By Nikolay Glushnev, General Director, AirBridgeCargo
AirBridgeCargo is a Russian cargo carrier and has been a Cargo iQ member since 2007.
In this Member Spotlight, Nikolay Glushnev, General Director at AirBridgeCargo talks about why the airline joined Cargo iQ and the benefits of membership, as well as the main challenges and opportunities facing the industry right now.
Why and when did you join Cargo iQ?
AirBridgeCargo (ABC) Airlines has been an active member of Cargo iQ since 2007, supporting its initiatives and working under quality improvement of the air cargo industry together with the other 80+ members of Cargo iQ. In April 2016, following a two-day audit, the company was issued the Cargo iQ certificate after it successfully passed the audit procedures for compliance with the International Air Transport Association’s Cargo iQ quality standards. The document was presented during the session of Cargo iQ Technical Group in Essen, Germany, on 19th April. This year ABC successfully passed the second audit, reconfirming its compliance with Cargo iQ quality standards.
The main reasons that ABC became a Cargo iQ member was to harmonize the standards within the supply chain, to be able to speak one language with all supply chain stakeholders, and to confirm our high-quality standards. Basically, Cargo iQ serves as an entrance ticket to validate our high-level of quality performance.
How does being a Cargo iQ member help your business?
Cargo iQ’s mission of creating and implementing quality standards for the air freight industry echoes our aim to constantly improve our quality services. Compliance with Cargo iQ standards serves as proof for other supply chain stakeholders that our company is a reliable partner in air freight transportation.
Cargo iQ also provides the possibility to network with major customers, understand their requirements, and tailor our products and services according to their needs, bringing maximum benefit to their business, as well as ours.
What are the main challenges in air cargo right now? What are the main opportunities?
The air cargo industry is in turbulent times right now, with a downward trend, which is caused by many factors and presents a number of challenges for the market players, among them being:
- a decrease of traffic on some trade lanes which forces market players to seek for other city-pairs (or rather airport pairs) with stable growth;
- the emerging trade protection trend hinders the world economy’s development, which influences freight traffic between certain counties and regions;
- the relocation of production facilities from China to other South East Asian countries (Vietnam, Bangladesh, Cambodia). On the one hand, this stimulates expansion of new markets and network, but on the other hand, it presents a challenge for cargo carriers as some airports simply lack sufficient infrastructure ready to handle major cargo volumes, including special commodities;
- a regional disbalance that has been leveling out lately stimulated by emerging demand for ‘Made in Europe’ consumer goods from Chinese middle-class consumers. However, from the cargo perspective, we are talking mainly about an airport-to-airport disbalance since, as a carrier, we have to manage load and capacity issues on a daily basis. From our side, we have adhered to a well-balanced approach toward network management (connections region-region, trucking cargo to local destinations);
- the strengthening of indirect competition with active development of the Belt and Road initiative. Today, some logistics providers guarantee 10 to 15 days railroad delivery from China to Europe, which is cheaper than airfreight and faster than automotive transportation. Some shipments and commodity types might shift to this delivery option however, the volumes are not big enough yet;
- the expansion of global e-tailers and their entrance to the air freight market, such as Amazon, will tighten the competitive landscape, although to a major extent only for e-commerce business. Global cargo carriers are aimed at leveraging not only emerging e-commerce volumes, but at all special cargoes;
- the introduction of strict requirements for transportation of special cargoes from the customers’ side and regulatory authorities of certain countries to enhance service quality. This stimulates carriers to invest in personnel, training, and dedicated equipment, as well as fosters effective collaborations with like-minded partners and supply industry stakeholders;
- a high demand for the digitalization of services with customer experience similar to the business-to-consumer sector, such as real-time data 24/7, prompt response to all the requests, taking immediate corrective actions within the shortest timeframes, and the introduction of sophisticated IT solutions.
Despite all the challenges of today, air cargo carriers have many opportunities for further development. For example, niche markets that have not previously considered air freight transportation (pharmaceutical products, dangerous goods, food, etc.) and consider today’s turbulent times as a starting point for further growth.
What developments are taking place at AirBridgeCargo?
For the last 12 months we have been working on the improvement of our quality performance, an expansion of the network, and the development of specialist products and services for dedicated commodities in line with the customers’ needs. This has resulted in a 2 per cent increase of our volumes in 2018. Q1 has been less favorable so far and we demonstrated a slight decrease which echoes market situation and sentiments.
Network-wise, we have increased the number of frequencies to and from Asia, introduced Shenzhen, Dhaka, Ho Chi Minh City, and we are aiming at strengthening our partnerships with airports. This is supported by a signed MoU with Leipzig and Liege for the further development of cargo infrastructure in the airports, and our intention is to use them as regional hubs.
With quality being of paramount importance, we were delighted to re-confirm our Cargo iQ certificate which reflects our commitment to high-quality services and embraces not only services for general cargo, but for special commodities as well. The re-certification process included a lot of preliminary work and cooperation with our ground handling partners.
We have been working on the development and reinforcement of our specialty services and strengthening our internal processes and our dedicated teams of experts. To follow the needs of various customers, we have significantly extended the options for the lease of cold-chain containers and we are partnering with SkyCell and Sonoco manufacturers. On top of this, we understand that transparency and accuracy of shipment data is now expected, and we offer data loggers that can be authorized to go with the shipment.
The same aim is pursued through cooperation with Unilode Aviation Solutions and the introduction of digitized containers equipped with a Transmitting Portable Electronic Device (TPED). This helps us to generate real-time data across parameters such as temperature, humidity, shock and light.
And, most importantly, we will continue collaborating with our customers and partners on the educational side of the process, organizing joint workshops, regular meetings to share updates, news of the industry, and upcoming trends.
To find out more about AirBridgeCargo, visit airbridgecargo.com
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