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.
We’ve heard so much about Amazon and other online global giants growing faster than expected in the digital world. And behind their success is an efficient air shipment and logistics to ensure fast delivery of goods ordered online by individuals or small and medium enterprises.
The US-based XPO Logistics, Inc. (NYSE: XPO) is among these multibillion major global freight and logistics firms helping the e-commerce industry grow even faster.
What sets XPO apart from competition is it’s focused primarily in providing truck brokerage and less-than-truckload (LTL) freight transport services, using its proprietary technology, including the cutting-edge XPO Connect automated freight marketplace, to move goods efficiently through the supply chains across 30 countries.
The company is the brainchild of serial American entrepreneur Bradley Jacobs who has built five billion-dollar or multi-billion-dollar corporations from scratch, including three publicly traded corporations — United Waste Systems, United Rentals and XPO Logistics.
In July, XPO Logistics completed the spin-off of GXO Logistics, Inc., the largest pure-play contract logistics provider in the world with approximately 94,000 team members and 869 logistics facilities in 27 countries. Both companies are now separately traded at NYSE with the symbols “XPO” and “GXO” with huge forecast for growth given today’s need for more logistics services.
Jacobs, an avid collector of classical art, whose collection includes the much-envied works by Lichtenstein, Calder, de Kooning, and the legendary Picasso, partly credits his love for the piano and math for his successful business ventures, apart from harmonizing his thoughts and actions.
He studied math and piano (classical and jazz) at Bennington College and Brown University before dropping out to make a living.
“Anyone can buy a company. You just have to sign a contract and wire the money. But conceiving how those acquired company parts can be integrated into an organically growing entity takes a special creative talent,” Jacobs told Forbes in an interview. “Even though I’m not writing a song [in integrating companies], I’m thinking of ideas that are abstract. It’s a combination of math and music. I’m visualizing them as clearly as I possibly can in space and time and then actually executing on them.”
Indeed, the invisible rhythm and sequence that harmonized the operations of XPO Logistics made it a success of its own.
“If I have a claim to fame, it’s that my teams and I have built five companies from scratch and all five became billion dollar or multibillion dollar industry leaders. Along the way, we created tens of billions of dollars of value for the public shareholders of United Waste Systems, United Rentals, and XPO Logistics, where I’m Chairman and CEO. All three stocks were ten-baggers, with the share prices rising more than 1,000% since we made the first investment. We achieved this by integrating about 500 acquisitions, developing cutting-edge technology and hiring outrageously talented employees,” Jacobs shared on his LinkedIn profile.
The Tramagal Plant in Portugal will become CO2-neutral by 2022 while plants in Japan set similar goals by 2039
Mitsubishi Fuso Truck and Bus Corporation (MFTBC) – an icon in the Japanese commercial vehicle industry with more than 85 years of history with its FUSO brand, has set its sights on becoming carbon neutral starting next year, continuing to the next decade through 2039.
An integral part of Daimler Truck AG, the company announced its wholly-owned subsidiary in Portugal, will become CO2-neutral by 2022. Its other production plants in Japan will have the same goal targeted to be fully achieved through 2039. Kawasaki and Nakatsu Plants have reduced CO2 emissions by 17% since 2015.
With climate change’s visibly devastating impact to the environment which include massive wildfires, floods, droughts, super strong typhoons, among other things, countries everywhere have accelerated efforts towards decarbonization and carbon neutrality.
Japan, for instance, has adopted the Green Growth Strategy this year which seeks to make its automotive industry carbon neutral.
Mitsubishi Fuso, following Daimler Trucks & Buses’ goals, agreed to offer only new vehicles that are CO2-neutral in driving operations (“tank-to-wheel”) in Europe, Japan and North America by 2039.
Battery-powered vehicles will be introduced and by 2027 the company wants to supplement its vehicle portfolio by adding series-produced hydrogen-powered fuel cell vehicles. The ultimate goal is to achieve CO2-neutral transport on the road by 2050.
“Climate change is a topic that needs to be addressed and solved worldwide. Therefore, the electrification of commercial vehicles cannot be achieved by manufacturers and customers alone. Inter-industry alignment and governmental support will also be vital in establishing effective transformations throughout logistics and the supply chain. Collaborative actions between public and private sectors are essential to succeed in this major challenge,” said Hartmut Schick, President and CEO of MFTBC.
Tramalgal Plant in Portugal, the center of production for the FUSO light-duty Canter and all-electric eCanter Trucks in Europe, is envisioned to be carbon neutral as early as next year.
Initiatives at the Tramagal plant include:
In recent years, the Tramagal plant was able to progressively reduce CO2 emissions and is expecting a further 50% cut in 2021 compared to the previous year before achieving CO2-neutral production in 2022.
Production plants in Japan
Three other MFTBC plants located in Japan – Kawasaki, Toyama and Nakatsu – will follow Tramagal and aim to become CO2-neutral by 2039 at the latest.
At the Kawasaki Plant, where MFTBC’s headquarters is also located, and the Nakatsu Plant, where transmissions are manufactured, the company implemented a 5-year plan to decrease CO2 emissions by 17% compared to 2015 levels.
Building on this track record, MFTBC has created a new roadmap to decarbonize the Kawasaki Plant by 2039. Other facilities crucial to the MFTBC production network, including the bus manufacturing plant in Toyama, as well as the Nakatsu Plant, will also be in scope under the 2039 target.
The plan defines several key methods as follows:
In addition to production areas, MFTBC is also looking at other aspects of the vehicle value chain. At each stage, we have started considering possible ways to reduce and eliminate CO2 emissions, some of which have already been implemented.
Neutral Logistics
Logistics is another area to which MFTBC is turning its attention to promote reduced CO2 emissions across the value chain. It has started evaluating methods of quantifying carbon emissions that occur both when receiving materials and components from our suppliers, and delivering our products to customers. In these areas, MFTBC is already proceeding with the following countermeasures:
MFTBC is creating a carbon neutrality roadmap for its logistics operations and will soon expand these areas of effort.
As part of Daimler Trucks, MFTBC promotes climate protection and sustainability among its suppliers and sets impulses to pursue high standards both within their companies and in their own supply chains.
An example of this effort is the CDP Climate Protection Survey. To create more transparency about the environmental impact of our supply chains, Daimler Trucks works with organizations such as CDP (formerly the Carbon Disclosure Project).
In 2020, key suppliers were invited to participate in an annual survey to report their environmental impact, including their level of CO2 emissions. Until now, suppliers representing more than 70% of the annual purchasing volume of the Daimler Truck and Bus business have been asked to participate, with the scope expected to increase in 2021 and support the effort to reduce CO2 emissions throughout the automotive supply chain.
How has the pandemic impacted the Cargo industry in the Middle East?
With commercial aviation largely tarmacked by the pandemic, there was an overnight capacity impact on trade and cargo movements. On a national level, the UAE government prioritized food security and the ongoing supply of vital food products, as well as huge supplies of PPE, medical and vaccines. As the national carrier, Etihad Cargo played our part in the safe and timely supply of vital and essential cargo from an array of source markets, often putting economic factors aside to operate cargo-only passenger aircraft – often costlier and with limited space, depending on the type of aircraft.
The reduction of passenger flights continues to heavily impact available global capacity and remains a key consideration in constant adjustments to our routes. Providing the required airlift where our customers need it most remains our goal and, to support our customers, we reconfigured five 777-300ERs to enable cabin loading, which provided additional capacity across key routes, largely in Asia.
During the past 12 months, cargo operations have been lifeline of the Etihad group. The agility to adapt our schedules, optimize both our freighter and charter services, and work closely with our partners and customers has ensured we have provided vital support across the globe at a time when our customers have faced challenges.
Have industry players been quick to adapt technology to cater to the changing needs in the market?
Air cargo is traditionally known to be lagging in technology and those carriers unprepared for this new era have found it difficult to survive the current situation. The whole industry needs to adapt to new technologies which enable operational agility.
In 2018, we embarked on a strategy that saw an introduction of several transformation programs across Etihad Cargos’ fleet and network, commercial and operational processes, and its physical and digital infrastructures. This resulted in the carrier’s successful front-end systems migration to the market leading IBS iCargo solution in October 2018 and celebrated the launch of its Online Booking Portal www.etihadcargo.com.
We continued to work with our partners and invest in digital advancements to not only enhance our own internal operations, but also streamline our customer experiences. One of our latest advancements has been the new booking platform which provides an improved booking flow to decrease the amount of time spent on bookings. We are also working on various connectivity partnerships allowing all processes to be increasingly smooth and digital.
Etihad Cargo escalated the investment in establishing market-leading digital solutions from 2018, providing an advantage for our clients and internal operations, especially during the pandemic with so many customers across the globe working from home. A key focus of this development has been with the introduction of our online booking platform and collaborating with third parties to provide additional convenience to the customer booking experience. We have also minimized the need for paper air waybills and physical transactions thanks to major investments aimed at increased electronic air waybill penetration.
In which areas and geographies do you see strongest potential for growth?
Air freight demand remains robust and is currently above pre-COVID-19 levels. We anticipate demand remaining high in the short-term due to the challenging demand-supply dynamic. Asia is still the largest market for growth, which has witnessed significant demand driven largely by B2C purchasing trends. From a customer segment perspective, the pandemic has fast-tracked e-commerce growth which will continue to fuel cargo demand in months ahead.
What technologies do you predict will impact the Cargo industry most in the next five years?
We believe that in light of technological advancements, cargo and the way we view air transport will continue to evolve during the next five years. We are likely to witness the “uberisation of the air cargo industry” as the rise of digital solutions reduces costs, increases efficiency, increases flexibility, and enables greater speed and scale, which in turn will foster innovation. without precedents.
An intelligent cargo ecosystem of agile applications can combine data insight, automation, and connectivity to enhance intelligent ways of transporting cargo around the world to improve efficiencies. While it is considered that cargo has been slow to embrace technological change, that change is now happening and we will soon see the increasing integration and digitization of the air cargo industry.
The utilization of drones in cargo is something that is picking up pace. The introduction of drones for last-mile requirements provides an innovative solution for the delivery of time and temperature sensitive shipments. In fact, according to a survey from Pharma.Aero and Humanitarian Logistics Association, more than half (58.3 percent) anticipate drone deployment within their organization in one to five years.
What are your expectations from Dubai Airshow 2021 – which will be the first of its kind event since the Coronavirus outbreak?
Major air shows and global conferences retain tremendous value to the industry at large and this year’s Dubai Airshow will take on even greater significance because of its timing.
By the end of the year, we expect more international air corridors to have opened and the global vaccination program to be at an advanced stage – these factors will foster significant increases in air travel.
Dubai Airshow is an opportunity for the global aviation industry to meet at a live, in-person event for the first time in almost two years. We are planning to connect with existing partners and look forward to collaborative discussions with potential partners.
What are Etihad Cargo plans ahead in the region?
Our fundamental priority is to keep our customers at the core of everything we do; it is our mission to provide positive experiences and build long-term relations. Our future plans revolve around new products, services and capabilities, while other business developments will be revealed closer to the event.
With the rise in ecommerce demand, how to you plan to manage long term capacity growth?
E-commerce demand appears destined to grow and carriers must continue adapting networks and schedules to manage volume. At a macro industry level, we predict increased preferences for reshoring or near-shoring supply chains to build resilience and agility amid potential turmoil – be that a pandemic, or geo-political in nature. It’s a question of reducing risk, and we see valuable collaborations with e-commerce players coming into effect to mitigate risk wherever possible.
In terms of volumes during the pandemic, we saw a significant increase in courier levels to service vital commodity supplies during 2020. We’ve seen significant increases of exports from the UK, and we’ve also seen a lot of shipments inbound from the far East into the UK and Ireland. With Etihad Cargo operating from a strategic geographic hub between these monolithic markets of East and West, we are well-placed to service ever-growing e-commerce demand.
How can the cargo industry reduce its C02 impact while keeping up with the next day delivery culture?
The development of liquid biofuels provides a viable low-CO2 alternative to kerosene. In 2019, Etihad operated its first commercial flight using locally produced sustainable fuel. This heralds the way for increased research and development in this area and we continue to explore potential solutions across our fleets.
Etihad Cargo is committed to being Greener Together, a simple statement expressing our pledge to minimize environmental impact by integrating sustainable day-to-day operations. We expanded our ULD fleet from 3,000 units in 2012 to 4,700 in 2021, establishing innovative solutions to support the company’s sustainability zero-carbon target.
We also introduced Lightweight ULDs – which are 20kg lighter than their aluminium counterparts – resulting in reduced fuel consumption. The move contributed to a total weight reduction of 830 tons per month on wide-bodied flights, and reduced carbon emission by approximately 444 tons.
Editor’s Note:Interview and photo courtesy of Dubai Airshow, one of the world’s biggest aerospace events, showcasing the most innovative aviation products and solutions, exciting static displays and a host ofother features and thought leadership conferences. Air Cargo Update and Aviation Guide are proud media partners of this mega event which attracted participants from 148 countries in 2019.
Etihad Cargo is sponsoring the event’s Cargo Connectexhibition.The UAE’s national airfreight carrier offer customers access to a large network of chartered and scheduled services worldwide. Its special products and services include SkyStables (Equine), LiveAnimals, TempCheck (IATA CEIV Pharma), FreshForward (IATA CEIV Fresh), FlightValet (Automobile), SafeGuard and FlyCulture (Vulnerables).
Etihad Cargo is a founding partner in HOPE Consortium, the Abu Dhabi-led alliance of public and private sectors to address COVID 19 vaccine logistics and facilitate vaccine availability across the world.
Capping this year’s most anticipated global aviation event is the Dubai Airshow Gala Dinner hosted by Dubai Airports with performances from spectacular list of artists, including Jennifer Lopez, Sir Tom Jones, Diana Ross, Stevie Wonder, Katy Perry, OneRepublic and many more. For more info, visit www.dubaiairshow.aero.
The 2020 pandemic kept the airfreight industry extremely busy transporting life-saving medical supplies and other essentials. Their critical mission remains along with the additional role of distributing billions of COVID-19 vaccines to save people andto facilitate trade between businesses and economies to avert another global crisis.
Air cargo and its ecosystem are no doubt critical to pandemic response worldwide, supplying population needs, saving lives, and the success of the global economic recovery efforts.
“Since the beginning of the Covid-19 pandemic situation, air freighters have been of vital importance in keeping global supply chains functioning for the delivery of time-sensitive materials and medicines. Within this framework, Turkish Cargo has been adapting its operations in terms of dedicated cargo freighters along with the utilization of cargo capacity in passenger aircraft through its wide network around the world. Our company ensured a global air cargo bridge worth 130 thousand tons in 2020 and 101 thousand tons for the period of January-July 2021,” said TurhanÖzen, Chief Cargo Officer, Turkish Airlines.
Turkish Cargo, the cargo brand of Turkey’s national airline, was there to fill in the gaps to ensure the uninterrupted supply of urgent medical supplies like masks, PPE, oxygen, ventilators, medicines, among other things, across the world.
Worldwide, the cargo carrier’s teams worked round-the-clock, dedicating their precious time and energydespite the threat of the virus, to ensure the safe transportation of these essential goods for humanity’s sake.
By end 2020, Turkish Cargo’s revenue climbed up by 143.4% compared to 2019 and its global tonnage share rose from 5.3% to 7.2% during the same period. In the first 7 months of 2021, its revenue further increased by 10.5% and global tonnage share for this product group rose from 7.4% to 8% compared to the previous year.
And in no time, Turkish Cargo has successfully transitioned itself as one of the world’s three largest pharma carriers.
“During this period, there has been a huge demand on medical supplies and Turkish Cargo transported medicines, masks, medical equipment, Covid-19 vaccines and humanitarian aid all over the world with care and reliance. At this point, Turkish Cargo played a major role in maintaining critical air connections by prioritizing these shipments with its increasing responsibility in parallel with its rising market share. Turkish Cargo achieved a revenue increase of 143.4% in 2020 compared to 2019 in transportation of medical supplies, and raised global tonnage market share from 5.3% to 7.2% by the end of 2020. In the first 7 months of 2021, revenue increased by 10.5% and global tonnage share for this product group rose from 7.4% to 8% compared to the previous year,” Özenexplained.
Transition to SmartIst, Istanbul’s mega cargo hub
This year, Turkish Cargo is preparing for bigger things to come with its scheduled move to Istanbul Airport, currently the world’s biggest airport, where the airfreight carrier will have its mega cargo facility designed to handle as much as 4 million tons annually.
SmartIst is set to be fully operational this year and is aimed at further enhancing the brand’s activities in the years to come.
“Turkish Cargo’s SmartIST facility, which will provide a capacity opportunity of 2 million tons on annual basis at the first phase, will achieve a capacity of 4 million tons on annual basis at an area of 340,000 square meters upon the completion of the second phase,” said Özen.
How does it work? The Turkish Cargo CCO further explained, “Turkish Cargo’s SmartIST facility will be equipped with Industry 4.0, Logistics R&D, Innovative studies and technological infrastructure. Two different systems, will be used, namely PCHS (Pallet Control Handling System) and ASRS (Automatic Storage and Retrieval System), for automation of the processes.
“PCHS system will be used to store the ULDs, which are unloaded from the aircraft or ready to be loaded on board the aircraft, and to transfer the same to the intended location automatically. ASRS system will be used to store the smaller cargo packages, comprising the contents of the ULDs, and to transfer them to the intended location automatically, if and when so needed. These brand-new systems use their own artificial intelligence to optimize their movements, resulting in minimization of any intervention by employees and therefore enhancing quality of service.
“The new facility will address the needs of the market and maximize customer satisfaction by ensuring that all special cargo processes, from acceptance to delivery, in private areas (perishable, pharmaceuticals, valuable cargo, live animal transportation, express, e-commerce cargo) are carried out with the highest possible standards of quality.”
SmartIst will be powered up by integrated smart technologies such as Augmented Reality, Automatic Storage Systems, Robotic Process Automation and Unmanned Ground Vehicles, thus, ensuring seamless fast and seamless operations at the mega cargo hub.
Read on the rest of our interview with Özen, the aviation and cargo stalwart leading Turkish Cargo to achieve greater heights even in uncertain times.
You’re uniquely positioned with two hubs— Istanbul Airport and Ataturk. Can you please tell us what’s focused on each hub and how important are they in your mission and quest to position the brand as among the top 3 air cargo companies in the world?
Due to global transformations, the rapid development of e-commerce with technological developments and the fact that the word ‘speed’ has become even more important in trade, air cargo companies needed to serve with more capacity.
The increasing of air cargo capacities also affects airports directly. While air cargo companies are trying to expand their fleet and flight network, airports have turned to increase their storage capacity, technology, modernization and digital transformation processes.
As Turkish Cargo, we respond to the needs of the sector with our agile structure by closely following global changes and technological developments. Within this framework, we have built our SmartIST facility at Istanbul Airport, which is becoming a high-end logistics attraction center, in line with the carrier’s long-term targets.
In the upcoming period, Turkish Cargo will then be moving to SmartIST, where the entire operations will be carried out under one roof at Istanbul Airport.
When it comes to carrying pharmaceuticals, Turkish Cargo is a name to be reckoned with. Kindly share with us your accomplishments in this area, particularly in terms of handling COVID-19 vaccines.,
During the Covid-19 pandemic, Turkish Cargo, largely contributed to the sustainability of the global supply chain by transporting shipments of food, pharmaceuticals, medical equipment as well as shipments for urgent needs from/to Turkey and the four corners of the world.
With the start of the vaccine distribution, Turkish Cargo, successfully carried more than 300 million vaccine doses, which is approximately 1500 tons, from the vaccine production centers to destinations in its wide flight network, representing over 600 flights.
Our flag carrier brand transported the Covid-19 vaccines to key and certificated destinations such as Turkey, Baku, Rome, Belgrade, Copenhagen, Beirut, Miami, Sao Paulo and Mexico City, creating a global corridor between more than 400 destinations. With 30 years of experience when it comes to special cargo transportation, Turkish Cargo proved its capability with vaccines that have different transportation requirements by carrying 7 different Covid-19 vaccines in containers with special cooling systems.
With these successful operations, Turkish Cargo increased global market share to 8 percent in pharmaceutical transportation and became one of the most active carriers in vaccine transportation.
What are your plans to make your pharma capabilities and facilities stronger now that it’s certain that air cargo’s main mission of distributing vaccines and other vital medical supplies remain crucial to humanity’s survival? (Please include info on people training, certifications, etc.)
Turkish Cargo’s Istanbul Hub has special storage areas for temperature-controlled medicines, vaccines, medical supplies and food products. All products are monitored with hygienic and standard maintenance processes.
Perishable cargo with sensitivity to temperature are stored thanks to special storage rooms with four different temperature ranges at the cargo terminal equipped with high standards. Temperature values of special cargo rooms are monitored via the telemetry automatic system, and there is a system in place which is capable of sending an automatic message in case of any alarm caused by any difference in the temperature range.
Thermal covers and thermal dolly services are provided upon customers’ request for protection against external environment conditions for perishable cargo with sensitivity to temperature. For temperature sensitive products, thermal dolly is used as an auxiliary equipment to prevent any deterioration in the contents of the products during carriage from temperature-controlled areas to baggage area or vice versa for operations with a connection period of up to 4 hours.
Perishable cargo is monitored under an agreement with the Active Cold Chain brand Envirotainer, which provides our customers with active temperature-controlled containers and QEP (Qualified Envirotainer Provider), referring to the accreditation proving that an airline company is capable of performing the Envirotainer transportation operations successfully at stations.
Turkish Cargo, carries out operations at top level by holding the “CEIV Pharma” certificate issued by IATA CEIV (Center of Excellence for Independent Validators). We continue to take off with our special products established for shipment of pharmaceuticals and medical supplies, and access more than 300 destinations in 127 countries across the world.
Larger terminal and better service at the New Mega Hub;
What are the biggest challenges facing the air cargo industry in our current situation? Please share your opinion on how this can be addressed.
The issues, experienced currently by the air cargo industry can be listed under a few main topics. Such issues involve the topics, namely digitalization, capacity, security and safety, liberalization, sustainability and intra-industry cooperation, respectively.
Digitalization
Air cargo industry has still not taken the steps expected to be taken for the digital transformation. The significance of the digital transformation is demonstrated by the industries such as banking that has overcome the issues which have arisen in global terms and been observed in particular during the course of the pandemic.
Continuing to work considerably on paper at the present, airline industry experiences quality and transparency issues in integrated supply chains such as forwarders, shippers, ground handlers and truckers.
As a solution for such issue, e-AWB and e-Freight initiatives, which the airlines have a key role, have made a noteworthy progress during the recent period of 5 years. Similarly, air cargo industry, in which speed and safety have a substantial precedence compared to the other modes, has made a great progress towards the capability to track the shipments instantaneously and communicating the shipment movements instantaneously to the consignor and the consignees.
Finally, the use of robots at the warehouse processes have started and the processes have been automated as led by the E-Commerce and Express industry, and all stakeholders have headed towards such type of investments due to the cost savings as based on the acceleration of the operations.
Capacity
The outbreak of Covid-19, which has been declared as a global pandemic in March 2020, had negative effects also on the air cargo industry just as it had for all of the other industries. The travel restrictions, exportation limitations and measures taken for sealing the borders, started to be implemented for the purpose of fighting against the pandemic, have notedly affected the international airliner traffic.
The flights operated by the airliners that carry only cargo (paxfre or preighter flights), which have been started in March 2020 by the airlines as a dynamic solution, can be given as an example as the solution for such issue.
Apart from that, we observe that airlines have started to make use of their freight fleets more actively and also that the orders for the freighters have also increased worldwide. We are of the opinion that such solutions will provide significant contributions to the offering of such needed capacity to the industry.
Safety and Security
We can summarize the safety and security issue in the air cargo industry as the differentiation of the guidelines and interpretations established by the governments and the associations and also as the adaptation of the security and safety processes applied during the course of the shipment of the cargo to the new situation related to the pandemic.
New security screening technologies are being considered but the follow-up and coordination are required for the purpose of ensuring that the stakeholders of any and all business models in the air cargo industry act in accordance to new regulations. As a solution for such issue, standardization and enhancement of the cooperation between all stakeholders in the industry.
Sustainability
Along with the global warming, quest for clean energy prompts the search of alternative resources in respect of the environmentally hazardous fuels in terms of carbon emission. Investment in such fields by the companies will place significant burdens in financial terms, coupled with the ACCF (Air Cargo Carbon FootPrint) program, implemented by IATA for the purpose of accomplishment of its projects under the sustainability heading. Revenue-decreasing factors may be encountered in the fields such as reduction of the tonnages being carried (due to fuel consumption) and modernization of the fleets due to the risks of sanctions by the regulatory and supervisory supranational organizations. In respect of such issues, companies managed to reduce the fuel costs further, in particular, with the increase at the factory-fresh and younger freighter fleet during the recent years. 2% of the global carbon emission is generated purely by aviation; given the fact that the share of aviation is lower as compared to that of maritime transportation, which constitute 4% of the global carbon emission, air cargo is the mode of transport at which the carbon emission per shipment is the highest. All stakeholders of the air cargo industry will also have a key role in the accomplishment of the carbon emission targets set for the aviation industry.
How important is digitalization in the industry as we thread through the new normal?
The future of air cargo is based on technological developments and digital transformations.
In the last five years, several air cargo companies have involved with virtual integrations due to the digital developments. Therefore, we think that the air cargo sector has entered into a rapid development in digitalization and technology. We think that this will continue rapidly in the upcoming periods.
The air cargo industry is growing very rapidly. An estimated 7.4 billion parcels are flown each year, and approximately 2.5 million lives are saved every year thanks to vaccines shipped via air, according to the IATA. This huge industry is changing and developing still. The development of technology enables new trends to emerge.
Air transport new trends; Next generation fuel types; ‘Sustainable aviation fuel (SAF)’, less emissions, more efficient aircraft and of course; ‘The rise of e-freight’, Fuel savings with light pallets and containers; ‘Lightweight unit load devices (ULD)’ an ‘Investments in carbon offsets’ etc. The increase in sectoral competition also increases the tendency to new trends.
Customers of the modern world demand complete and perfect visibility, faster, safer and more effective transportation, online tracking and much more control on where, when and how their cargo are moving. The air cargo stakeholders have already adopted the emerging technologies such as Virtual Reality, Iot (Internet of Things), cloud and E-Freight in the modern innovation journey, and what’s more, wearable products have started to be used for Big Data analytics, block chain, drones and animals.
Air cargo communities that can keep up with technological developments and complete digital transformation processes will be positioned as leaders in the sector.
Speaking of digitalization, can you tell us more about Turkish Cargo’s investment on innovations and technology?
Turkish Cargo always strive to gear up ourselves in order to provide better service to our customers and target to be one of the best air cargo carrier in 2023.
Within the scope of this important goal, we took good steps towards digitalization and one of them is of them is our robotic process automation. We have been running a robotic process automation (RPA) for our internal business processes known as RPA since 2019. Currently, we have 5 different robots named Alpha, Bravo, Charlie, Delta, Foxtrot which are responsible for a total of 10+ different processes in Turkish Cargo for now and adding more and more processes as we go along the way.
For our new cargo terminal SmartIST is the biggest project we are processing in Istanbul now and target to move all operations over to this new facility this year. It is built to reach 4m tonnes of annual capacity when all phases are completed. Inside the SmartIST, we also aim to use modern technology such as automated storage systems, 3D ULD planning and unmanned ground vehicles and integrate them fully into warehouse management systems and work process.
Besides, we create the online booking system TKGO for our customers, all forwarders can be able to perform online bookings, tracking transaction, claim case.
In our Region, over 70% of the cargo reservation is directly done by this platform, customers could be able to perform their transactions online 24/7 without any intermediaries. Also, our on-going digitalize system, Turkish Cargo Chatbot (Cargy) is launched early this year, offers customers an easily way to get instant shipment details in 24/7 including AWB status, tariff, station capability through the exclusive WhatsApp account.
Please share some lessons we could all learn from this pandemic.
Supply Chain – The pandemic period, especially the critical processes in vaccine transportation, have shown us that air cargo logistics is vital for the sustainability of the supply chain even under difficult conditions. As the flag carrier brand, we are among the most active carriers in pharmaceutical transport with a global market share of 8 percent in vaccine transportation and in line with the ever-increasing vaccination, we commit to be fully involved in the process throughout 2021.
Digital transformation – The global pandemic has created vulnerability over the world economy and trade. During the period we have been getting through, Turkish Cargo has rapidly adapted to the changing circumstances to maintain continuity of logistics and supply chain was of vital importance indeed, through experience.
Technological infrastructure investments made by Turkish Cargo towards digitalization and initiatives focused on e-Commerce, which we started long before COVID-19, have been crucial in practice during the pandemic period. The brand will go further enhancing service quality to meet the needs of our customers and sector partners, involved in our global network, with conveniences thanks to our digitalization-related activities.
A new online tool called CargoBooking.aero supports airlines and their General Sales Agents (GSAs) to deliver instant air cargo quoting and booking with Application Programming Interface (API) integration to freight forwarders.
The solution, powered by global IT service provider and software development company Awery Aviation Software, gives a consolidated view of all connected airlines and GSA prices on possible flight and truck routing options.
“The digital transformation of the air cargo industry is gaining momentum, enhancing efficiency and cost effectiveness across the supply chain,” said Tristan Koch, Awery’s new Chief Commercial Officer.
“Our in-house team has been working together for over 12 years to develop aviation software solutions to support the digitization of the industry, and with CargoBooking, we are delivering a streamlined user experience connecting capacity and demand.”
CargoBooking provides information in real time on flights and rates facilitating an instant search, quote, compare, and book solution via a customer portal, by email, or API.
Users can review combined filterable results of flight or truck all-in rates from multiple airlines and GSAs with a detailed breakdown of surcharges.
Options include an instant booking request, a SPOT rate request, or saving the price as an option on the quote.
The instant booking request can be done on airline-integrated air waybill stock, and requests are validated and confirmed by the airline or GSA.
In case of no space, an alternative flight is offered to the client for review.
“CargoBooking brings together a wide group of skilled and experienced professionals to deliver a product that leads the way in helping the air cargo industry to embrace and benefit from its digital transformation,” said VitalySmilianets,Awery Chief Executive Officer.
“Tristan has brought over 20 years’ experience in air cargo to the team supporting the work of our in-house developers to launch a solution, which facilitates the full air freight business workflow.”
CargoBooking.aero supports customers of all sizes and includes a built-in track and trace facility.
SEKO Logistics has completed its largest acquisition to-date with its investment in Paris-headquartered transportation and logistics group Bansard International, merging the complementary geographic footprints and service offerings of the two companies.
The combination will produce significant benefits and growth opportunities for the clients and employees of both companies, as SEKO Logistics embarks on the latest stage of its global expansion strategy with the support of its equity investor, Ridgemont Equity Partners. This is SEKO’s largest strategic investment since selecting Ridgemont as its new investment partner in December 2020 and represents ‘a clear statement of intent’ of the company’s growth ambition, said James Gagne, SEKO’s President & CEO.
Bansard International is one of the leading transportation and logistics operators in France and, since its formation in 1963, has created a thriving international business spanning 54 offices in 17 countries. With about 600 employees, Bansard International achieved sales of more than €210 million in 2020, serving a diverse customer base in the retail/fashion, electronics, industrial, aerospace and pharmaceutical industries, among others.
Simon Pinto, President of Bansard, will continue to lead Bansard, a formerly family-held company. He remains personally invested in the combined business and will continue to build the company’s product and service portfolio for Bansard’s more than 5,000 longstanding clients.
Bansard provides complete door-to-door logistics management services, covering consultancy, freight forwarding, warehousing, de/consolidation, transportation management, quality control, and customs clearance services.
SEKO and Bansard’s complementary service offerings will produce immediate benefits for each company’s clients. SEKO will offer Bansard’s clients the opportunity to grow their sales in the U.S. and UK markets through access to its national network of stations, as well as SEKO’s fast-growing, cross border ecommerce and omni-channel fulfillment solutions. SEKO will benefit from Bansard’s highly respected business operations in France, international branches, strong Asia-Europe inbound air and ocean freight volumes, and innovative sustainability programs for carbon
calculations and offsets.
“SEKO Logistics is primed for the next stage of our global growth but, in terms of acquisitions, we select our preferred partners with great care and due diligence. Bansard International is a perfect fit with our own business model as a mid-sized, independent, growth and technology-driven, client-obsessed organization. We are excited to work with Simon and his fantastic team to drive benefits for the clients of both companies,” James Gagne said.
He added: “There are so many positive aspects of our new collaboration. France is such an important logistics market, even more so since Brexit. Working with Bansard, we are making a long-term commitment to clients in France and those across the globe trading with France. In Europe, this new investment adds to SEKO’s strong presence in the United Kingdom, Ireland, the Netherlands and Denmark and puts us on a rapid upward trajectory. We are continuing to explore further investments to strengthen our global network and service portfolio.”
Announcing Ridgemont Equity Partners, a Charlotte-based middle market buyout and growth equity investor, as its newest investment partner at the end of 2020, SEKO said the move launched the next phase of its expansion, with plans for additional acquisitions, technology platform investments, and growth in key geographies.
“This merger is a unique strategic opportunity that allows Bansard International to become a global player by covering new geographies, including the United States, and by offering our customers innovative international transport solutions, especially for e-commerce. It is good news for our customers, for our employees and for our suppliers, thanks to the growth prospects through diversification of services, better international coverage and higher potential for technological development,” said Simon Pinto, President of the Bansard International Group.
Kale Logistics Solutions (Kale) has been awarded with the coveted Digital Solutions Provider of the Year Award at the Logistics & Transport Awards 2021, which took place in Sofitel Dubai The Obelisk, Dubai, UAE.
The Logistics & Transport Awards 2021 recognize the past achievements and future strategies of logistics and supply chain companies. The awards cater to individuals and companies from a variety of sectors, from transportation, cargo, and warehouses, to e-commerce, supply chain and technology.
Kale has been chosen as the Digital Solutions Provider of the Year for its significant contribution to digital trade facilitation and paperless trade worldwide with its next-gen cargo community systems.
Airport Cargo Community System, Port Community System, Regulatory Single Window, Logistics E-marketplace and Digital Trade Corridors are some of the ground-breaking offerings from Kale.
The award recognizes Kale’s role in driving digital transformation in the logistics industry to make it more agile and future-ready.
Kale has the pedigree for creating the world’s most innovative and best products. It has developed most industry first solutions like North America’s first airport cargo community system, the first digital corridor powered by blockchain between India and the Netherlands. In the UAE, Kale has partnered with dnata (part of the Emirates group) to create the next generation e-commerce community platform in Dubai.
“We feel humbled to have been recognized as Digital Solutions Provider of the Year,” said Vineet Malhotra, Director, Kale Logistics Solutions.
“Since inception, Kale has been at the forefront of digitalization in the logistics industry.
“As the preferred growth and transformation partner to leading global enterprises and Government bodies, Kale helps them offer more trade visibility, reduced cargo dwell time, personalized customer interactions, enhanced employee experience, improved regulatory compliance, and accelerated innovation.”
Lufthansa has extended its cargo handling contract with Worldwide Flight Services (WFS) in Ireland.
The airline was one of WFS’ launch customers in Ireland in 2005 and its operations are supported by WFS’ stations in Dublin, Cork and Shannon. The airline currently operates four flights a day connecting Dublin and Frankfurt, as well as twice-daily Dublin-Munich services.
WFS also provides handling services for Lufthansa’s trucking operations ex Ireland to Frankfurt, Manchester and London.
“We are proud to have retained this prestigious handling contract for so long. Lufthansa is highly respected for the quality of its cargo operations in Ireland, and we support the airline and its customers through our dedicated team’s clear understanding of its service requirements. WFS has shown its ability to adapt to Lufthansa’s products and growth goals and we are delighted to see our efforts rewarded. We look forward to continuing this long and successful partnership,” said Simon Coomber, General Manager of WFS in Ireland.
WFS has continued to develop its cargo handling operations in Dublin, Cork and Shannon, where its 4,500 sqmts of warehouse space incorporates the largest temperature-controlled facilities in Ireland. WFS now handles over 40,000 tons of cargo per annum for airline clients in Ireland, including Swiss International Air Lines, which has also renewed its handling contract with WFS in the past 12 months
Vertiv, a global provider of critical digital infrastructure and continuity solutions, recently announced the availability of single phase uninterruptible power supply (UPS) systems with lithium-ion battery models, expanding its portfolio of line-interactive UPS. With capacities ranging from 1500 – 3000VA in tower and rack-mount convertible designs, the highly-efficient single-phase Vertiv™ Edge Lithium-Ion UPS family is now available across Europe, the Middle East and Africa (EMEA).
Thanks to their lower maintenance requirements, lithium-ion batteries (also known as Li-ion or LIB) are a natural fit for deployments at the edge of the network, where IT support is limited. Compared with valve-regulated lead acid (VRLA) batteries, lithium-ion batteries have up to 3x longer life, which improves total cost of ownership (TCO). Moreover, they perform with greater efficiencies at higher temperatures, are smaller, lighter and deliver longer runtimes than VRLA batteries used for UPS systems in these capacities. The Vertiv Edge Lithium-Ion UPS family provides up to 10 minutes of battery backup at full load, as opposed to approximately 4-5 minutes for a standard UPS with VRLA batteries.
“As digitalization increases, many applications are moving to the edge of the network and require reliable power protection,” said KarstenWinther, vice president sales for Vertiv in EMEA. “UPS systems with lithium-ion batteries offer cost and operation benefits, and also reduce the need for on-site maintenance. Ultimately this means more stability and savings for critical edge deployments, and a wider range of options for our customers.”
The Vertiv Edge Lithium-Ion UPS is ideal for edge computing sites and for healthcare, banking, education, retail and government applications. It comes with a standard five-year warranty on the electronics and battery. The system can be integrated with the Vertiv™ VR Rack for a standardized IT infrastructure solution that can be easily deployed across various edge locations.
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
