Cargo’s caring capacity

posted on 15th September 2020
Cargo’s caring capacity

Will Waters talks to Guillaume Halleux, Chief Officer Cargo at Qatar Airways, about becoming the largest air cargo carrier in the world, the carrier’s We Qare sustainability project, responding to Covid-19, and industry transformation

Partly triggered by the Covid-19 pandemic, Qatar Airways Cargo (QR Cargo) this summer launched the first chapter in an ambitious sustainability project, We Qare – an initiative built upon what it calls the four fundamental pillars of sustainability: economy, environment, society and culture.

Describing We Qare as “a series of concrete air cargo actions designed to create a positive impact on the industry and the world”, the air cargo carrier says the initiative reflects its observation that “the air freight industry must change in line with the new challenges the world is facing”. And as a leading voice within the cargo market, QR Cargo says it is “pioneering the future, sustainable and socially responsible air cargo industry”.

The first part of the project is its ‘1 Million Kilos’ campaign, in which charities will be able to use the services of Qatar Airways Cargo to transport 1,000 tonnes of humanitarian aid and medical supplies around the world, free of charge, during the second half of this year, with Qatar Airways donating the freight capacity to selected customers to give to the charities of their choice.

Explaining the initiative, Guillaume Halleux, Chief Officer Cargo at Qatar Airways, notes: “The pandemic is a tragedy for millions of people, and we looked for ways how we, as an airline, could help those in the greatest difficulty. This solution – shipping 1 million kilos of cargo free of charge – is a firm commitment for QR Cargo. More than just words, we wanted to act and to adopt a comprehensive approach based on actions for the future.”

Top carrier milestone
Explaining how the capacity will be assigned to customers, Halleux tells CAAS: “The 1 Million Kilos project allows Qatar Airways Cargo to say thank you to our freight forwarder customers who have worked hard during the pandemic to keep life-saving supply chains operating despite very challenging circumstances. We became the largest cargo carrier in the world during 2019 and we have seen outstanding growth over the last seven years. The Qatar Airways Cargo team wanted to celebrate that milestone with our customers, so the idea of giving something back to our customers and through them, to the broader society, actually pre-dates Covid-19. We wanted our customers to shine and to donate to charity was a great
way of achieving that.

“We are offering freight forwarders the chance to allocate to shippers of humanitarian aid – including medical equipment and personal protective equipment (PPE) – free air transport on our aircraft and access to our extensive global network.”

The forwarders are given a set number of tonnes that they can allocate, free of charge, and it’s up to them to select the charity or charities of their choice, he explains, adding: “We only ask that the charity confirms that its goods were shipped free of charge. It is not limited to Covid-19 cargo but also for humanitarian aid. There is no more restriction: as long as the charity cargo does not incur an additional operating cost for us and fits into
the airplane, that is OK.”

Halleux says he is happy to report that a number of freight forwarders and ground handlers have offered their door-to-door services free of charge, be it customs processing or pick-up and delivery. “When you do something good, you generate such a buy-in that everybody wants to do something
to help, and everybody loves it,” he notes. “We are both proud and happy that the air cargo industry has joined with us in the true spirit of this project, and to be honest, it is not a surprise. It demonstrates that the air cargo industry is more than just tonnages but is also about human beings working together to help others at a time of a global crisis. Air cargo has taken a leading role in keeping vital supply chains open across every link in the chain.”

Cargo-led project
He confirms that We Qare is a project that was initiated by the cargo team at Qatar Airways, with the aim of “fully incorporating the sustainability issues that lie at the heart of our airline’s cargo activity. This means that We Qare is designed by and for air cargo. But that doesn’t mean that it excludes passenger flights,” he notes. “We are working together – particularly at the sales level – to strengthen our synergies in order to optimise cargo capacity on these flights.”

Halleux says the next stages of the initiative have not yet been fixed.

“We are in the early stages of the We Qare series, but the agenda is in place and is in reaction to how society worldwide is looking at the problems facing humanity,” he explains. “We Qare is designed to be dynamic and a ‘work in progress’, and as such is capable of adapting to meet needs, address developments, and target our priorities. Sustainability is a major topic facing not just the aviation industry, but a whole host of industries and air freight providers will need to play a role in greener supply chains.

“I think that the pandemic has heightened societal awareness of climate change and this has reset the sustainability agenda, meaning that it will go forward at a quicker pace now.

The pandemic has also put a focus on global supply chains, which may see some re-sourcing, which in turn alters the economics of society as a whole and air freight in particular. The air cargo industry, be it the airlines, freight forwarders, ground handlers, airports, road feeder service providers or our shipper partners, need to address these issues with a far greater focus than before.”

Industry change
Asked to say more about how he believes the air freight industry needs to change, Halleux responds: “That is a fundamental but difficult question to answer, because behind it lie a number of complex solutions and legacy issues inherited from past industry practices. We need collaborative, stakeholder-led solutions to tackle future challenges that have accelerated and now loom large in front of us as an industry.

“Internally, our industry is very fragmented with a large number of players and touch points. Externally, the air freight division of many airlines has played a secondary role compared to the better-known passenger side and has not seen the required investment to improve efficiency. That lack of investment in digitisation has meant a lack of transparency in the air freight supply chain.

“Logistics was once not a crucial element but just a necessary element for some shippers and forwarders, something you must go through and not really considered as strategic. That is how the industry worked once; but digitalisation and the internet brought transparency and killed the opaque nature of the market. At the same time, players became highlyqualified professional people with MBAs in logistics and supply chain management for example.”

Digitalisation is key
One key element to this is digitalisation. “Digitalisation will bring a massive disruption to our industry, which remains fragmented,” Halleux notes. “As a major air cargo airline, Qatar Airways Cargo has an obligation to try to accelerate the digital transformation of the industry and that means working with our industry partners. By working together, and with our combined air cargo market shares, we can collectively push the industry in the right direction. As a group we can be a force that drives the change, to take the same strategic direction in digitalisation.

“We have to act more quickly than in the past. We would look at what happened to the travel agent sector and see what lessons it holds. Travel agents at first resisted the change brought by the internet. I worked in France where 80% of the air ticketing business was conducted through travel agents and is probably closer to 10% today. Travel agents did not die out but reinvented themselves by bringing value to customers. It is the same
with some players in our industry who need to change their business models to add value.”

COVID-19 challenges
Explaining how QR Cargo has adapted in response to the challenges presented by the COVID-19 pandemic, Halleux describes all of Qatar Airways
Cargo’s teams as “resilient” – which has enabled the carrier to move forward, despite the enormous challenges.

“Thanks to our reactive strategy – operating passenger aircraft for cargo-only flights, putting lightweight packages on the seats, optimising freight capacity on passenger flights, maintaining our freighter network sometimes at a loss, etc. – we did the highest flying of any airline in the world and it has enabled us to maintain sufficient cargo capacity, allowing our customers to continue their activities,” he says.

“What we see today is that passenger flights will take some time to return to anything like 2019 levels. As long as that bellyhold capacity is not available, it will have a huge impact on the cargo market and rates for at least the next 18 to 24 months.

New organisational set-up “As a result, Qatar Airways has prepared for the future and reorganised our cargo division accordingly. We are no longer in crisis mode: instead, we are operating in what has become known as the ‘new normal’.

“Currently, we fly 180 cargo flights per day – these are aircraft flying with no passengers on board but as cargo-only operations. That compares with 60 (cargoonly) flights per day pre-Covid, so we have tripled the number of operations for which we as cargo are fully accountable – including the safety and security of the aircraft, crew and the financial aspects. For that, you need a whole new set-up as an organisation. It has had its teething problems – and I’m sure we’re not the only ones – but we are now settling in to a new way of working.

“Alongside this, we want our development to be sustainable, and that’s why we implemented We Qare. After all, being adaptable is good, but being able to take action ahead of time and to be an active player in our future is even better.”

Adapting further
On how to adapt further to the ‘new normal’ that is now perhaps beginning to emerge, he responds: “Nobody knows what the cargo demand will be
in the future because of the uncertainties around second spikes of Covid-19 and the timescale for any vaccine, which could be available in the first quarter of 2021. We have planned for a number of scenarios, as best we can without a crystal ball.

“Thre will be many challenges ahead, but the world cannot function if commodities are not being exchanged and global trade cannot survive without air cargo. We are planning to keep supply chains in place by working with freight forwarders and other stakeholders to overcome future obstacles as much as we can. Again, this has to be a collaborative effort and so far, the air cargo industry has shown its flexibility, imaginative thinking and
tireless hard work to keep those vital goods flowing.

“We are currently moving up to 7,000 tonnes a day through our Doha cargo hub and that is the level of a typical October or November in ‘normal times’. The market is returning and, although actual volumes are lower than before (in the market as a whole), there is still more demand than
available air freight capacity due to the shortage of bellyhold space.”

Market-share growth
Indeed, QR Cargo’s market share has grown since the start of the pandemic due to the increase in demand for freighter aircraft capacity, further consolidating its position as a key player in the global air freight market.

“We maintained our freighter operations from day one and did not let down any of our customers,” Halleux says. “Qatar Airways made a conscious
decision to continue to maintain our freighter network, sometimes at a loss. Continuity of freighter services network was important to us because it has a different pattern to that of bellyhold demand.

“Qatar Airways Cargo’s market share has increased since the pandemic began and currently stands at 8.1%. We would like to grow even more and one issue around that is the slight delay to our new B777 freighter deliveries; we are expecting three B777Fs this year and two more in 2021.

“In any case, I am confident that Qatar Airways Cargo will continue to have the right capacity in place to meet the demands of our customers and the market going forward.”