A dynamic approach to challenges

posted on 8th March 2023
A dynamic approach to challenges

The past few years have demonstrated that cooperation and partnerships deliver greater results than the sum of their parts, even in the most challenging conditions, says Martin Drew, senior vice president for global sales and cargo at Etihad Airways

What are your expectations about how the market or your main areas of business will develop in 2023?

“Although economic indicators suggest continued long-term growth for the air cargo market, significant economic headwinds will continue to impact the sector in the short term. IATA forecasts that global air cargo volumes will decline by 4%, year-on-year, in 2023, following an 8% drop in 2022. IATA further predicts cargo volume will decrease from 60.3 million tonnes in 2022 to 57.7 million tonnes in 2023 as the market normalises after significant growth during the COVID-19 pandemic. According to IATA, cargo revenue is expected to reach $149.4 billion in 2023, down from $201.4 billion in 2022. However, this is still approximately 50% higher than pre-pandemic levels.
“While 2023 will present challenges for the aviation sector, there is certainly light at the end of the tunnel. We finally saw restrictions being fully lifted in China. While IATA still forecasts a drop for that region, we believe we will start seeing a recovery starting this year. Etihad Cargo is continuing to fill flights with cargo, albeit with a disciplined approach to yields. The unexpected surge in passenger travel is having an impact on cargo capacity in the short term, but the effects will lessen as carriers start receiving the delivery of new aircraft in 2023 and beyond.”

A busy year
“For Etihad Cargo, 2023 is going to be a busy year. We are focused on building on the momentum we have gained over the last few years and achieving sustainable growth. We recently announced the return of four A380s. The return of these aircraft will potentially free up other aircraft that can be used to provide additional capacity to other destinations. We have already announced the introduction of new destinations to our expanding network, including Copenhagen and Chennai, the reinstatement of other destinations, such as Düsseldorf, and increased frequencies to key stations, including Shanghai. We will continue to explore opportunities to expand our network and services to meet the capacity demands of customers.
“We will also be expanding our road feeder service network, enhancing the trucking service we provide in key markets.”

Investing in infrastructure
“Here in our Abu Dhabi hub, Etihad Cargo is investing in infrastructure, with the upcoming launch of a state-of-the-art cool chain facility that will significantly enhance our pharmaceutical and perishables capabilities and capacity. Additionally, we’ll be opening a new animal facility, which will enhance our LiveAnimals and SkyStables product offerings.
“Other key developments will be the continuation of our digitalisation journey, with the launch of new solutions and features that will improve the customer experience while enabling us to achieve greater efficiency in our operations.”

What challenges and opportunities do you anticipate, and how do you plan to respond to these?

“While 2023 will no doubt see some challenges, there is a tremendous opportunity for growth. Etihad Cargo is working closely with our partners and customers to respond to challenging market conditions dynamically, using them as an opportunity to enhance our products and services, and we will continue to focus on providing capacity on key routes and expanding our network and operations through a customer-centric approach.
“In terms of the challenges, inflation, the threat of recession, the slowdown of Chinese air trade, high fuel prices, and talent retention will no doubt continue to impact the air cargo sector in 2023. We have already witnessed the softening of yields with the normalisation of the market and reintroduction of capacity. In some regions, yield rates have already returned to pre-pandemic levels, while in others, yields may take longer to return to 2019 levels. The return of widebody passenger flights has normalised freighter utilisation and reduced pressure on the air cargo market. However, if we continue to see the high levels of passenger travel witnessed in the last quarter of 2022, belly capacity will remain a challenge in the new year until carriers receive the delivery of new aircraft.

“While these challenges will need to be monitored, we already know what to expect in 2023, and Etihad Cargo is confident we have the right strategy in place. In terms of developments in key verticals and opportunities for Etihad Cargo, the pharmaceuticals sector remains high on our agenda. In recent years, Abu Dhabi has enhanced its position as a world-class pharmaceutical logistics hub, investing in strategic public and private sector collaborations to establish the emirate as a destination focused on global welfare and advanced life sciences. As the country’s national carrier, Etihad Cargo has fully aligned with Abu Dhabi’s vision and expanded its dedicated pharmaceutical transportation product, PharmaLife, to support the emirate’s ambitions.

Pharma hub potential
“Abu Dhabi’s unique location makes the city a prime candidate to become a global pharmaceutical hub. The UAE offers a bridge between not only Asia and Europe but also the USA and Africa. Etihad Cargo’s Abu Dhabi pharmaceutical hub will serve all continents with the exception of South America, and this is precisely why we are focusing on Pharma Interline agreements that will provide connections with countries to which we currently don’t fly directly.”

Digitalisation opportunities
“Digitalisation will also present tremendous opportunities for the air cargo sector. Traditionally, the sector has lagged in terms of adopting new technology. However, we have seen a significant surge in the development and utilisation of digital solutions over the last few years. Etihad Cargo is using technology to enhance the customer experience and make the booking process easier, working closely with our partners. We will further enhance our digital offering, and we will be adding more features to our online booking portal and improving our customer service, as well as rolling out artificial intelligence solutions that will optimise efficiency and offload recovery.
“Last but not least, sustainability remains a top priority, and there is huge potential for us to lead the way in making our sector greener and creating a brighter future. Choosing sustainable solutions is paramount for the future of the industry. Etihad Cargo is committed to the Emirate of Abu Dhabi’s vision of achieving Net Zero by 2050, and this is demonstrated by our continuous achievements over the years, the latest being the first Net Zero Flight last year and our investments in alternative fuels and carbon offsets. In 2023, we look forward to rolling out the cargo carbon calculator we are co-developing with IATA, which will enable not only Etihad Cargo to make the transportation of cargo more sustainable but also the wider industry.”

What role will new and emerging technologies play?

“Of paramount importance is that digitalisation and emerging technologies are embraced not for the sake of new technology but to enhance the customer experience or increase efficiencies in the transportation of cargo. Over the last few years, Etihad Cargo has accelerated its development of technology advancements to provide efficient and simplified customer experiences by establishing key partnerships. For example, in 2021, we launched an enhanced version of our online booking portal, offering a streamlined booking process with minimal data entry to help save Etihad Cargo’s customers’ time.
“Etihad Cargo’s digital transformation also saw us automate solutions at our state-of-the-art Cargo Control Centre, which monitors and steers its global cargo flows round-the-clock. Smart solutions adopted include the automation of customer messaging, pre-alert messages to inform stakeholders at its hub and outstations, service-level monitoring of handling providers, identification of service failures or irregularities to allow for immediate response actions, and live tracking of trucking services.
“Etihad Cargo is investing in artificial intelligence (AI), and has entered a proof-of-concept agreement with SPEEDCARGO, a Singapore-based logistics technology solutions provider. We will utilise AI products to boost the capacity of flights.
“Etihad Cargo will also utilise this solution to improve customer satisfaction by minimising offload and automating accurate data receipts. Additionally, Etihad Cargo’s customers will benefit from quicker response times for freighter charter quotations and highly transparent and accountable billing.”

How can you and other stakeholders in the air freight supply chain work more effectively in 2023, and beyond, to streamline cargo operational processes and improve cooperation across the air logistics chain?

“Collaboration has been essential in the air cargo sector and will continue to be a key success driver in the future. The past few years have demonstrated that cooperation and partnerships deliver greater results than the sum of their parts, even in the most challenging conditions. At the centre of successful partnerships and collaborations are transparent communication and a clear understanding of desired outcomes or results.








“We have already witnessed great collaboration in Abu Dhabi, demonstrating the opportunities collaboration between different parts of the supply chain can bring. We established the HOPE Consortium in Abu Dhabi within weeks of the onset of the pandemic, and all partners committed to the procurement and delivery of COVID-19 vaccines to where they were needed. We worked together in setting the industry standard for partnerships, delivering hundreds of millions of vaccines around the world, and this was the first step toward establishing Abu Dhabi as a pharma and life science hub.
“Furthermore, Abu Dhabi has opened its doors to support the logistics industry by facilitating the relocation of key logistics companies to be based in the Emirate as a key hub connecting the East and the West. Abu Dhabi Airport offers a fantastic opportunity for large companies across a diverse range of sectors to build facilities in close proximity to the airport. In recent years, Abu Dhabi has cemented its position as a global hub for business, offering world-class infrastructure with easy access to regional and international markets. The emirate facilitates investment in facilities linked to the capital’s airport, offering companies a strategic location to enhance or expand their operations. Etihad Cargo will remain committed to collaboration and establishing partnerships that enable us to enhance our product offering.”

What have you been doing in 2022 to improve air freight efficiency, processes, operations and communications, and what will you do in 2023?

“In 2022, we achieved Cargo iQ recertification, which is the core of Etihad Cargo’s Service Delivery and Performance Management. We were the first Middle Eastern airline and only the third globally to hold IATA’s CEIV Live Animals, Fresh and Pharma certifications in 2022. This globally recognised certification demonstrates Etihad Cargo’s products meet strict quality controls.
“We also launched an enhanced booking portal that supports English and Mandarin. Following the roll-out of new updates, including an enhanced look-to-book feature, a dynamic newsfeed and personalised dashboards, bookings made via the portal have surged, increasing by 57%. We have also ensured a seamless connection with third-party portals to simplify the booking process for our customers.
“To enhance the customer experience, Etihad Cargo has launched a new CRM system, which has empowered customer service agents with more customer-focused data. The new system has also provided Etihad Cargo’s customer service team with improved tools, including an updated case management system, and customer information, such as the customer’s history, purchase records, sales interactions and a 360-degree view of customer queries.
“Etihad Cargo’s agility, resilience and commitment to delivering on our promises have been key to our success over the last couple of years.”