With 300 destinations across 120 countries, Air France KLM Martinair Cargo (AFKLMP) operates one of the most extensive flight networks in the world. Alongside an expansive network, as an experienced carrier, AFKLMP Cargo understands the importance of working to tailor services to the specific logistical needs of their customers.
With hubs at Paris Charles de Gaulle (CDG) and Amsterdam Airport Schiphol (AMS), AFKLMP offers two prime locations in Europe to connect customers to the destinations their network, combined with strong partnerships, serves globally, whether what needs to be handled is general or specialised cargo. Through these sites and the combination of full freighter aircraft, prepared to move a variety of cargo, with belly capacity on their fleet of long and medium haul aircraft, AFKLMP guarantees widespread and reliable coverage, ensuring seamless connections and extensive shipping solutions.
Overcoming international hurdles
Unfortunately, as is the case for the entire airfreight sector, and other industries around the globe, AFKLMP has been impacted by the economic slowdown that has been seen since Q4 2022. The situation has been driven by changes in distribution strategies that resulted in higher inventory levels, affecting historical distribution patterns. Additionally, geopolitical events in Ukraine and consequent inflation and interest rate increases have also impacted demand.
The ramp-up of China, after a long period of Covid-19 restrictions, is relatively slow as well. These factors have resulted in an overall decrease in demand compared to last year. At this stage AFKLMP does see global impact. Although, there are still a few regions like Africa and specific commodities where we still see relatively positive developments.
“Our product mix helps mitigate supply and demand changes. Based on market intelligence and customer feedback, we expect that demand will show a more positive dynamic in the fourth quarter of this year. Therefore, it’s essential to stay close to our customers, be agile, and continuously adapt to market dynamics,” GertJan Roelands, AFKLMP’s Senior Vice President Commercial, said.
“We are observing various supply and demand dynamics driven by factors such as the geopolitical situation, high inflation in some parts of the world affecting consumer demand, high inventory levels, and slow production ramp-up in China after lifting most of the covid restrictions. However, we also see some positive indications of increased demand from Summer towards Q4. Additionally, segments such as Pharma and Healthcare and the Perishable industry continue to perform strongly, making them crucial parts of AFKLMP’s overall mix. Given the market’s relative uncertainty, it’s crucial for us to remain agile and maintain close customer relationships.”
Bolstering their offering
With the global economic situation presenting unavoidable challenges for companies, it has never been more important for carriers to ensure the services they provide are top tier. That’s why AFKLMP has been placing a clear emphasis on specialised products that demand extra attention and a high level of expertise.
AFKLMP’s Product & Verticals organisation consists of dedicated teams covering specific products, such as pharma, fresh, express and more. These teams work diligently to enhance their offerings and meet the expectations of their customers, recognising that continuous dialogue with clients, forwarders, shippers and key stakeholders in the supply chain is crucial to understand their needs and co-create products.
“We have identified five key products within our Verticals division: Fresh, Pharma, Express, Live, and Secure. For Fresh and Pharma, we have further subdivided them into four segments based on the required temperature range, including an option for active temperature control,” Roeland explained.
In addition to these five main products, AFKLMP also has other offerings available for niche markets, such as Art, Aircraft on Ground (AOG), Big, and Wheels, among others. Another crucially growing sector is dangerous goods, which can be booked as general cargo or combined with the carrier’s existing product range.
Overall, AFKLMP provides more than 52 combinations of products to best suit the unique needs of our customers. This work to ensure that they are prepared for every eventuality is reflected in the latest step taken to boost their pharma service at CDG. To accommodate future growth in the pharma segment, AFKLMP has constructed two new cool rooms in its CDG hub specifically designed for pharmaceuticals, with a capacity to hold 128 pallets. These investments are part of AFKLMP’s cool chain strategy which is beneficial for both their perishable and pharma & healthcare service proposition.
“In line with our commitment to continuous improvement, we are investing not only in our facilities but also in our people and digital capabilities to enhance our pharmaceutical offering. We recognise the importance of meeting evolving customer expectations and are dedicated to keeping pace with industry advancements. Additionally, we plan to expand our palletised cool storage facilities by the end of the year, which will benefit both pharmaceuticals and perishables,” Roelands stated.
Improving efficiency
With carriers under external pressures, it has become fundamental for them to adopt available technological solutions to improve efficiency and provide a better services to customers. This is visible in how AFKLMP has recently implemented the modules of a new cargo operations system.
This builds on the backbone IT system that was implemented six years ago for the commercial aspect of the AFKLMP cargo operation, which enabled the carrier to expedite the development of its digital offering and sophisticated pricing and revenue management systems and tools.
“Currently, we are in the process of implementing the operational component of the backbone IT system, replacing outdated legacy systems. This will serve as the new foundation, allowing us to further accelerate and develop new digital operational solutions. Additionally, it will facilitate full alignment and data exchange between the commercial and operational facets of the business, which will enhance overall quality. We have high expectations for this critical development and implementation,” Roelands added.
Looking forward
While the future is unpredictable, AFKLMP sees a variety of opportunities for those in the logistics sector. This is particularly visible in the company’s aforementioned investments in digital technology, which are paying off as they observe a convergence of business-to-consumer (B2C) and business-to-business (B2B) demands.
Customers expect the same ease of booking airfreight as they would for an airline ticket or e-commerce purchase. This trend has only been amplified by the pandemic, and AFKLMP now generate over 72% of their sales through online channels.
“Soon, we plan to introduce a unique service in the industry that will allow customers to book and manage allocations in myCargo. Our digital offerings have enabled us to gain a competitive edge by providing better customer service and reducing time-to-market for our clients,” Roelands said.
“Also our most recent cooperation with CMA CGM Air Cargo (CCAC), which we started as from 1st April, allows us to offer a better product for our customers. We are now able to also offer extensive freighter services into Asia (Hong Kong, Shanghai, Guangzhou) and just recently we also added Mumbai freighter flights with a stop in Abu Dhabi. The cooperation allows us to complement our overall network and specifically our full freighter footprint. This also will give the possibility to offer our customers more charter and special cargo possibilities (e.g. cars, horses, oil & gas etc).”
“Moreover, we see continuous growth in segments such as Pharma and Perishables. Our investments in cool chain infrastructure and specialised pharma services have positioned us to benefit from these opportunities.”
“We are committed to continuously improving our operational services with a focus on excellence. This encompasses various actions such as process optimisation, compliance, and infrastructure enhancements. Digitalisation plays a significant role in achieving this objective. We prioritise operational excellence for both our hubs and outstations and rely on close collaboration with our suppliers and handlers to achieve our goals.”
“Also our focus on sustainability is a key pillar in our overall strategy. We recently announced the replacement of our full freighters by the A350F. These newest aircraft have 40% less CO2 emission and will realise a 50% reduction in noise compared to our current 747’s. On top of this we keep on enhancing our Sustainable Aviation Fuel propositions (both online and offline) and many more initiatives are on the planning. “
“All of the above actions are in line with our recently introduced vision: ‘to become a leader in sustainable airfreight, while passionately delivering best-in- class customer experiences.”
