Exploring Etihad Cargo's Growth Trajectory in 2023: Network Expansion and Partnerships

Situated strategically at the epicenter of the world’s busiest trade lanes, Etihad Cargo serves as a crucial link connecting Africa, America, Asia, Australia, Europe, and the Middle East through its hub in Abu Dhabi.

With a fleet comprising both passenger and freighter aircraft, coupled with an expansive trucking network, Etihad Cargo has the capability to deliver services to virtually any corner of the globe.

Air Cargo Update’s Associate Publisher Poonam Chawla explores with Latha Narayan, Director Commercial APAC, Australasia and ISC of Etihad Cargo the strategic importance of Etihad Cargo’s central location and its multifaceted approach to delivering comprehensive and efficient cargo services, meeting the diverse logistics requirements of a global clientele.

Etihad Cargo has had good results in 2022, how has 2023 been so far? What kind of growth are you witnessing and what are the driving factors?

In 2023, Etihad Cargo has built on the success of 2022. We have continued to grow our network and have increased frequencies across key routes, operating 1,340 flights to 70 destinations across Asia, Europe, Africa and the US. 335 of these weekly scheduled passenger and freighter flights serve Asia, and we have strengthened our commitment to this market with our winter schedule, which has introduced additional cargo capacity via new routes and increased frequencies. For example, we have added Ezhou to our Chinese network and opened a second Japanese gateway destination, Osaka. In addition to adding Kozhikode and Thiruvananthapuram to our Indian network, we have increased frequencies to Kochi and Chennai, including a freighter service that connects Chennai with Shanghai.

Partnerships have played a pivotal role in our growth. Earlier this year, we entered into a mutual blockspace agreement with China’s SF Airlines. As a result of this partnership, we are providing our customers and partners with greater access to 25 offline domestic destinations, including Shenzhen, Hangzhou, Chengdu and Nanjing, with plans to add more destinations in the future. The introduction of Ezhou to Etihad Cargo’s Chinese network has enabled Etihad Cargo to offer greater connectivity to China’s five national-level city clusters via the airport’s transportation infrastructure, including railway, waterway, expressway and air links.

How many dedicated freighters do you have? What percentage of business comes from belly cargo?

Etihad Cargo operates five dedicated freighters. As a combination carrier, our partners and customers benefit from belly hold capacity on board passenger flights, supported by freighters to key markets, and 42% of our total capacity is provided by our freighters versus 58% belly hold capacity.

How is Asia-Pacific performing in cargo, what kind of cargo is majorly moved from Asia?

Asia-Pacific is a key region for Etihad Cargo, and we have continuously expanded our operations in this market to ensure we are meeting the increased capacity needs of our customers. We transport a variety of cargo to and from Asia, and we are focusing on specialised commodities in addition to general cargo via our eight-strong premium product range.

E-commerce in this region is booming, driven by garments and electronics. The region is a major source of goods for online retailers, and the time-sensitive nature of e-commerce transactions often requires the speed and reliability offered by airfreight. Etihad Cargo has continued to develop its dedicated e-commerce product to meet the demand for this sector.

We have also seen increased demand for perishables and pharmaceuticals. 15-20% of our perishables and pharmaceuticals cargo originates from Asia, and 60-70% of our volumes are destined for Asia. In addition to India being one of our top perishable markets, the pharmaceuticals sector is also growing. The country is establishing itself as a healthcare hub, which is driving demand for our IATA CEIV Pharma-certified products. Hyderabad, for example, is a top healthcare and active pharmaceutical ingredients (API) commodity production and distribution area. We estimate that up to 50 per cent of global flows ex-Hyderabad are currently from this segment. Some of the commodities transported out of Hyderabad require a temperature-controlled environment and advanced packaging solutions. Etihad Cargo’s PharmaLife product is perfectly positioned to address these needs.

Another growing sector in Asia is consumer electronics and high-tech premium products, including semiconductors. Etihad Cargo has witnessed a significant increase in demand for the transportation of consumer electronics and semiconductors, and high-tech commodities represent a significant share of our business in Asia. For example, we have uplifted 900% more volumes of semiconductors in 2023 compared to 2022.

Last year you received IATA CEIV pharma recertification, has this helped move pharma from Asia, a major pharma manufacturing hub?

In 2019, Etihad Cargo achieved IATA CEIV Pharma certification for pharmaceutical and life science logistics in conjunction with its hub at Abu Dhabi International Airport and Etihad Airport Services. We achieved recertification in 2022, which demonstrates Etihad Cargo’s full compliance with specific pharmaceutical regulations in terms of Good Distribution Practices (GDP), a quality system for warehouses and distribution centres dedicated to medicines.

As the first carrier in the Middle East to be awarded CEIV Pharma certification, Etihad Cargo connects more than 1,330 CEIV Pharma and GDP Pharma-certified trade lanes, including those in Asia, ensuring that all pharmaceutical shipments are safe and secure at every stage of the journey.

Since achieving this certification, we have continued to enhance our IATA CEIV Pharma-certified PharmaLife product, launching innovative features and utilising technology so our partners and customers in Asia and globally can be confident their temperature-sensitive pharmaceutical products are being shipped reliably. For example, we are exploring the utilisation of artificial intelligence to improve forecasting and automation to enhance our current capacity and capabilities to support the sector’s growth. We have also launched dedicated thermal covers, which are helping Etihad Cargo to mitigate environmental risks during the transportation of pharmaceuticals between the cool chain facility and aircraft and handover moments.

What are your expansion plans in Asia-Pacific in growing the cargo segment?

Asia-Pacific is a key region for Etihad Cargo, and we will continue to evaluate and enhance our network to meet capacity demand. Partnerships will also continue to be a focus for Etihad Cargo as a key enabler to expanding our capacity for this region and addressing the growing demand for pharmaceuticals and e-commerce. Following the success of our recent agreement with SF Airlines to connect our Abu Dhabi and Hubei Province mega hubs, we are also exploring further partnerships that will benefit not only Etihad Cargo’s customers but also further position Abu Dhabi as a global logistics and express hub.

Etihad Cargo will also continue to develop and launch innovative digital solutions to facilitate the carrier’s growth, further enhance the experience of our partners and customers, and remain the air cargo partner of choice. In 2023, we launched artificial intelligence (AI) solutions in Singapore in partnership with Speedcargo Technologies and dnata. These AI-powered solutions will boost efficiency, digitise and standardise cargo handling across Etihad Cargo’s network, and enhance service levels for the carrier’s customers and partners. Following the successful launch in Singapore, we will be rolling out these solutions to other stations in our network.

To ensure we are adding value to all our partnerships and offering a seamless customer journey, we will also continue to add enhanced features to our online booking portal and utilise Sales Cockpit — a state-of-the-art digital solution to optimise the customer experience. The key benefit to Etihad Cargo’s customers of using Sales Cockpit is that our teams across our global network have access to tailored data they can utilise in the specific conversations that happen in each market with each existing or potential customer. Sales Cockpit will essentially help Etihad Cargo to communicate those conversations with relevant sales teams, in a true joint effort between global and regional teams.