Customer-Centric Digitalisation Key to Post-Pandemic Air Cargo Success
Digitalisation is being vaunted as the silver bullet to answering key challenges facing cargo and other industries as disruption tightens its grip on a global distribution system facing major COVID-19 induced challenges.
Yet Etihad Cargo, the Etihad Aviation Group’s cargo and logistics arm, says tech for tech’s sake just won’t cut it, and digital transformation strategies have to be keenly aligned to customer needs and expectations with technology fully integrated across the eco-system for sustainable, viable outcomes.
During the height of the pandemic, the carrier swiftly pivoted to surmount challenges while simultaneously leveraging its solid pharmaceutical and network capabilities, particularly through co-founding Abu Dhabi’s HOPE Consortium – the ‘first-of-its-kind’ complete private-public sector supply chain solution to aid global vaccine distribution – and by escalating its digital transformation.
As the pandemic took hold, the carrier reached out to industry-wide stakeholders to fulfill commitments and address the worldwide capacity shortage hampering international supply flows.
“The biggest challenge was navigating the stringent border control measures implemented worldwide,” explained Martin Drew, Senior Vice President Sales and Cargo, Etihad Aviation Group.
Responding to the immediacy of the challenge, the carrier enhanced its monitoring and co-operation with various authorities and addressed added crew planning complexities.
Martin Drew adds: “Measures were rapidly adapted to address required roster changes and shift patterns to protect pilots, crew, riding engineers, loadmasters, and ground staff, whilst maintaining strict occupational health and safety measures in line with the World Health Organisation, the UAE Ministry of Health, UAE GCAA and Abu Dhabi Department of Health guidelines, to safeguard frontline operational employee wellbeing.”
The carrier reconfigured five aircraft for cargo in-cabin loading, supported customers, as well as UAE Government aid programmes, and collaborated with UNICEF on pharma and aid initiatives utilising its pharmaceutical expertise and global connectivity.
Its HOPE Consortium contribution highlighted how supply chain resilience emanates from having the right mix of partners, products and solutions, particularly in addressing the cold-chain complexities of vaccine supply, as well as tight alignment on shared values and complementary capabilities.
As the first Middle East carrier to earn IATA’s Centre of Excellence for Independent Validators certification in pharmaceutical logistics – Etihad Cargo takes pharmaceutical transportation very seriously.
It expanded its existing pharma reach in Africa with a Service Legal Agreement with Astral Aviation and Kenya Airways to provide reliable and cost-effective airfreight solutions across the continent.
The SLA ensures Etihad Cargo partners are fully compliant with the latest GDP and IATA Pharma regulations and standards, and guarantees processes are standardised and performed to the highest quality.
Network & Fleet Optimisation
The carrier currently services 66 network destinations across the Middle East, Asia, Europe, Africa, and the Americas. Its fleet of 65 aircraft operates 442 weekly rotations, in addition to charter flights which service demand across the globe.
Using specially designed, temperature-controlled equipment, it ships pharmaceuticals in the quickest possible time, adhering to the highest compliance guidelines.
Leonard Rodrigues, Head of Revenue Management and Network Planning, Etihad Cargo explains: “Etihad Cargo also acquired UAE General Civil Aviation Authority approval to expand dry ice carrying capabilities across the Boeing Dreamliner and Boeing 777 fleet, which has supported the ability to handle vaccines including Pfizer, Moderna, and Sputnik, which currently need to be stored between -70°C to -18°C.”
Earlier this year, the carrier reported a 50% year-on-year rise in pharma shipments under its specialised PharmaLife product.
The carrier has now maximised its fleet utilisation and is operating 10 Boeing 777 – five of which are dedicated freighters – for cargo-only flights.
“Increased passenger demand has also meant that cargo-only passenger flights are now an exception,” adds Rodrigues. “Etihad Cargo has recorded a 20% tonnage uplift compared to pre-COVID levels and resumed 90 of network destinations.”
Rodrigues’ team is currently working on achieving a balance between passenger and cargo revenue: “Data has been gathered continuously from across operations to build accurate feasibility models on what post-COVID demand will look like.
"Demand will remain strong, largely driven by cool chain and e-commerce, which are anticipated to increase at a greater rate.”
Martin Drew is circumspect about the “unbelievable challenges” the pandemic has thrown up for the air cargo industry, yet also optimistic about the route ahead.
“Unexpectedly, it has presented an opportunity to entirely reposition the sector from a necessary eco-system supplier into a highly responsible and innovative economic and social driver,” he affirms. “Providing positive experiences and building long-term relations remains a core mission for the team.”
Drew points to the 2021 launch of a refreshed etihadcargo.com which provided enhanced customer convenience and transparency while streamlining the carrier’s internal processes.
With a whole new look, the website introduced quicker booking processes and streamlined flows, a personalised dashboard, and recommendations. It received more than 1,500 bookings during its first week from 600 users, and users of the new portal have increased by 70% on its previous site.
Following customer feedback, the site also now incorporates a dynamic map of the carrier’s global network and details the capabilities of its outstation teams.
New features such as requesting shipping quotes, booking ad-hoc prices which have been negotiated offline, and booking shipments based on arrival timelines have been introduced, while customers can also create and manage booking templates based on previous purchases.
The time customers take to complete a booking has now been cut from more than two minutes previously to less than 45 seconds, equating to only 12 clicks, compared to 23 needed before.
Etihad Cargo’s ongoing digital investment follows soaring online trade. The carrier registered 60% growth over the past year and currently receives 42.4% of its booking online through its own portal and aggregators.
“The digital portfolio investment builds on the success of Etihad Cargo’s iCargo platform and underlines the commitment to become a leading digitised air cargo carrier that constantly innovates to sharpen the overall customer service value proposition,” commented Drew.
The new Etihad Cargo platform represents a larger company-wide initiative to expand its digital portfolio to streamline services.
The initiative, which began in March 2020, saw the successful launch of a mobile app that enables anywhere, any-time tracking, and real-time, on-the-go access to information including flight status.
Drew said: “The commitment to digitalisation has seen the introduction of several transformation programmes. A core project was the front-end systems migration to IBS iCargo, and the introduction of the state-of-the-art Cargo Control Centre.
"Through this facility the team can track, monitor, and report on all customer shipments in real-time globally, enabling them to address any flags before they become an issue for customers.”
The carrier has an ambitious roadmap for 2022 and beyond which will see it explore various initiatives, some of which are already being developed, to further innovative functionalities through advancements in AI, ML, and 3D visualisation solutions.
Drew explained: “AI and machine learning will be essential in sustaining supply chains, achieving greater efficiencies, leaner inventory, and network design while offsetting warehousing and labour costs.
"Plans revolve around new products, services, and capabilities. Third-party partnerships through the introduction of Validade online booking platforms, and other initiatives have presented additional convenience and visibility for customers.”
Further underpinning Etihad Cargo’s drive towards enhancing operations through AI, the carrier has entered into a Proof-of-Concept agreement with SPEEDCARGO, the leading-edge logistics technology solutions provider, to utilise the Singapore-based provider’s AI products to boost cargo capacity on flights.
The landmark agreement, announced at last week’s Dubai Airshow, makes Etihad Cargo only the second aviation company worldwide to leverage the CARGO EYE dimensioning system, and among only a few global carriers to trial SPEEDCARGO’s AI-powered CARGO MIND software solution.
“By maximising cargo across flights and ULD container configurations according to internal loading rules, Etihad Cargo can boost capacity by more than 3,000 tonnes a year, equating to a significant increase in revenue yield and has the added advantage of significant cost control through manpower savings which could reach 3,720 hours a month,” explained Drew.
COVID’s longer-term legacy, according to Martin Drew, will be a shift in industry perception: “As consumers seek to align with transparent organisations, carriers must prove credentials in helping to deliver a safer world.
"Etihad Cargo is endeavouring to achieve this by signing up to the UNICEF Humanitarian Airfreight Initiative for Vaccine and Essential Medicare Response, and collaborating on the distribution of vaccines, essential medicines, medical devices, and humanitarian supplies.”
Drew maintains that increased accountability will mean a greater focus on professionalism across the sector, which will require investment in product and education: “As a member of IATA’s Time and Temperature Working Group, Etihad Cargo contributes to an ongoing education programme.
"Plans will build on the network of certified pharmaceutical trade lanes that meet consistent standards and assure product integrity; invest in thermal blankets, cool dollies, digital e-booking and co-operate with the powerful cross-industry Pharma.Aero collective.
"Cross-sector collaboration is the new industry normal as the world demands air cargo pharma operations that contribute to a safer and more reliable global environment.”
The industry’s response to the COVID impact, says Drew, has demonstrated the industry’s essential world trade enabler role. “However, significant progress is still needed,” he explained.
Adding: “During the past year, it became apparent why embracing technology is important not only to Etihad Cargo but to the cargo industry at large, to ensure operations remain smooth and to provide customers with the visibility needed on their shipments to monitor the integrity of the product throughout the journey.
"But above all, integrated digitalisation is key in facilitating a customer’s booking experience.
“Digitalisation has a significant impact on sustainability efforts too. To date, Etihad is among the top ten airlines globally in terms of eAWB penetration, and advanced initiatives that save paper and minimise unnecessary loads on flights to reduce fuel emissions are being explored.”
Partnerships the 2022 Factor
Etihad Cargo says 2022 will be the year of partnerships. Rodrigues said: “Third-party partnerships fuelled the industry’s success in navigating the pandemic.
“Last year Etihad Cargo implemented a new global sales distribution structure, appointing personnel in critical markets, where previously the carrier had worked with GSAs. This was a vital move and ensured there was an Etihad Cargo representative driving interests in core markets.
“Additionally, partnerships with third-party digital solutions providers were sought to support our digitalisation efforts by harnessing partners’ software capabilities to complement our Etihad Cargo’s customer knowledge.”
Industry alliances, says Rodrigues, have been a pandemic success story. He says collaboration will continue, whether through effective outsourcing or alliances, to drive the industry forward but in a highly considered fashion.
“Due diligence is crucial in forging sustainable alliances that deliver trust – a key ingredient in pharma transportation,” explained Rodrigues. “Cross-sector collaboration is the new industry normal as the world demands air cargo pharma operations that contribute to a safer global environment.”
Addressing the industry’s carbon emissions record, the carrier recently celebrated the second anniversary of its Etihad Greenliner Programme.
This saw a dedicated Etihad flight between London and Abu Dhabi carry more than 20,000 kgs of cargo on the Boeing 787 Greenliner which emitted 72% less CO2 in total, and 56% less CO2 per payload unit than the equivalent flight in 2019.
“Teams are continually exploring ways in which Etihad Cargo can increase sustainability initiatives across eAWB penetration, and study of sustainable fuels,” explained Drew.
While Drew accepts opportunities exist, he acknowledges the wider industry challenges borne of the pandemic won’t end overnight.
Drew said: “Disruptions have always existed but the new variable is a lack of availability in the sea trade. Traditionally, air cargo only represents one per cent of international trade volumes, and much lower maritime prices helped create a clear separation within the commodities.
"As this separation becomes less clear, it will be increasingly difficult to forecast the correct balance between supply and demand, and air cargo carriers will need to adapt their strategy more frequently.”
The Shape of Things To Come
Looking to the next five years, Drew believes air cargo transport will further evolve. “Further urbanisation of the industry as digital solutions costs reduce is expected, matched with increased efficiencies, flexibility, and greater speed and scale, which in turn will foster innovation without precedent,” he predicts.
“An intelligent cargo eco-system of agile applications can combine data insight, automation, and connectivity to enhance intelligent ways of transporting cargo. While the cargo industry is perceived as having been slow to embrace technological change, that change is now happening.”