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Loads of potential

Posted 18 July 2018 · Add Comment

Tom Pleasant finds out why Dennis Lister, Emirates SkyCargo’s VP cargo commercial development, is optimistic about prospects for the future.

Emirates SkyCargo has been the region’s leader in air freight for years. However, a global slump in demand and neighbouring airlines’ rapid growth in the field has affected the division’s results. Cargo tonnage was 2.5 million in 2017, down slightly from 2.6 million the year before.
Nonetheless, Dennis Lister, vice president cargo commercial development, is optimistic. “Last year was very interesting for us,” he said. “After what had been a few challenging years for cargo, we saw an important resurgence in demand for capacity starting towards the end of 2016 and continuing all the way through 2017, which resulted in improving yields. We expect demand to be strong in 2018.”
As competition from other Arabic airlines increases, Emirates has started a programme of investment and partnerships that it hopes will keep it ahead of the pack. Notably, it signed a memorandum of understanding (MoU) with Luxembourg’s all-freighter carrier, Cargolux; an unlikely collaboration that Lister says is “working well”.
“We announced the start of the operational partnership in May last year and followed it up with the cargo codeshare announcement in October. It’s a unique deal within the industry: you have two industry leaders in air cargo working together in a win-win scenario. We have access to Cargolux’s 747-freighter capacity and Cargolux has access to [the belly capacity] on our global, high-frequency passenger network.”
It’s also a less capital-intense way to have freighter capacity, considering Emirates, like many carriers around the world, had to shrink its freighter fleet in January this year.
It returned its two 747-400ERFs to Belgium’s ASL Airlines, leaving it without a nose-loading freighter, a vital design type for a lot of over-size cargo.
That leaves the division with 13 777Fs leased from Dubai Aerospace Enterprise. These continue to be deployed to the main hubs, such as Amsterdam and Kenya, but now include less usual destinations, such as Maastricht (the Netherlands).
“We did a lot of groundwork and research before we launched our freighter services to Maastricht,” explained Lister. “We wanted to develop a secondary cargo footprint close to Amsterdam to diversify and build up our base in the region. So far, demand has been good. It’s still early days, but we’ll keep monitoring market conditions and adjust our offerings accordingly.”
Other new destinations for cargo, whether via freighter or belly, include Newark (US), Phnom Penh (Cambodia), Santiago (Chile), Stansted (UK) and Zagreb (Croatia).
As well as partnerships and changes to its fleet, Emirates has also initiated a comprehensive range of investments in specialised air cargo products.
For example, transportation of pharmaceuticals is a growing segment, one that is high-value and low in weight. But each consignment is incredibly susceptible to fluctuations in environmental conditions. Leave a ULD container on the tarmac for a minute too long and a consignment of vital anti-cancer medicine, worth $1,000s per unit, is suddenly worthless.
Lister says Emirates has introduced blankets, dollies and dedicated transit corridors at key stations across the network. “We started off with our pharma product – Emirates Pharma – and since its launch we’ve seen volumes grow by about 38%,” said Lister.
Other vertical-specific products include Emirates Fresh for moving perishables and Emirates Wheels for moving high-value automobiles.
“We’ve seen good growth in the uptake for these products as customers are now quite specific about how they’d like their cargo transported,” Lister added.
Like all carriers, the division is looking at how to better handle e-commerce shipments for the ever-growing trend of online shopping. So far, most carriers haven’t been able to provide the kind of service the likes of Amazon and Ali Baba want. That’s driven Amazon to launch its own freighter fleet – Prime Air – that will reach 40 by the end of 2018 and, it’s rumoured, up to 100 by 2023. Like everyone else, Emirates hopes to grab some of that market share.
“The time has come to offer more than just raw capacity between airports,” said Lister, “which is what is happening in the industry currently. We’d like to combine the network and frequency strengths of Emirates SkyCargo to offer something along the lines of a ‘flying fulfilment centre’ for e-tailers. It’s still early stages but this is a focus area for us.”
 

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