Sky’s the limit for air cargo

See­ing a huge po­ten­tial in the In­dian air cargo mar­ket, Mar­cel de Nooi­jer, EVP - Cargo & Man­ag­ing Di­rec­tor Marti­nair Holland, Air France KLM, talks about trends, op­por­tu­ni­ties and the air­line’s fu­ture plans in a tête-à-tête.

Cargo Talk - - Interview -

Can you en­lighten on the cur­rent sce­nario of the air cargo mar­ket?

The air cargo mar­ket is def­i­nitely grow­ing but is volatile also. De­spite Europe and the US be­ing the im­por­tant mar­kets, the con­sumer de­mand is see­ing a surge in the emerg­ing mar­kets too. This had a pos­i­tive ef­fect on air freight. Se­condly, air freight plays a key role in the process of trade growth through global sourc­ing and global con­sump­tion. We have seen a strong de­vel­op­ment that has gained mo­men­tum slowly, par­tic­u­larly in In­dia, like that in e-re­tail and phar­ma­ceu­ti­cals. Clearly, In­dia plays a key role for air cargo. The coun­try is gain­ing a hold in phar­ma­ceu­ti­cals, given the time-sen­si­tive na­ture. These are the pos­i­tive driv­ers. Fluc­tu­at­ing eco­nomic growth, in­creas­ing trade bar­ri­ers are few stim­u­lat­ing fac­tors of the air cargo mar­ket. Since Europe re­mains a con­sumer mar­ket, the Asian coun­tries par­tic­u­larly In­dia, had a slower GDP growth this year, than be­fore. I can as­sure a sig­nif­i­cant growth rate of six to seven per cent this year. Be­ing a Euro­pean player, we fore­see main growth out­side Europe. From the mone­tary per­spec­tive, in­ter­est rates round the globe are rel­a­tively low. This re­duces the cost of in­ven­tory, which can stim­u­late a modal shift to sea and rail. Sub­se­quently, there are some changes in the pro­duc­tion method such as more local for local, minia­tur­i­sa­tion and 3D print­ing; that has strong im­pact on de­mand. Another im­por­tant con­cern at global level is the ca­pac­ity in the air freight in­dus­try. New play­ers give two di­men­sions, first - play­ers hav­ing in­creased ca­pac­ity and sec­ond - pas­sen­ger air­crafts of­fer­ing much more belly ca­pac­ity. The ca­pac­ity has gone much higher than traf­fic which has made the in­dus­try lit­tle un­co­or­di­nated at a global level.

Which ver­ti­cal is Air France KLM presently fo­cus­ing on?

Equa­tion and Pharma. We have heav­ily in­vested in CEIV pharma cer­ti­fi­ca­tion. This helps the in­dus­try to as­sure that things are be­ing dealt op­ti­mally. The sec­tor com­mits to reg­u­la­tion and qual­ity. We will keep on ex­pand­ing pharma mar­ket as it of­fers more choice and con­trol and im­proves e-tool­ing. Com­ing to Equa­tion, cross­bor­der e-com­merce sales is ex­pected to grow by 192 per cent as of 2018 (from 105$bln to 307$bln). We have made an in­vest­ment of US $14 mil­lion in the Equa­tion prod­uct. The fa­cil­ity will be op­er­a­tional by Au­gust 2017. This will de­velop busi­ness with in­te­gra­tors and couri­ers and will se­cure e-com­merce re­lated busi­ness.

Can you elab­o­rate your fu­ture plans?

The Air­line’s cargo is in the shape for fu­ture with con­tin­u­ously grow­ing belly ca­pac­ity. We are re­duc­ing freighter foot­print by strength­en­ing part­ner­ship and al­liances with other air­lines. We are in al­liance with Delta Cargo, Kenya Air­ways Cargo, China South­ern Cargo and Skyteam Cargo in or­der to tap di­verse mar­kets. Nat­u­rally we would like to strengthen our co­op­er­a­tion with Jet Air­ways fur­ther.

Please en­lighten on your global net­work.

The air­line of­fers belly, combi and/or full freighter cargo ca­pac­ity. This fleet is de­ployed on routes world­wide, op­ti­mally util­is­ing our net­work, as well as spe­cific routes and en­abling us to pro­vide best op­tions for any type of ship­ment. With a fleet of 174 air­crafts, we of­fer 1,045 weekly ser­vices to 127 des­ti­na­tions world­wide.

How is tech­nol­ogy help­ing the air cargo in­dus­try to im­prove?

Dig­i­tal­i­sa­tion fa­cil­i­tates the trans­for­ma­tion in the value chain. Be­ing a key en­abler for cargo strat­egy, dig­i­tal­i­sa­tion de­vel­ops most easy, simple and re­li­able ser­vices for cus­tomers and em­ploy­ees, lead­ing to sim­pli­fi­ca­tion and ef­fi­ciency. There are cus­tomers who have more needs to full­fil, es­pe­cially in the do­main of trans­parency and ease of do­ing busi­ness. Easy to con­nect re­quires dig­i­til­i­sa­tion of pro­cesses and de­vel­op­ment of both in­ter­nal and ex­ter­nal in­ter­faces. Hence, front and back of­fice pro­cesses should im­prove the qual­ity of­fered. We at AFKLM are pi­o­neer­ing with ‘My Cargo’ our per­son­alised dig­i­tal shop which is easy, trans­par­ent and proac­tive. It gives ro­bust prod­uct of­fer­ing with the right prod­uct port­fo­lio, high per­for­mance and trans­parency.

We have heav­ily in­vested in CEIV pharma cer­ti­fi­ca­tion. This helps the in­dus­try to as­sure that things are be­ing dealt op­ti­mally

Mar­cel de Nooi­jer EVP - Cargo & Man­ag­ing Di­rec­tor Marti­nair Holland, Air France KLM

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