Emirates Skycargo Executive Discusses Solutions to Industry’s Challenges

Addressing a forum of top air cargo executives at the VII Air Cargo Americas International Congress and Exhibition 2003 last month, Emirates’ Senior Vice President Cargo, Ram Menen, built the case for greater interdependence and partnerships between air carriers and land transport suppliers for the agility required by volatile, fast-changing markets.

He also announced that Emirates SkyCargo will be adding one more weekly service from New York to Dubai via Gothenburg. The additional flight will start on 27 November, increasing Emirates’ cargo frequency to and from New York to twice weekly.

Mr Menen said: “Our new JFK route has exceeded our most optimistic assumptions. We started the service in mid-September and customer response has been such that 10 weeks later, we are doubling our offer. This also provides more opportunities for continued development of our relationships with our American partners.”

Speaking in Miami, home to the foremost air cargo airport in the United States, Mr Menen declared that those companies that expect to grow in the ever-changing global economy are not only going to have to work closely with their partners but "need to bring their back offices into the 21st century."

He added: “Conditions that have harassed worldwide cargo, including the decelerated U.S. economy, have exposed the vulnerability of companies with deep inefficiencies and weak business cases. Through the second quarter of 2003, a weak dollar coupled with slow recovery in vendor and consumer confidence, as well as a lag in inventory replacement, pressured air carriers to reduce frequencies and distribution capacity.

“But this is bound to reverse direction as soon as the U.S., the world’s largest consumer market, stages its expected recovery from the third quarter and fuels growth in the rest of the world.”

According to Mr Menen, the business models best suited to swiftly adjust distribution capacity and frequencies in the face of shifting world markets are those with built-in agility via a distribution network made up of a diverse range of partners, linking air, sea, railroad and trucking entities.

He explained that this multi-modal supply chain model favours a lateral distribution of resources and risk across all units on the network. As a laterally-oriented model, it brings the advantage of combined resources for greater economies of scope, scalable distribution capacities for optimisation of resources, and the ability to rationalise increasing costs (such as anti-terrorism/security-related expenditures) across the network.

At the fast-growing Emirates SkyCargo, long-term relationships with different entities on the supply chain are supported by Information Technology to integrate the free flow of information and leverage it for the seamless physical movement of goods. Mercator, Emirates’ IT division, is developing a new generation of cargo and logistics products to vastly improve everything from ground handling to booking and capacity management.

Additionally, technologies like RFID (Radio Frequency ID) and GPS (Global Positioning System) will soon be used throughout the network to create further efficiencies in tracking and tracing individual pieces of shipments.

According to Mr Menen, the key to multi-modal partnerships is a commitment to efficiency at every unit in the network. He said: “By using the bellies of our wide-bodied passenger aircraft as Emirates’ core means of cargo transportation, our airline has been less sensitive to directional imbalances and able to provide a high level of service consistency to its partners and customers.”

With capacity for 13 to 15 tonnes of cargo, plus a full passenger load, Emirates’ smallest wide-bodied aircraft can carry more cargo than a Boeing 737 freighter. For high-density trade routes such as Hong Kong, Bangkok, Singapore, Frankfurt, Dusseldorf, Istanbul, Amman, Chennai and Dhaka, Emirates supplements capacity with three Boeing 747 cargo-only freighters.