As Covid-19 continues to bring challenges to cargo carriers worldwide, Melissa Moody explores how Volga-Dnepr Group has maintained its position in an industry struggling to stay flying.
With over 30 years’ experience in the air cargo industry behind it, Volga-Dnepr group is no stranger to challenging situations. The year 2020, however, has been a whole new ball game for the group and its three airlines, Volga-Dnepr, AirBridgeCargo and ATRAN.
“The biggest challenge of the pandemic was to operate as many flights as possible, delivering essential cargo under new strict biosafety conditions,” says Volga‑Dnepr Group’s chief commercial officer, Konstantin Vekshin.
“Amid growing demand for air cargo transportation caused by countries’ lockdowns and the grounding of passenger fleet, air cargo carriers – Volga-Dnepr among them – were on the frontline to leverage the emerging Covid-19 cargos worldwide,” notes Vekshin.
As part of its frontline work, the Ulyanovsk, Russia-based airline saw a “huge increase” in pharmaceutical and health care shipments, as well as live animal and ecommerce consignments. “For the first eight months of 2020, the group has achieved in excess of a 120 per cent increase in pharmaceutical shipments, a surge of almost 300 per cent in ecommerce and more than 20 per cent growth in live animal transportation,” comments Vekshin.
From January to June, Volga-Dnepr’s freighters delivered over 25,000 tonnes of PPE, medical beds and mattresses and artificial lung ventilation apparatus, as well as oversized and heavy sterilisation vehicles worldwide. Industry-wise, it has also seen an increase of more than double in its oil and gas operations, as well as humanitarian sectors.
“Although the pandemic definitely played its part, most of the growth can be attributed to a thorough development of our dedicated services throughout all our years of operation to guarantee safe, reliable and stable transportation of cargo,” continues Vekshin.
Even with countries closing borders and passenger aircraft grounded across the globe, Volga-Dnepr managed to keep its aircraft and staff going with investment in strict cleanliness measures. This included strict disinfection of cargo and aircraft, personal protective equipment for all front-line personnel, regular medical checks and Covid-19 testing.
“By introducing special measures, which require additional investment, we guarantee that Volga-Dnepr not only combats the pandemic spread through its services to deliver much-needed cargo, but also eliminates the risk of the virus spreading through its own personnel,” affirms Vekshin.
Focus on charter
As part of its adjustment for the sharp uptake in demand, the company’s three airlines have started to provide more charter options and introduce long-term charter programmes to shift the massive volumes of cargo being moved, allowing customers greater customisation as to when the shipments arrive and which destinations they fly to. During the pandemic’s peak, the group re-focused from scheduled flights to charter operations, allowing it to work more in line with international restrictions.
“We needed to adjust our cargo operations and re-focus from scheduled to charter operations in order to guarantee the stability of cargo flow. We still operated to major cargo hubs, such as the likes of Madrid, Frankfurt, Paris and Shanghai, as they were the main facilitators for PPE distribution worldwide,” explains Vekshin.
The group’s diverse fleet allowed the airlines to operate the new long-term charters with relative ease as the fleet consists of various freighters capable of transporting different loads. Super-heavy cargo can be accommodated on board a 124‑100/150 and Il‑76TD‑90VD, express shipments on its Boeing 737 and special cargos – including temperature-sensitive, dangerous, time-sensitive and valuable – on its Boeing 747-8F, 777F and 400ERF.
As part of the group’s adjustments, it also introduced another Boeing 777F to its fleet as part of its subsidiary, AirBridgeCargo, to boost the total available capacity. This aircraft was one of the first to take part in a long-term charter operation with a delivery of 719 elite breeding pigs transported from Moscow’s Sheremetyevo International Airport to Vladivostok.
It is the first flight in a series of 17 that will continue until spring next year in an effort to facilitate the development of the Far East agriculture sector and the group hopes it will turn out to be the first of many such arrangements.
The work that Volga-Dnepr Group put into its capacity, disinfection and charter processes during the pandemic paid off, yielding a reported 40 per cent increase in revenue for the first six months of the year. Vekshin attributes it to the group’s unique position of being a cargo carrier first and not just the cargo division of a larger passenger airline.
“It has been a tough year, with demand slowly sliding amid decreasing yields offered by passenger airlines for belly cargo. With almost the whole passenger fleet grounded and the breakdown of traditional supply chains, air cargo carriers have experienced unprecedented demand and a lot of pressure, as we had to keep delivering goods under the constraints of a ‘new normal’ and strict biosafety measures,” Vekshin comments.
Volga-Dnepr holds its experience and qualifications in high regard, ensuring its staff are trained for whatever the next shipment may bring. “Within the Volga-Dnepr Group, we have a team of experienced and qualified specialists who participate in industry courses, attend regular interval training assessments and are devoted to continuous lifetime learning to guarantee service excellence.”
This preparation includes extensive geographical coverage, with a network of regional offices where specialists combine local knowledge with a global vision.
“For example, by operating on the historically important trans-Siberian trade route for such a long time, Volga‑Dnepr has gained the required expertise, competence and in-depth understanding that allows it to hold its own among major market players and even dominate in some destinations,” asserts Vekshin.
The airline’s flexibility also allowed it to adapt to this year’s rapidly changing environment. “We had the ability to leverage regional outbursts, where rapid changes in demand were met in terms of capacity and personnel availability,” recalls Vekshin.
The situation forced the group to reconfigure its network strategy and move its hub of operations from Moscow to Krasnoyarsk to avoid changing crew. When the pandemic began, its carriers were expected to guarantee capacity first to China, then from China and other Asian countries to Europe and later to the Americas, in addition to taking extra measures to keep cargo and staff safe.
For the group, its priority was making sure that it could still operate given all the different restrictions in countries across the world. “We needed to make sure that global cargo flows, including vital life-saving products, remained uninterrupted,” remarks Vekshin.
He continues: “Carriers had to negotiate quarantine and sanitation measures for personnel, which included cancellation of 14-day quarantine for crew upon arrival in another Covid-19 country, availability of PPE for all staff and disinfection of cargo and aircraft.”
One of the group’s biggest innovations has been its Cargo Supermarket concept, offering a ‘one stop shop’ experience to customers. Any of the three airlines’ customers can request a cargo shipment via email or a sales representative and receive the most cost-effective logistics solutions. The consignment can either be scheduled or chartered on board a certain type of freighter ideal for transporting specialised cargo and organised in a very short period of time.
To make it a full service, the airlines also complement air freight services with engineering and logistics consulting, covering multi-modal delivery, customs clearance, warehouse management and the design and manufacturing of special loading equipment, in addition to other key logistical components.
“This is a very competitive advantage given that in today’s fast-paced world, customers value time and the ability to save it,” maintains Vekshin. “Avoiding multiple forms of communication through emails, online booking forms and telephone calls is something that our customers appreciate.”
Recovery will take time
Vekshin believes the sector will weather the storm; the key will be for operators to learn to adapt their services like Volga-Dnepr has done. “Most likely, recovery will be L-shaped, with mini peaks, but a total return to pre‑Covid levels will only be seen by 2023 or 2024,” he observes.
The growth the company witnessed at the start of 2020 is expected to continue throughout the peak season, with holidays such as Thanksgiving and Christmas keeping demand high. The peak season is also forecast to extend through to January 2021 as lockdowns are reimposed for a second wave of the virus.
“Over the next year we predict we will still see growing demand for healthcare shipments for some areas, plus vaccines, essential equipment and components, as well as ecommerce, as consumers change their buying behaviour and mindset,” remarks the Volga-Dnepr executive.
Vekshin adds that the group is preparing for Covid-related vaccine shipments, expected to commence at some point during 2021.
“We aim to meet the market challenges with our capable fleet of freighters, qualified personnel and high-quality services. We will try to leverage demand via our 360-degree product offering, covering scheduled cargo operations, charter cargo and long-term charter programmes,” concludes Vekshin.
Read more insight and features in the latest issue of Airline Cargo Management.