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East meets West: Finnair Cargo becomes player in global air freight market

Finnair Cargo

With a rapidly growing route network in the Europe–Asia market, Finnair Cargo is a growing player in global air freight. We speak with Fredrik Wildtgrube, head of global sales at Finnair Cargo, to get more insight into the carrier’s strategy for success.

Finnish flag carrier Finnair has enjoyed significant growth in recent years, with one example being 2017 when the airline recorded the fastest growth period ever in the carrier’s 94-year history. The airline’s investments in new state of the art facilities and cutting edge technology within the air cargo sector have certainly been positive factors for this growth.

Just some of the new developments for Finnair Cargo, (the airline’s cargo business,) include the carrier who opened its new COOL Nordic Cargo Hub in 2018 for full operations, and the airline is also capitalising on the latest technology and automation and investing heavily in technological innovations such as Cargo Eye, the Internet of Things’ monitoring system that provides real-time data to the control centre in Helsinki which displays where every truck, aircraft and shipment is, in addition to arrival times and connecting transport.

Finnair Cargo has also been turning to Robotic Process Automation to address the issues of administrative costs, delivery delays and lost cargo due to misassigned Special Handling Codes.

Europe–Asia market

Finland’s capital city Helsinki is perfectly located as a gateway between Europe and Asia, making it an important hub for air cargo traffic between the two regions. Finnair Cargo, with its cargo hub in Helsinki Airport, is certainly a well-established operator on this market.

According to the airline, Asia contributes about 75 per cent of Finnair Cargo’s revenue, with China being one of its most important destinations globally. Finnair serves seven destinations in China, including Beijing, Shanghai, Nanjing, Chongqing, Guangzhou, Xi ́an and Hong Kong in Greater China, and in summer 2019 operated up to 42 weekly frequencies to China from Helsinki.

Finnair Cargo
Finnair Cargo

Last October, the airline celebrated 15 years of direct flights to Shanghai and, in April, the carrier announced it is extending its highly-popular seasonal service to Guangzhou in China to offer flights throughout the year instead of providing flights just twice a week during the winter season.

The carrier operates this route with its new state-of-the art Airbus A350 aircraft, adding extra cargo capacity. “Finnair’s Europe-Asia strategy is well known and it is built on short journey times between the continents thanks to Helsinki’s unique geographical position.

These days, we’re very proud of our Helsinki gateway between West and East in part thanks to our striking new cargo terminal called COOL which opened last year to enormous international interest,” says Fredrik Wildtgrube, head of global sales at Finnair Cargo.

“China is being driven by Beijing and Shanghai in both directions with steady and consistent performance. Last year, Shanghai was one of the top three performers in Finnair Cargo’s network. In 2018 we reported that after the Airbus A350-900 was added to the Helsinki–Shanghai route in 2015, fuel consumption fell 24 per cent, while cargo capacity grew 20 per cent and revenue by 30 per cent.”

Commenting on how the increased frequencies to Guangzhou (CAN) are performing when it comes to transporting cargo, Wildtgrube says: “We have always had strong support from our CAN station and that’s important because we receive high demand; it’s a very busy location for air cargo and the route is performing very well.”

“Obviously, I’m very happy to see our CAN route on an A350 and now also year-round, with two weekly frequencies from winter this year. The year-round nature allows consistency and greater capacity for our customers and strengthens our relationships in the region.”

For summer 2019, Finnair Cargo also increased its Hong Kong service to twice daily, totalling 14 frequencies a week, up from ten weekly flights during the 2018 summer season, and 12 weekly flights during winter 2018/19. In addition, Xi’an (XIY) returned in summer 2019 with three weekly frequencies.

Finnair A350 cargo and passenger plane
The A350 has allowed a better mix of cargo and passengers

“The previous addition to the China market was our Nanjing station which opened in May 2018, and we’ve seen quite a commanding performance,” Wildtgrube states.

Touching on the airline’s route network when it comes to Japan, Wildtgrube says that the airline’s Japanese destinations have traditionally also performed very well, with Japan having a total of 34 weekly frequencies this summer; Tokyo Narita with double daily flights, Nagoya which has daily flights, Osaka’s Kansai International Airport with 10 flights per week and Fukuoka Airport which has three flights per week.

“Some of the seasonal routes across our network (holiday destinations) require more work and „ solution thinking, but given this year’s performance we are quite satisfied,” Wildtgrube continues.

Of course, the Asia market isn’t the only region Finnair Cargo is operating in, with the United States being one of the important markets for the carrier.

In March this year, the airline launched a new direct route to Los Angeles with three weekly frequencies which is operated with Finnair’s next-generation Airbus A350 aircraft with a payload for cargo stated by the carrier to be around 20,000kg.

In the US, Finnair’s other destinations include New York, Chicago, Miami and San Francisco. “During recent years we have also been getting consistent demand and cargo flows from our North America stations and in our latest performance reports for April and May, we’re reporting that our strong performance is being driven by the United States, along with Norway, Hong Kong and Southeast Asia,” Wildtgrube says.

Evolving to meet demand

Explaining how the bellyhold capacity of Finnair’s fleet is meeting market expectations and demand, Fredrik Wildtgrube says the airline’s customers have been very impressed with the added capacity of the new aircraft and in addition, the sustainability aspect has surprised many of them very positively.

Fredrik Wildtgrube, head of global sales at Finnair Cargo
Finnair’s Europe-Asia strategy is well known says Wildtgrube

“We have recorded a 25 per cent reduction in carbon dioxide footprint which is a significant asset to our customers’ sustainability balance sheet. As a company, the A350 has allowed us to better mix cargo and passengers and I would say things are better than we expected. We are very happy with our new aircraft and are excited to see the fleet grow even further. By 2020, the expansion of the A350 fleet will provide double the capacity on Finnair’s long haul flights,” he states.

Moving on to talk about Finnair Cargo’s key markets for pharma and seafood cargo, Wildtgrube says that the main markets for seafood and pharma for the airline are broadly the same: Japan, Thailand, Singapore and China, and that Belgium and India are also very important from a pharma perspective.

“We provide significant value in both segments to support these critical, valuable and vulnerable products, in other words network, infrastructure in terms of facilities and data accuracy, and speed. We are happy with our focus areas and the value we offer to the market. That said, we are continuously looking at new ways to offer improved value to our customers, supporting our already existing product.”

The air cargo industry is investing increasingly in new initiatives when it comes to pharma and Finnair Cargo is no exception. Wildtgrube explains that Finnair was the first airline in the world to be awarded the IATA Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) certification.

He says that that IATA, in conjunction with Brussels Airport where Finnair Cargo also has a hub, created The Centre of Excellence for Independent Validators in Pharmaceutical Logistics to achieve a high standard of pharmaceutical handling across the entire supply chain.

The certification ensures the airline follows a set of standards for the carriage and storage of medicines, addressing the pharma industry’s need for more safety, security, compliance and efficiency.

To prevent temperature excursions during transportation, Finnair Cargo has a controlled space dedicated to the transfer of temperature-sensitive pharma products from trucks into the airline’s COOL cargo terminal at Helsinki Airport. The products then move from its Pharma acceptance area into the large dedicated 3,000m2 pharma-only storage area in the terminal.

Finnair cargo
Finnair is a growing player in the cargo market

The medicines and drugs will the go through acceptance checks and a security line and are then ready to be flown all over the world.

Strategy for success

Regarding Finnair Cargo’s plans to develop its cargo strategy in the next 12 months, Wildtgrube says: “Our strategy is very clear. Finnair Cargo has always been a carrier focused on quality and reliability of service.

We will be strengthening our quality this year and improving the transparency we provide our customers, which includes proactiveness and added responsiveness. We are also offering new ways for customers to book with us, for example through – a new high-profile spot booking platform making waves this year.

“On top of this, the head of global sales position has been moved from Helsinki to Shanghai, so that’s where I have lived since the start of 2019. We are spreading our leadership team more efficiently across our network, rather than locating everyone at our headquarters in Finland, because we believe that work is not tied to a place or a location, it’s more connected to time – delivery on time.

This is what customers expect from us, that’s what we expect from our teams. I’m discovering better ways to differentiate our service to meet with rapidly changing customer demands and with my move we are rubber stamping our commitment to China and growth in Asia, which is worth some 75 per cent of revenue for us.”

Wildtgrube says that back home, the busy carrier is working on quicker connections to ensure cargo flows even faster. “This is not easy, but Helsinki has a huge advantage because it is an uncongested airport and we have one of the most modern terminals in air cargo.

For us this is a great asset and it is supported with an excellent network, processes and a technically advanced mindset. We continuously revisit processes to iron out any slack or idling.

The main priority is to increase speed while not compromising our quality and service reliability. Data and technological advancements are enabling this to happen. Air cargo has been under cost pressure since the 1980s, and it has worked because it has become cheaper. We are on a mission to make it better.”

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