Focus on right product mix
At the third edition of Air Cargo Africa, held recently in Johannesburg, Pradeep Kumar, senior vice president cargo revenue optimisation and systems for Emirates, spoke to Namrata More on the key aspects shaping the airline’s operations in Africa.
Could you tell us about your increasing focus on the African air cargo market? Africa is a key part of our growth strategy. And over the last five to seven years, we have included more and more destinations in Africa. Right now we fly to 24 points within Africa. All the flights that we have are wide-body fleet with multiple departures, which is beneficial to the customers because of the distribution and quality of service that we provide. Africa continues to be a growing market. The governments are spending money to upgrade the infrastructure including the road network and the airports, which is very important for distribution.
What is your focus on the oil and gas industry in Africa? Oil prices over the last six to seven years were continuously above $100 per barrel. That has put a lot of constraint on manufacturing, cost of production and transportation and the overall supply chain. So with the change in oil price, it gives a new momentum for manufacturing. Recently, there were also a lot of talks of modal shift because of the cost of air freight and the distribution. And what we look at is that air freight will continue to grow.
Has the downturn in the oil and gas industry impacted your business? Oil and gas is of course very vital for the product mix in the industry. But what we have seen is that there has been an immediate movement from Asia to Middle East and Africa. We are seeing momentum in traffic with many commodities like industrialised manufacturing goods, pharmaceuticals from India, or from China to Africa, and from Europe including machinery especially for South Africa. We see lot of automobile companies like Mercedes and Ford, Volkswagen that have set up their manufacturing plants here. For them, distribution is easier now with more capacity being inducted in these markets.
Emirates SkyCargo was the first carrier to implement Electronic-Air Waybill (e-AWB) shipments under the industry’s ratified multilateral e-AWB standard. What has been your focus on Africa in this regard? We are in the forefront of using automation and e-commerce as a medium to obtain cost efficiency, and provide the customer an uninterrupted supply chain opportunity. And we have tried in many places across the globe, and specifically to Africa. We were one of the first airlines to introduce e-freight and the e-AWB opportunity. The multilateral agreement helps us to include more and more forwarders, and we are doing really well from South Africa specifically, and many other points in Africa are being targeted. We believe, we need to take more leadership to educate the people, as most of them don’t exactly know what is e-freight and e-AWB. With support from IATA locally and along with other stakeholders like airport authorities, and customs, we can try to drive this change to happen.
What is Emirates’ focus on other areas? A key air freight area, as far as Emirates is concerned, is the automobiles. When economy of a country does well, you can immediately see that consumer’s buying power goes up. People can then buy automobiles of their choice and that is the area we look at. Other vertical, like pharma, is also a huge market where everyone is focusing. And the growth area for that is of course India, which has been playing a key role. There are also a lot of movement to and from Europe into the US and Latin America.