African carriers embark on an intensive rush into the air cargo sector

By The East African

The battle for airfreight market share between African airlines is heating up, thanks to Covid-19 disruptions which have sent ocean freight rates soaring. Many airlines are now upgrading their fleets and expanding their destinations as the region’s container shortage continues to loom.

In its latest market summary, the International Air Transport Association (IATA) said demand for air cargo remained above pre-crisis levels.

“African airlines saw their international cargo volumes increase by 26.7% at the end of last year, the largest increase of any region. International capacity was 9.4% above pre-crisis levels, Africa is the only region in positive territory, albeit on small volumes,” reads IATA’s market summary.

Cost-competitiveness

East Africa Shippers Council chief executive Gilbert Lagat said that apart from cost and efficiency, the time to receive shipments has boosted air freight business given the delays persistent on roads and oceans.

“Importers consider time, cost and efficiency. If the shipment arrives on time at a moderate cost, importers will consider and with increasing trade barriers at borders, air freight is the best bet,” Mr. Lagat said.

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IATA Director General Willie Walsh said data indicates that the cost competitiveness of air cargo versus container shipping has improved in recent months.

“Improving competitiveness against sea transport should continue to make air cargo a bright spot for airlines as passenger demand struggles with continued border closures and travel restrictions,” Walsh said. .

Kenya Airways and Ethiopian Airlines have already developed strategies to take advantage of their respective airports investing in cargo segments.

Earlier this month, cargo operations from Kisumu International Airport in Kenya were officially launched, opening up new markets for farmers in international markets.

Kenya Airways (KQ) chief executive Allan Kivaluka said the airline will provide a capacity of six tonnes of cargo per day from the region to the UK.

“KQ has a strategy to venture more into cargo freight and we are committed to introducing full freighter to Kisumu once the region is able to produce more freight,” Kivaluka said.

He added, “KQ plays a key role in supporting business efficiency by connecting the fresh produce industry in this region to the rest of the world.”

Kisumu International Airport has expanded its cargo handling and cold storage facilities in hopes that the airport will be able to handle more cargo from the region. The cold storage facility will go a long way in enabling the airport to establish a fully-fledged cargo division.

To improve air cargo efficiency, Ethiopian airline Cargo and Logistics Services has added an online cargo booking platform while continuing to expand its digital offering. The new platform allows customers to check flight schedules, space availability, cargo loadability and make reservations in real time.

Adding value

The company also launched a mobile app offering real-time shipment updates and allowing users to check flight schedules, submit requests, receive notifications when shipment is ready, book flights charters and track shipments.

Ethiopian Airlines CEO Tewolde GebreMariam said he is committed to starting the long journey of removing paper from the entire air cargo process by digitizing the logistics value chain.

“Removing paper from the logistics value chain is not only a convenient and hassle-free service for customers, but it also delivers more efficient operational excellence and achieves long-term sustainability goals,” Gebremariam said.

The airline’s online booking platform will be crucial in giving customers and direct freight forwarders reliable access to cargo capacity inventory.

“Strong demand for air cargo is helping Ethiopian Airlines to boost its capacity and profits. We are currently operating close to 70% of our pre-pandemic capacity,” he added.

Air freight market rates have increased due to the growth of e-commerce and increased demand for air freight due to shipping delays.

Ethiopian has invested heavily in infrastructure, equipment, personnel, system and processes to improve its pharmaceutical processing capabilities.

The cold storage areas of these freight facilities are dedicated to the handling of pharmaceutical and healthcare products and equipped with dedicated climate control between -30 degrees Celsius and +25 degrees Celsius.

These facilities are monitored by an intelligent web-based system that allows real-time management of all areas and is capable of triggering SMS, phone calls and email actions in case of emergency.

The strategic and geographical location of Ethiopian’s home airport in Addis Ababa makes it preferable for transporting highly temperature-sensitive products with year-round natural temperature stability of between +15 degrees Celsius and +25 degrees Celsius, which will play an important role in minimizing potential temperature deviation throughout the value chain.

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