An airline, a ground handling company and one of China’s largest eCommerce players have created a tripartite working arrangement that is claimed is a “testament to progress” and the changing nature of e-Commerce shipments between China and Western Europe.
Senior executives from Saudia Cargo, Worldwide Flight Services (WFS) and Cainiao Network, the logistics arm of Alibaba Group, presented the new working arrangements to the local and international logistics and shipping press and other stakeholders at a signing event in Jeddah, Kingdom of Saudi Arabia last month. The duration of the relationship was not revealed.
Teddy Zebitz, Saudia Cargo CEO, John Batten, Worldwide Flight Services EMEAA CEO and Eric Xu, vice-president Cainiao Network signed the collaboration that will function at Liege airport in Belgium. The new arrangements are set to come into force in March 1, 2024.
This collaboration, which was described as a “strategic collaboration connecting East and West”, will be based on a Hong Kong, Saudi Arabia and Liege ‘triangle’ of operations.
Zebitz spoke first to the assembled attendees, introducing the other two speakers on the stage, before enthusiastically introducing the idea of the collaboration. He said: “As this unfolds, we see much opportunity unfolding. E-Commerce is very important to us and I consider this is a significant milestone.”
He went on to describe how he was confident that this will become a new benchmark for e-Commerce activity on a global scale.
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Long-standing relationships
The success of 2021’s co-operation agreement with Cainiao Network has enabled Saudia Cargo to achieve significant growth in e-Commerce shipments. The agreement creates a thriving ‘sky bridge’ between Asia and Europe, allowing Saudia Cargo to benefit from the opportunities arising from the growing global e-Commerce market. Cainiao joined Saudia Cargo’s flight programme in March 2021, linking Hong Kong SAR to Liege Belgium, via Saudia Cargo’s Riyadh hub. The freighter flight enables Riyadh to become the model of an effective distribution hub in the Middle East thanks to the strong partnerships that the company has forged with local players.
The move also builds on long-standing relationships between the carrier and WFS and Cainiao and could not come at a better time for the three organisations. Firstly, Saudia Arabian exports are on the rise, up 8% this last year to some €450 billion. Then there is the beginning of the fruits of the Saudi Arabian Vision 2030 programme. This will see an increased number of routes from Saudi Arabia to China and Asia established, extending and benefitting the airline’s Asian reach and naturally creating much tonnage that will flow into the Belgian gateway and out to consignees around the continent.
In summing up the airline’s hopes and expectations from the arrangement, Zebitz looked to creating a new business model for the future of e-Commerce logistics that will be a benchmark for future activity.
Next to take to the podium was Eric Xu, vice-president of Cainiao Network. He started by describing the agreement as a “new beginning” that was clearly “uniting East and West.”
The move will impact on China’s e-Commerce eco-system and help ensure Cainiao Network is the world’s premier e-Commerce platform and operation.
He traced Cainiao’s relationship in partnership with Saudia back to 2021, acknowledging he now considered them one of the world’s leading air cargo businesses.
Riyadh’s e-Commerce business
Cargo shipments supporting e-Commerce are very significant to Saudia Cargo. To demonstrate this is the fact that over 50% of Riyadh’s e-Commerce traffic is carried by the airline. Given this significance, this move comes as no surprise to John Batten, Worldwide Flight Services EMEAA CEO. Indeed the very concept that was being announced, the joint collaboration between three very different arms of air cargo, would have been just a pipe dream when he started in airfreight in 1975 he declared.
In fact, he added his career commenced with TNT, the express delivery firm which itself was considered an innovative disruptor at the time. Now he is witnessing another kind of disrupting as he acknowledged Saudia Cargo’s role in the agreement.
“Airlines are now part of the solution,” he said. “I congratulate Saudia and Cainiao Network on bringing a new perspective to airfreight.”
In Liege WFS, now a member of the SATS Group and the world’s largest cargo handler, operates 25,000 sq m of warehouse space, split over two facilities, and handles approximately 200,000 tonnes of cargo annually.
Saudia Cargo’s fleet consists of seven Boeing aircraft made up of four 777Fs and three 747-400Fs. The cargo arm of the Saudi Arabian flag carrier dates back to 1949 when the airline bought five Bristol freighters, each of which offered just seven tonnes of payload. In the 1970s, the airline started all-freight services to Europe and acquired its first B747-200F. In 1979, it carried 61,000 tonnes of cargo. The company now carries a six-figure volume of freight in both belly-hold and maindeck moves.
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Vision 2030
Since the initiation of Vision 2030, Saudi Arabia has established a robust groundwork through the implementation of unprecedented reforms across the public sector, the economy and society at large. Despite encountering challenges, the country has garnered invaluable experiences, fortifying its determination to realise the objectives. Its endeavours have resulted in heightened government efficiency, the emergence of fresh growth and investment prospects, increased global involvement and an elevated quality of life for citizens. These accomplishments are shared by all the people of the nation.
This mission will be accomplished by cultivating a conducive environment for both local and foreign investments and by unlocking new sectors through the initiatives of the Public Investment Fund.
