Advancements in air cargo, logistics
Rapid economic growth in air cargo industry of the Middle Eastern countries continues to lead annual growth. CARGOTALK speaks to various industry experts as to what are some of the new innovations in the air cargo and freight forwarding sector.
- Abigail Mathias
Leonard Rodrigues, Head, Revenue Management & Network Planning, Etihad Cargo
Etihad Cargo reviews its fleet, which is one of the fuel-efficient in the industry, to ensure we can meet our customers’ capacity requirements.
This year, in response to increased demand for project cargo demand, Etihad Cargo is considering leasing additional aircraft to our customers, should extra capacity be required. In the medium term, Etihad Cargo in partnership with Etihad Engineering and IAI, is positioned to convert B777 passenger aircraft to freighters. However, in the backdrop of current demand for passenger travel, the introduction of this new type of freighter is not expected to enter the fleet until late 2025. In the longer term, we are expecting the delivery of the first of seven A350F freighters in 2026.
About 70 per cent of the materials used to manufacture the A350F are composite, and the aircraft will offer more capacity, while being lighter than existing aircraft. The new freighter promises to demonstrate ‘unbeatable fuel efficiency’, with 20 per cent lower fuel burn and CO2 emissions than the current best in class. The A350F fully meets ICAO’s enhanced CO2 emissions standards coming into effect in 2027. We are also working with the Airbus to further enhance the aircraft and its features so that it is tailor-made for Etihad Cargo and its customers.
In addition to expanding our fleet, Etihad Cargo is also utilizing technology to enhance freight handling. In partnership with SPEEDCARGO, Etihad Cargo is trialing automated dimension and volume scanning to roll out digital solutions that will optimize efficiency and offload recovery. By replacing traditional manual load plans with fully automated 3D load plans, we will ensure consistent and accurate values are utilized during loading and offloading.
This automated AI-driven process will allow us to make maximum use of available cargo capacity. To further enhance efficiency and handling capabilities, Etihad Cargo is providing ground handlers with the technology and giving them practical tools and training to show them how to build up cargo for loading step-by-step, which will ultimately make the process more efficient and reduce human errors. We expect to roll out these AI solutions to all our stations in the next three to five years. We are also innovating how we operate across our global network. Utilizing a hybrid model, Etihad Cargo supports its customers in-country, with most Etihad Cargo sales teams and many customer service tasks conducted by trusted global sales agents.
We are leveraging the power of the vast amount of data we have collected, data processing tools and Machine Learning (ML) to provide relevant insights and information that has enabled us to professionalize our sales teams and improve the customer experience. Wherever customer-facing Etihad Cargo team members and global sales agents are located, they can access market-based data via personalized dashboards, providing more transparency and improving commercial relationships, which benefit our customers by ensuring we have the information required to make data-driven decisions.
In the coming months, we will be sharing exciting news about how we are unlocking the potential of data to benefit not only our customers and partners, but also the wider air cargo industry.
Lionel van der Walt, Chief Growth Officer, Raft
The most revolutionary development in freight forwarding currently is Artificial Intelligence (AI), which optimizes day-to-day operations in an industry that has always been manual. It is not just a buzzword, but an everyday tool prompting the industry to rethink the way we work.
A major challenge faced by freight forwarders is the processing of unstructured data that comes from different sources, such as PDFs, EDI invoices, Excel files, and emails. AI-powered platforms such as Raft are managing the process, from extracting and understanding the data to integrations with TMS’ and other operating systems which facilitate intelligent workflow automations, detailed management reporting, and improved visibility and decision-making. This results in an enhanced customer experience and improved profitability. Another challenge to freight forwarders is scalability, as the teams work across multiple offices, branches, and geographies. Automation can help improve collaboration, communication, and workflow by allowing teams to work together, tag colleagues, maintain an audit trail, and receive notifications to avoid cluttering email threads. By streamlining and scaling daily operational processes, forwarders save time and money to avoid fines due to delays or lack of compliance with regulatory needs.
Thomas Gregory, CEO & Co-Founder, Fusion Specialized Shipping & Logistics
With the manufacturing industry dominating the air cargo space, the FMCG/Retail and the Pharma/Chemical industries are making the cake bigger now. The air cargo segment is expected to grow at a compound annual growth rate (CAGR) of over 5 per cent in the next five years with an increase of nearly 20 million tons. The key factors that continue to drive the air cargo market growth are e-commerce sales and the rise in demand for temperature-sensitive products.
As the return of space available in passenger aircraft is not instantaneous, converted aircraft have continued to bridge the gap and are going strong.
Secondly, more freighters are being deployed to support trends in the diversification of manufacturing industry. With the projected growth rate of more than 5 per cent, the freighter fleet is expected to grow more than 50 per cent larger than we have today.
More companies in these key sectors see value in making their products/cargo available with the end users quicker, and hence have opted to take the air route over the conventional sea route. This has now planted the seeds in the likes of the ocean freight carrier giants namely MAERSK, CMA and MSC to ambitiously venture into investing in air freight space. Apart from a large fleet of vessels and containers, they now also own a couple of freighter aircraft.
Prashanth Balakrishnan, General Manager, Orient Cargo
In recent years, there have been several new developments and changes in air cargo aircraft aimed at increasing efficiency, reducing costs, and improving safety. Some of these include:
More efficient engines: The new generation air cargo aircraft are being equipped with efficient and eco-friendly engines that consume less fuel, emit lesser pollutants, and reduced noise pollution. They also contribute a part to a green environment.
Increased cargo capacity: Many airlines are modifying their existing fleet or ordering new ones with larger cargo holds to increase the capacity to transport goods in an optimum manner.
Cargo handling process: The freighters are being designed with efficient cargo handling systems such as automated cargo loading and unloading equipment to reduce TAT and improve efficiency.
Advanced avionics and tracking systems: Advanced avionics and automation systems are being installed in cargo planes to help pilots navigate more safely and accurately to reach destinations. Tracking systems are being improved to monitor the temperature and humidity of cargo, ensuring it is transported safely.
The advent of Vertical take-off and landing (VTOL) autonomous aircraft: Soon there could be a few VTOLs making trips to deliver critical cargo from point A to B, which will help save time. Eventually, there could be a higher cargo capacity coming into service replacing small delivery vehicles that deliver cargo from the cargo terminal.
Overall, these new developments and changes in the air cargo aircraft are likely to help cargo airlines operate efficiently, reduce costs, and provide better service to freight customers.
Rami Younes, Chief Operating Officer, ALS Logistic Solutions
The future of air cargo material handling is increasingly focused on automation. With the rapid advancements in technology, automation has become more accessible and affordable, leading to the development of automated cargo handling systems specifically designed for air cargo, such as automated cargo terminals, conveyor systems, automated storage and retrieval systems, elevated transfer vehicles, and autonomous vehicles.
These technologies are transforming the way air cargo is handled, making the process more efficient, safe, and cost-effective. Automation is beneficial for air cargo handling as it can reduce handling times, increase capacity, and improve cargo traceability.
In the future, we can expect to see further innovations in air cargo handling automation, including the integration of artificial intelligence, autonomous driving vehicles and machine learning to optimize processes and increase productivity.
ALS Logistic Solutions is a leading automation solution provider of material handling, cargo, and car park systems. With more than 30 years of experience, the company has proven its expertise in ergonomic space-saving solutions for warehouses and parking areas. ALS products and services range covers airport consulting and Information Technology Solutions, air cargo handling systems, automated storage, and retrieval systems (high-bay warehousing), warehouse management systems, and automated car parks.
Shibu George, CEO, KRS Logistics
The logistics field has had significant developments over the past few years, especially after the impact of the pandemic. Space constraints and equipment shortage issues are being resolved these days, the exaggerated and unaffordable freight level has also gone back to normal.
Currently, the cost for international logistics is at its best for both the service providers as well as the importers/exporters. Pre-pandemic era on the lowest sea freight level will not be back but same time the unrealistic freight levels of 2020-2022 will not be applicable in the coming years as well. The developments in IT have played a crucial role during COVID based on work from home culture and it will be continued in an effective manner in coming years. Due to the growth of e-commerce in recent years, logistics providers are evolving to meet customer demands digitally. New trade agreements have been created as a result, and international cooperation has increased.
Global air logistics is expected to grow at a CAGR of above 3 per cent till 2027. The airlines hike their capacity after the COVID in relation to global transportation needs. This has decreased the freight rates and thus air cargo is anticipated to increase as well. Due to technological advancements and changing consumer behaviour, the logistics industry is going through changes. The future might see more of these developments, which might transform how goods are delivered and transported.
Simona Bakaya, United Legacy Travels, Operations Manager, Kuwait
There have been many strategic developments in air cargo, especially over the past five years. Air cargo remains an engine of economic growth and its crucial role during the pandemic has created positive momentum as the industry enters its recovery phase.
Many airports have managed to sustain or grow their cargo operations during the pandemic, which has proven crucial in providing liquidity for airport operators and in some cases, ensured the longer-term solvency of the airport business.
Air cargo continues to face significant challenges such as fallen global trade volumes, global economic activity, weakening consumer confidence, and indicating further declines. However, the market is expected to grow due to factors such as a strong demand for manufacturing exports and increased penetration of advanced technologies in the value chain.
Nabeel Alkharabsheh, General Manager, AJEX Logistics Services
Traditional logistics companies have no choice but to change. They must become more responsive, agile, and resilient, and diversify service offering by either offering new services or enhancing the current ones. Air freight in the Middle East presents both challenges and opportunities.
While one opportunity allows for easy access to global markets, another allows growth of e-commerce and logistics industries, which drives demand for air cargo services. However, the industry also faces challenges, such as rising fuel costs, competition from other transport moves and the impact of the pandemic. These challenges require the industry to adapt and innovate to remain competitive. Air freight in the Middle East has potential to keep expanding, but it will require a combination of strategic planning investment in technology and infrastructure and management of challenges that arise.
Steven Polmans, VP Business Development & Free Zone Abu Dhabi Airports
Our home carrier, Etihad Airlines, is important for us as they guarantee base requirement and they are open to exploring new opportunities, helping us build a bigger ecosystem on top of their network. Our colleagues from the aviation marketing team are working hard to attract new wide body passenger airlines, and it is good to see cargo uplift is an important decision point for these carriers. From our side, we are working on attracting new full cargo airlines and we are pleased that in Q2 of this year, we will be able to add three scheduled operators to our customer base.
Sustainability is here to stay. Many stakeholders are taking big steps in reducing their carbon footprint. At the same time, I think it is vital that when we talk about sustainability, we not just talk about the component environmental, which is a part of sustainability. Today, for too many participants focus on the environmental part as it gets the most attention. For that reason, it is good that certain sustainability programs such as the TIACA BlueSky program are created and gaining momentum.
As we are still a fragmented supply chain, collaboration is significant between the stakeholders. It is as important to dare to take small steps and make progress bit by bit, working towards that long-term goal.
Joanna Rizou, Founder, Aviation Professional
The air cargo industry in the Middle East, Asia has seen a significant growth in the recent years, such as focusing on establishing major cargo hubs in the GCC (AUH/DOH and of course DXB Airport. The major players in the region (EY/QR/EK) have invested in infrastructure, advanced technology, and equipment, expanding and upgrading C-terminals. They created effective partnerships with other significant international air cargo operators and caused an expansion of their reach worldwide.
The Middle East, Asia experienced the demand and rise of e-commerce, which eased the process for companies to get goods efficiently across borders. I believe it is important to hint that digital solutions and Artificial Intelligence (AI) support, wherever it has already been implemented, can streamline the efficiency of air cargo operations and this trend is expected to continue in the coming years.
Gerton Hulsman, Board of Directors, Cool Chain Association
When many meets and exhibitions are organized again, it is time to reflect on connectivity. Where the world meets again and stakeholders exchange ideas in all modalities. Improvements that will benefit the industry. Improvements in working methods and a reduction in administrative workloads. Based on the idea of improving all our efforts, preventing waste, and ensuring the merchandise whatever it contains, arrives in an optimal condition. This means, that the pearls that made by every stakeholder do not remain an independent ‘pearl’, but that we all turn them into a pearl necklace. It is necessary to form a Digital Assembly Line.
The effort to ensure quality is improved and guaranteed and that all parties in the chain benefit from it. This connection will lead to like-minded ideas and solutions and true knowledge sharing. Embarking for a better world.