapid in recent years with varying industries, including air freight, forced to adopt to digitalization by reshaping their business and operating models or be left out in a highly competitive digital world.
The digital transformation’s impact on air cargo industry is noticeable. Less paper work. Fast transaction. Transparent tracking system and so on. Undoubtedly, it has immense potential to create added value for businesses, benefit consumers and communities in general even in remotest parts of the planet.
According to World Economic Forum’s Digital Transformation Initiative (DTI), companies are investing in new technologies mainly to accelerate growth and productivity. Their total investment spend is projected to increase to US$2.4 trillion in 2020, focused on seven key technologies—Artificial Intelligence (AI), Internet of Things (IoT) and connected devices, Robots & Drones, Custom Manufacturing and 3D Printing, Autonomous Vehicles, Big Data Analytics & Clouds and Social Media & Platforms.
This year, more companies are seen to change their business models to adopt to the changing times, noticeably the air transport sector.
The air cargo industry, which accounts for about a third of global trade transported annually valued at over US$6 trillion, continues to struggle to fully embrace digitalization but major companies in different continents have long initiated steps to transition their operations from traditional way to digital, eliminating in the process much of the paperwork.
Any digitalization project costs a fortune to initiate and maintain. The disruption entails creating specific systems tailored for that particular company’s needs and nature of business, having the new digital systems tested by a certified software testing firm, embedding it with adequate protection against malware and invasions, training employees to efficiently use the new systems, among other things.
Unless the digital systems (software) are licensed perpetually, digitalization means costs for upgrades and continued use. Utilizing new technologies is a tedious process that requires resources, skills and knowledge but companies are convinced this is an efficient way to do business in today’s digital world and the future.
The rise of e-booking platforms
Germany’s national cargo carrier, Lufthansa Cargo, considered a leader in eAWB (electronic AirWay Bill) and electronic bookings, launched in November of 2019 its smartBooking, a new digital interface (application programming interface or API), providing customers and partners a binding offer that can be booked online immediately.
“It contains the available routings, capacities and prices and automatically executes all relevant checks. This means that the offer can be booked in real time and confirmed straightaway. With smartBooking, Lufthansa Cargo has completely digitalized the offer and booking process,” explained Jacqueline Casini, Senior Director Communications, Marketing & Corporate Responsibility at Lufthansa Cargo.
Moving forward, Lufthansa mulls offering air freight forwarders the option of directly connecting their own systems via an API.
This year, more companies are seen to change their business models to adopt to the changing times, noticeably the air transport sector.
B2B transactions are increasingly being driven by technologies to create convenient and fast services and Lufthansa is highly cognizant of this.
The TIACA Chairman said digitalization will continue to be on top of their agenda for many months.
As the freight division of Emirates, Emirates SkyCargo has access to the airline’s fleet of over 265 modern wide-body aircraft. The carrier operates to 13 destinations in the US, offering cargo capacity on over 100 weekly flights including scheduled freighter services to destinations including Columbus, Chicago, Houston and New York.
“Perspectively, external sales platforms will also be successively connected,” Casini told Air Cargo Update noting that, “Aside from Lufthansa Cargo’s direct customers, partners such as significantly growing cargo.one can also use the smartBooking API to make their platforms even more informative and customer-oriented with immediate access to available capacities and prices.”
B2B transactions are increasingly being driven by technologies to create convenient and fast services and Lufthansa is highly cognizant of this.
“B2B transactions are increasingly driven by customer experience and customer experience is driven by the experience of consumers in a digital world, convenient and fast services
supported by technology. This experience is a driver for change in the B2B world where customers increasingly demand the same as a consumer, e.g. instant information on shipment status, real time prices, instant confirmation of bookings, paperless transactions, provision of data, integration of services in apps, convenient and fast user interfaces, connectivity. All of that is driven by technology,” said Casini.
In December of 2019, Lu hansa Cargo began using Rapid Rate Response on all of its own booking channels generating spot price offers for all customers based in the following pilot markets: Thailand, Vietnam, North and Northeast India, Beijing, Middle East, Iran, Turkey, USA (California, Nevada, Arizona, Hawaii, New York, Connecticut, New Jersey, Massachusetts, Maine, New Hampshire, Vermont, Rhode Island, Washington, Oregon, Idaho, Alaska), Mexico, Spain, Portugal, Cologne and Stuttgart. It plans to extend the system worldwide by the end of 2020.
Digitalization has also paved the way for startups like cargo.one, a multi-booking airline e-booking platform which counts as among its clients Etihad Cargo, Lufthansa Cargo, All Nippon Airways (ANA), AirBridge Cargo, AirCargo Logic, etc.
“cargo.one gives forwarders the ability to search, compare and book air cargo capacity across multiple airlines with live spot rates in less than 2 minutes,” the company pointed out on its website.
Digitalization Drive
The powerful global trade body, The International Air Cargo Association (TIACA), says pushing for more digitalization in the air cargo industry remains a top agenda.
Steven Polmans, TIACA Chairman, said many of their members are well aware of digitalization’s importance and had since taken the initiative to introduce newer technologies in their operations. But he agreed much needs to be done.
“Digital is everywhere today. The world is becoming more and more digital and so is the air cargo industry. So, obviously, digital is no longer an option for air cargo stakeholders and most of them have already understood the fact, if we take a look at what has been already developed within the industry. Many initiatives have already been implemented and are something particularly appreciated by TIACA since it contributes to air cargo development,” Polmans said.
“But the form that digitalization takes within the individual companies is a strategic choice for each of them, whether it concerns e-booking platforms, or any other digital tools aimed at improving efficiency, for instance. TIACA’s role is to promote the best practices or best initiatives in this area but in no way to offer strategic guidance on it,” he added.
The TIACA Chairman said digitalization will continue to be on top of their agenda for many months and years to come and vowed to support existing programs or initiatives harnessing the benefits of digital innovation in the industry.
“TIACA will also continue to motivate change to a digital environment, organizing both digital workshop and training events, and giving digital a prominent place in our summit meetings, for instance during the next Air Cargo Forum which will be held in Miami in November,” he said.
The global trade association representing 290 airlines in 117 countries, the International Air Transport Association (IATA), is also pushing for an end-to-end paperless transportation for air cargo through regulatory framework, modern electronic messages and high data quality.
On January 1, 2019, IATA successfully adopted an industry-wide policy that e-AWB is the new default contract of carriage for all air cargo shipments on enabled trade lanes. It took nine years to implement it after the policy was first introduced in 2010 but IATA said it’s a major milestone for their quest to digitalize the air cargo industry.
e-AWB essentially eliminates paper-based processes, improved efficiency and reliability of overall cargo handling process by decreasing handling errors.
Adrien Thominet, ECS Group CEO
“The major orientations that we will develop in 2020 are in the continuation of the transformation efforts undertaken this year. In terms of digit alization, we are working on new solutions that will reduce the process costs of the airlines we represent. These solutions already exist within the frame work of TCM contracts (messaging solutions, fuel cost management, etc.)”
Innovative Solution
In the Middle East, Emirates SkyCargo launched in October 2019 Emirates Delivers, a new e-commerce delivery platform allowing customers to shop from multiple online retailers in the US and have it consolidated for shipment to the UAE, saving them money and time.
Designed for individuals and small businesses in the UAE, Emirates Delivers is a fast, reliable and cost-effective e-commerce shipping solution that can also be used by other e-commerce businesses and logistics integrators.
Emirates says customers have to go through a free registration process at www.emiratesdelivers.com. On completion of registration, members are allocated a unique and free Emirates Delivers mailing address in the USA. Customers can have their online purchases from US e-commerce retailers delivered to this address where the goods can be stored free of charge for up to 30 days.
Customers have the flexibility to create a shipping request anytime within these 30 days and have their purchases consolidated into one parcel and have this delivered to their designated UAE address. The packages will be transported to Dubai on Emirates SkyCargo’s flights from the US and will then be delivered to the shopper’s doorstep within 3-5 days of the creation of the shipping request.
As the freight division of Emirates, Emirates SkyCargo has access to the airline’s fleet of over 265 modern wide-body aircraft including 12 freighters- 11 Boeing 777-Fs and one B747F. The carrier operates to 13 destinations in the US, offering cargo capacity on over 100 weekly flights including scheduled freighter services to destinations including Columbus, Chicago, Houston and New York.
Tech investments
ECS Group, a global leader in the GSA industry, dealing with dozens of airlines around the world said digitalization makes things faster, transparent and more efficient.
The Group, the largest integrated GSSA worldwide with more than 69 subsidiaries and 137 offices spanning across 47 countries, said it will continue investing on technologies.
“The major orientations that we will develop in 2020 are in the continuation of the transformation efforts undertaken this year. In terms of digitalization, we are working on new solutions that will reduce the process costs of the airlines we represent. These solutions already exist within the framework of TCM contracts (messaging solutions, fuel cost management, etc.),” shared Adrien Thominet, ECS Group CEO.
“In addition, we are also working on the design of webportal solutions for e-booking as well as e-quotes solutions, always with the aim of simplifying and facilitating the exchange of information in order to improve efficiency and performance,” he added.
Last year, the Group intensified its digital transformation through introduction of various innovative systems.
“In 2019, we have intensified the digital transformation of our group to serve the business, in order to strengthen the level of services offered to our customers and to improve performance,” shared Thominet. “First of all, Apollo (our business intelligence tool), which provides us with real-time data analysis and visualization on our markets. This data allows us to perform highly professional and personalized sales planning, sales steering, performance management and income optimization.”
“Our teams have also created Pathfinder, an internal Track & Trace system developed for the airlines we represent under a TCM contract. This provides our clients with a real-time view of their shipment status via a user interface, which is also available on mobile phones and allows them to sign up to receive email notifications. This application also provides a real-time map view of the position of the aircraft containing the cargo,” he noted.
Technology has made the world smaller and faster.Real time communication with people from all over the world at different time zones through phones and gadgets
