Nabil Sultan, senior vice president for cargo at Emirates, talks to Will Waters about some of the new opportunities emerging thanks to continuing expansion of e-commerce and digitalisation – including more potential direct shipper customers
As the wildly volatile Covid pandemic period for air freight companies and customers begins to normalise, carriers have continued to push forward with initiatives to build and better use the capacity, networks and infrastructure that have been so highly valued and exploited during these extraordinary recent times.
The acceleration of digitalisation and cross-border e-commerce during the last two to three years have already begun to provide new tools and opportunities and promise further benefits. But there are also plenty more-traditional methods available to combination and bellyhold carriers as they emerge from this highly challenging phase, such as exploring synergies through partnerships with other airlines and expanding their freighter fleets through new aircraft orders and passenger aircraft conversions, as recent developments at Emirates SkyCargo highlight.
Although regional rival Qatar Airways may have leapfrogged Emirates in the last few years to become the world’s biggest international air cargo carrier, recent moves by Emirates underline its ambitions to remain one of the biggest and most-important global players.
For example, in November, Emirates announced a firm order for five new Boeing 777-200LR freighter aircraft, with two units to be delivered in 2024 and the remaining three units in 2025, to join its current fleet of 11 B777 freighters. And after successfully complementing the carrier’s Boeing 777 freighters during the height of the pandemic by using the airline’s B777 underutilised passenger aircraft as ‘mini-freighter’ aircraft, plans are also underway to fully convert 10 passenger 777s into freighters, boosting its cargo fleet to over 25 aircraft by the end of 2026.
United partnership
Meanwhile, in September Emirates signed an MoU to explore and further develop synergies with United Cargo. That follows on from a major agreement between the two airlines’ respective passenger businesses.
Nabil Sultan, senior vice president for cargo at Emirates, explains to CAAS: “We believe that the United network, and our network, are complementary and there could be some very interesting opportunities for both of us, with our reach into the Middle East, Africa, Asia, Indian subcontinent, and them being one of the largest cargo airlines in the Americas.” Subject to the approval of the relevant competition authorities “we’re going to work with United to see how we can provide a better product offering for both our customers.”
He adds: “Of course, we have been working with United even before this, using normal interline agreements, block space agreements between us, wherever things make commercial sense. This is taking the relationship one step further.”
WebCargo channel
Emirates SkyCargo also revealed in September that it has been working with WebCargo by Freightos, the industry’s largest air cargo booking platform, to add a new channel for customers to directly access and book capacity on its flights. In its latest move “to develop and implement digital technologies that enable us to improve our operations at the backend and enhance our customer experience at the frontline”, it said customers will “have quick and easy direct access” to the cargo airline’s flights and inventory to make direct bookings.
Sultan says there’s “a huge benefit” in terms of customers having “access to all our content – as opposed to a customer calling us to book a space or enquiring about our rate”. WebCargo Air already provides live air cargo rate distribution and bookings to more than 3,500 freight forwarders across more than 10,000 offices, with over 30 airlines supporting instant price quotes and digital booking, allowing freight forwarders to access dynamic capacity, pricing, and e-booking.
By the end of October, Emirates SkyCargo’s inventory on the WebCargo platform becomes available to customers across Europe, followed by Australia and the United States in November, and customers in Asia and Africa will have access by January 2023. Forwarders not yet using WebCargo can register for a free account.
CargoWise access
Last September, Emirates SkyCargo linked up with WiseTech Global to provide direct access to its flights and inventory through the CargoWise platform that has become the most popular transport management solution (TMS) among major freight forwarders – allowing CargoWise users access to Emirates SkyCargo’s flight schedules, rates, availability and real-time e-booking functions, after completing a short registration process.
Explaining the difference between the WebCargo partnership and the CargoWise tie-up, Sultan says “the CargoWise platform is more the TMS, the operating system of the forwarder. CargoWise is an end-to-end solution, so it’s not just the air e-booking component, which is what WebCargo is. So, both systems will coexist and a forwarder will make a certain portion of their booking within the CargoWise system, whether that be first-mile; last-mile; and they may, obviously, do some internal forwarder-related activities. And then the e-booking component of that is where they can jump on to the WebCargo to access the capacity from Emirates.”
Marketplace benefit
Although customers can place a booking through either channel, “CargoWise is not a marketplace; WebCargo is a marketplace. So, via CargoWise, they can make a booking, but they can’t do a search from point A to point B and get a list of 10 airlines and all the results. That’s what they can do on WebCargo. So, the difference is the marketplace element.”
Like other air cargo carriers, Emirates is open to working with any of the major platforms and booking channels favoured by significant numbers of its existing and potential customer base.
Sultan comments: “This is an area we’ve always looked at, to become easy to do business with. I think the industry is falling behind in terms of introducing technology to address the needs for the whole supply chain and logistics.”
He says the pandemic “has pushed the envelope a bit” in terms of its progress on digitalisation, encouraging the sector “to make sure it expedites most of these initiatives to ensure that things move in a much more seamless way”. At the same time, the industry “has seen the massive rise in demand during the pandemic, which awakened everyone to say: ‘It’s time to move into an e-freight environment’ – it’s no longer possible for a human to check every step of the way using Excel, and so forth. It’s about using the technology to digitalise most of things, to ensure things are moving seamlessly – without having a big pouch with every single shipment that moves across the world.”
Faster pace of digitalisation
Sultan continues: “So, you’re probably going to see a faster pace of digitalisation, as we move forward. I think it’s been adopted by the industry. There’s some work that needs to be done in that area – mostly related to how governments will be able to standardise a lot of the documentation processes to ensure that it’s much easier to export and import goods into countries. And I think that’s going to be an essential move. But I think the recognition is there, by the industry, and by governments, to move in that direction.”
Although it has often been a slow process bringing together all the various relevant authorities and interests and parties, Sultan is optimistic, noting that “ICAO and IATA have taken various initiatives in that regards, to push the agenda, and make sure that there’s a much larger understanding around the world for moving goods”.
Online bookings for end customers
In terms of the next stages of the digitalisation journey, Sultan says the company has “an evolving set of initiatives”, adding: “We’re looking at even online booking now for (end) customers and small businesses – that should be able to go in and book a shipment that they want to send or import from their production market or a manufacturer. So, why not look at some of those concepts and make it much easier for the SMEs and other sorts of industrial manufacturers who wish to book (direct) online?”
He continues: “So, these are probably some of the things that the industry is going to move toward, to make the business much more seamless – probably to transform a lot of carriers, operators, into doing business in a much more conducive manner.”
Emirates Delivers model
Emirates already operates one end-to-end product, Emirates Delivers, an e-commerce shipping solution that is targeted both at individual customers as well as small businesses, for deliveries from the US into the UAE. Emirates says it is “an open e-commerce fulfilment platform that can also be used by other e-commerce businesses and logistics integrators”.
So, are there any plans to replicate that in other markets?
Sultan explains that Emirates Delivers is a kind of B2B or B2C product that it currently operates out of the USA, for shipments to Dubai, for customers in Dubai. “It has worked very well,” he notes. “The fact that we have a large number of our flights into the US, spread across the Americas, allows for much faster transportation of any shipments to Dubai.
Dimensional shifts
“With our frequencies that we have into some of the major cities in the US and the type of capacity we offer, we’ve been able to deliver shipments almost within two days, directly from the customer in the US to Dubai. This includes the last-mile delivery. So it’s quite interesting. These are some of the dimensional shifts that you’re probably going to see as we move forward.”
Moving more towards direct bookings from manufacturers or other shippers, including offering an end-to-end service, does require airlines to develop some different capabilities, but these are not insurmountable challenges, Sultan believes, for carriers that have valuable parts of the supply chain already in place.
Extensive network and infrastructure
“We have a network that is robust, we have a massive infrastructure in Dubai, that has very unique capability,” he notes. “We have the reach, we have the frequency, we have the capacity, because most of our (passenger) aircraft we operate are good capacity – 18 to 20 tonnes per flight
“With that kind of capability and our ability to transit more than 80 million passengers every year through our network, why couldn’t we do that with packages? We’ve seen how the e-commerce industry has expanded or exploded over the pandemic, and I think that’s an industry that’s probably going to continue to grow, probably double-digit every year. Therefore, there’s going to be enough business out there, for those who are going to be ready to deal with. So, that’s an area that we’re going to be looking at very seriously.”
Virtual integrator
Tech providers such as CargoFlash have been promoting the idea of creating the ‘virtual integrator’ for airlines in order to be able to manage some of those kinds of capabilities. Are those sorts of partnerships with tech providers of interest?
Sultan responds: “We have invested in the assets; we have the infrastructure; and therefore building the ancillaries – last-mile delivery, first-mile pickup, the sorting capability – around the assets that we have are things that are not impossible to achieve. And with today’s technology, and our sort of capabilities – and you’re talking about last-mile delivery with with drones now – and all of that is coming to flourish. I think it would be a huge missed opportunity, if nothing is done about that.”
And might it offer potentially higher margins, if carriers extend further into the value chain?
“Obviously there are opportunities; and I think it is probably a much better margin than what we do today. But it also has a higher cost, so, that would also need to be put in perspective to ensure that you displace what you do today with better revenue… it’s a tough business.”
A different shape
In the past there have been sensitivities and reported resistance from freight forwarders towards airlines attempting to dealing direct with shippers. But Sultan does not see it as a zero-sum game.
“To me, the freight forwarder community has a major role to play in all of this,” he notes. “But I think the freight forwarder community will also have to evolve, as the whole industry is, and come up with different types of propositions and offers in today’s market.
“I am sure today that a lot of the manufacturers still want the services of the freight forwarder community; there’s no way that they can operate without having someone to clear their shipments,” he highlights. “It’s a massive task. And I think they’ve still got a substantial role to play; but now is the time to evolve, in line with the whole industry, to take a different direction.”
Sultan acknowledges that this is a sensitive topic, but he believes that it’s necessary to have those kinds of discussions; “time to push those messages”.
