The Kingdom’s Efficient Air Freighter: Saudia Cargo
Vibha Mehta discusses the extensive spectrum of cargo services provided by Saudia Cargo with Marwan Niazi, Vice President of Commercial…
- How has the supply chain demand increased from the pre-Covid era?
When the COVID-19 pandemic was declared in March 2020, the global capacity was around 1 million Tons/Day and constantly fluctuated with certain periods hitting as low as the 0.5Million Ton/day up until January 2022. From then onwards we began seeing a slow but steady growth reaching 0.75Million Tons/day towards the end of January 2023. The demand also fluctuated in the same manner, mostly remaining overall positive until March 2021 when it stabilized, and we saw a consistent growth towards the end of 2022. We did expect a decline in 2023, and as per our expectations we are now seeing demand decrease due to several reasons of a geopolitical, commercial, and operational nature. However, despite this, inventory levels are currently higher than they were in 2022 and we believe that demand will pick up and increase again in the second half of 2023.
- Can you please walk us through the services you offer?
We offer a number of services that meet consumer demands and we consistently explore various means to add to our offering based on consumer trends. Our most notable services include:
- Sky team network.
- Secured cold chain for temperature-controlled cargo.
- Trucking services across the network.
- Specialized live animal transport (such as horses).
- Special customized solution charter
- How are logistics companies using Saudia Cargo services?
Saudia Cargo offers logistics companies several benefits as well as strengthens their positioning in the industry through its services. These benefits include a strategic customer centric approach, high-tech automation, innovative digitalization, asset optimization, and a focus on the human factor. As such, logistics companies can benefit from Saudia Cargo services through reliable and fast delivery, cost-effective transportation, customized solutions, technology-enabled tracking and management, and enhanced security. These factors enable logistics companies to streamline their businesses towards being more dependable and reliable in addition to receiving support from Saudia Cargo’s high calibre team of professionals.
- What are the core pillars for your fleet management?
Fleet planning is a fundamental part of airline operations that requires thorough consideration and design. Having the right mix of fleet is key to the success of an airline. Other factors are:
- Placing the right aircraft for a specified route.
- Having a mix of owned and leased fleet to cater to seasonality.
- Integrating a route-based model.
- Can you tell us more about the software which several aeronautical operators use?
We use an advanced system for our network design which takes into consideration both operational and commercial aspects. Results are based on various aspects such as revenue maximization, cost minimization, profitability, and others. Scenario building cases are performed for evaluation of a network and how to further improve it.
In terms of the impact of route expansion or reduction on the network, these software tools play a critical role in ensuring that flights are scheduled and managed efficiently. When an airline expands its route network, it must ensure that it has the necessary resources to operate those additional flights, including aircraft, crew, and ground support. The systems can help the airline plan and manage these resources to ensure that flights are operated safely and efficiently. On the other hand, when an airline reduces its route network, it must make adjustments to its resources and operations to ensure that it is still able to provide service to its remaining destinations. Specific systems can help the airline make these adjustments and optimize its operations to maximize efficiency.
All in all, software tools used by aeronautical operators are critical for safe and efficient operation of air transportation, and they play a vital role in managing the impact of route expansion or reduction on the network.
- How does fuel pricing and volatile markets due to uncertain events play a crucial role in your operations?
Fuel is the highest cost head for any airline, and it severely impacts the profitability of the routes. Cargo businesses are very dynamic, and airlines need to be too agile to react to changes in volatile markets.
- According to you, how will the air cargo industry will be shaping in the region?
First, we must admit that regionally and globally the COVID-19 pandemic accelerated pre-existing issues in the supply chain and brought to light priorities such as visibility, resilience, and digitization to the top supply chain priorities. The pandemic changed consumer behaviours and triggered a long-term rigorous growth in E-commerce. The region in general and Saudi Arabia specifically is seeing the development of a large number of mega projects which will create more growth in the industry and lead to its transformation.
- Is Saudia Cargo incorporating automation in its operations? Can you talk more about it?
Saudia Cargo prides itself on always being ahead of the curve particularly with innovation and technology. We have incorporated automation into our operations in the following ways:
- Tracking of ULD’s globally is now 90% inaugurated and will rise to 95-97% by the end of 2023.
- Fully automated MHS in KSA covering both imports and exports.
- VNA storage racking system partly implemented in KSA.
- Full scale use of HHT for tracking ‘real time data’ in KSA.
- Full automation MHS system in progress for handling of Transfer cargo.
- Separate PIL and PER facilities inaugurated throughout KSA with semi-automated functionality.
- Detailed and controlled data capture of all FSU messages from GSA’s, trucking companies as well as GHA’s in progress.
- What are the plans for Saudia Cargo in the future?
Saudia Cargo has made great strides in the industry and in positioning the Kingdom of Saudia Arabia and a leading air cargo hub. We aim to continue our success and build on it to transform the Kingdom’s logistics industry in alignment with the Saudi Vision 2030. Our plans include:
- Expanding our fleet.
- Widening our network.
- Increasing our focus on automation, digitalization, and sustainability.
- Increasing the capacity of our teams through specialized training initiatives and programs.
- Redefining and raising the Cargo industry’s capabilities and standards.
- Delivering industry leading services to our valuable consumers and partners.