We’re very proud to reconnect our global network to one of Asia’s most vibrant economic powerhouses,” said Oliver Evans, chief cargo officer. “Like Switzerland, Singapore is known for its quality, reliability and productivity. And our customers on this new route can be sure of receiving all the tailor-made airfreight solutions and high-grade service that they have come to expect from Swiss WorldCargo.”
Cargo ex-Singapore will consist primarily of electronics, perishables such as live fish, valuables and pharmaceutical products and related specialised equipment, said Evans. Cargo inbound to Singapore will be a broad mix he added, with one key traffic flow consisting of Swiss watches. It may seem like a small commodity, but Evans notes that “Singapore is a distribution centre for a number of countries in the region and it tends to be a market segment that is of particular importance to us.”
He notes that growth in Swiss watch demand to Asia was close to 30 per cent in 2011 and again in 2012. The first quarter of 2013 however, saw one of the largest markets in Asia – China – drop by 30 per cent because of Chinese government moves to curtail what it sees as excessive luxury consumerism. “So that’s slowed the industry down for the short term, we don’t know whether that will continue or not, but from our perspective China is just one market, Indonesia and other markets are continuing to see strong growth in this sector.”
Ongoing cargo growth
Swiss WorldCargo has been in the enviable position of experiencing growth in its cargo traffic with nearly 10 per cent growth last year, continuing on through the first quarter this year, said Evans, despite what he adds is a market characterised by stable or slight growth, but substantial capacity growth as a result of the influx of widebody passenger aircraft into the market.
“We do it by this focus on market segments where we believe we bring value and those are market segments that are growing significantly,” he said pointing to growth in the mail business as a result of growing Internet shopping along with growth in the valuables market, electronics and pharmaceuticals. “The valuables market is quite healthy, especially during an economic crisis you see a lot of banks making movements of commodities and bank notes around the world and the pharmaceutical industry is one that is continuing to enjoy high growth. And those are healthy markets and they happen to be the ones we focus on – it’s very much our strategy,” said Evans.
“We make no secret of our strategy because we believe communication is one of our weapons in the marketplace. We communicate what we deliver to the market and of course our relative success is well known.” But with shrinking cargo volumes across the global marketplace many carriers have also turned to specialist product offerings in a bid to offset slack volumes with high-yield cargo.
“If you look around the global market, most airlines have a range of products in the shop window whch they didn’t have five, let alone 10 years ago. The number of people who are offering their products in the shop window has increased tremendously, but the very interesting thing for us is that when we look and analyse our markets, which we do all the time, we see that the major competitors are the same that we had 10 years ago. There’s only a handful of companies that really compete effectively in that space and the others may have a product on the shelf but they don’t have market knowledge and depth of experience that is required to respond to a customers needs.
“It is a very competitive market, but whether its half a dozen competitors or 30, it makes no difference to us because we have to compete effectively.” He adds that customers in this high-end cargo segment tend to have strong loyalty because of the strict supply chain requirements that often involves certification along the whole chain.
“Once they certify a lane and are confident that the combination of the freight forwarder and the airline can delivery the service that the shipper needs, they tend to stick to that solution and that leads to a more symbiotic relationship between shipper, forwarder and airline,” Evans said. And of course the increasing global security requirements play right into that solution.
“It’s basically a unique customer service that we are giving, its not just the products that we sell, but the whole experience the customer gets, be it the flexibility, the quality or other unique selling points of the Swiss WorldCargo brand,” added Ashwin Bhat, VP area management cargo for the Americas, Middle East and Asia.
Going forward, Evans noted it is unlikely there would be any new longhaul route announcements until at least 2014 and with an order for six B777- 300ERs set for delivery from 2016 that will likely define future network changes. The B777s will replace the older A340- 300s both for economic and capacity reasons. The cargo division is clearly looking forward to this as Evans notes it will substantially boost belly cargo capacity to nearly 25 tonnes as well as lessen the payload restrictions during the winter season.
