Air Cargo Customer Experience: Cathay Pacific, Emirates, Southwest shine during a difficult 2020

A look back at air cargo operations in 2020 shows how quickly the industry can adjust to the unexpected — or the seemingly impossible. When airlines desperate to move in-demand personal protective equipment and other vital cargo began operating passenger aircraft — without the passengers — solely to transport cargo, many industry figures were skeptical that these flights would last. Shortly thereafter, when some airlines went so far as to remove economy seats from their widebody jets, more eyebrows were raised. However, the expectation that cargo-only flights with passenger aircraft will continue to meet rising customer demand is now the norm, a different norm than ever seen before 2020. This year’s reporting of the results from our annual Air Cargo Excellence survey also looks quite different than in previous years. Since launching in 2005, the Air Cargo Excellence Awards have invited airlines and freight forwarders to evaluate airports and cargo carriers across a range of metrics including customer service, performance, value and facilities. The awards are typically an opportunity to look back at the previous year and recognize members of our industry who have excelled in their cargo operations. To maintain a high standard for the awards, Air Cargo World applies several scoring metrics to the survey responses to ensure awards are given based on a statistically valid sample. Despite the challenges of 2020, many carriers still achieved high customer satisfaction marks from survey respondents. Due to the volatility and turnover in the aviation industry during 2020 and internal changes in the survey, the airport responses did not reach that bar, unfortunately. We have therefore opted not to distribute ACE Awards in 2021. However, the survey did return a statistically valid sample for air cargo carriers, with many respondents providing detailed feedback for their most frequently utilized carrier partners. So, this year’s feature on the Air Cargo Customer Experience will highlight the top-scoring carriers in the Asia-Pacific, EMEA and Americas regions, with important takeaways for how the industry can better serve the needs of freight forwarders and shippers. Outstanding carriers of 2020 In looking at the top performers by region, we have identified three combination carriers whose overall performance during 2020 stood out for high quality in the niches the respective airlines have carved for themselves: Cathay Pacific Cargo in the Asia-Pacific region; Emirates SkyCargo in the Europe, Middle East and Africa (EMEA) region; and Southwest Cargo in the Americas. Cathay Pacific Cargo Hong Kong-based Cathay Pacific was the top scorer across all regions for several metrics, including “main-deck capacity,” “space,” “network” and “specialty cargo.” Its highest scores were for specialty cargo and its network, with a 4.8 for each. All results are scored out of 5.0 points. Cathay's high network rating aligns with the demand trends of the past year. The carrier operated many of its cargo flights in a very valuable niche during 2020, providing trans-Pacific capacity that has been in extremely high demand due to Asia’s place as a production powerhouse and many difficulties in ocean shipping. Cathay was also a top carrier for cargo-only flights operated with passenger aircraft during 2020, which explains its high ratings for main-deck capacity and space of 4.5 and 4.7, respectively. Air Cargo World research placed the carrier at No. 4 globally for the number of pax freighter flights flown from March through August 2020, with a total of 5,500. In the Asia-Pacific region, only Japan Airlines operated more than that. Cathay and its Cathay Dragon subsidiary were also among the first airlines to use passenger freighters, operating A330-300s to some destinations in China beginning in March 2020. Cathay has since used A330s, A350s and 777-300ERs as passenger freighters, while also operating its fleet of 747 freighters. Cathay Pacific also removed seats on some of its 777 passenger freighters to accommodate more cargo on those flights. Like most combination carriers during the past year, Cathay placed a heightened emphasis on cargo during 2020. Cathay Pacific had restructured its management in 2017, and at the time did away with the role of cargo director, and combined the role with the commercial director role, filled by current Chief Customer and Commercial Officer Ronald Lam, in an effort to align its cargo and passenger businesses more closely. In August 2020, Cathay Pacific restored its director of cargo position and appointed Tom Owen, formerly director of people, to that role as of September. Shortly after taking the helm at the airline’s cargo division, Owen said in a Cathay-published interview that the airline plans to prioritize digitalization and automation. “We are keen to support IATA’s One Record and to pursue our own goals around automation,” said Owen. “Digitization is a massive area of focus given the opportunity to make better-informed decisions when data is easily accessible and relatable.” Of the carrier's 2020 performance, Owen told Air Cargo World that the operating environment was "more challenging than ever," but the Cathay team was able to adapt to uphold its service standards. "We maintained our extensive freighter network and expanded overall lift capacity with thousands of cargo-only passenger operations, at a time when supply chains were challenged," he said. Emirates SkyCargo Dubai-based Emirates SkyCargo ranked highly for its “timeliness,” “network,” “e-air waybill capabilities” and “tracking,” receiving a score of 4.7 for all metrics. While the carrier did not achieve perfect or nearly perfect scores in any metric, it was a solid performer overall, which speaks to a substantial long-term investment in its cargo operations. “I think it came off in early thinking in Emirates that people can actually fly direct, so why fly to Dubai with Emirates SkyCargo?” Henrik Ambak, senior vice president, cargo operations worldwide, told Air Cargo World . “The company started as a very small operator in an established world, so it took something to make people want to fly their cargo through somewhere and not just fly direct. I think they chose clearly from the beginning to say reliability has to be the hallmark of what we are doing.” Emirates closely monitors its performance metrics, tracking them electronically, meeting on a daily and weekly basis, and producing detailed reports monthly, Ambak said. That contributes to a very high service level — of the shipments on one day in early May, only 1.18% did not meet the agreed terms, he said. Ambak also addressed the low "rates" scores airline customers assigned most carriers for 2020. “Supply and demand will define what people are willing to pay,” he explained. “That's one thing. They don't have to pay — of course not.” However, the same high rates that freight forwarders take issue with support the extensive network that Emirates scored highly on, thanks to its deployment of a vast scheduled passenger-freighter network during the pandemic. “A 777 that only moves cargo but is a passenger aircraft is much more expensive to operate per kilo of cargo moved than a 777 freighter,” Ambak said. “On a 777 freighter, you will get 100 tonnes. On a 777 passenger aircraft with seat loading, on a good day, you’ll get 50 to 55 tonnes.” To maintain the lower pre-COVID rates, “you will not see any passenger aircraft fly cargo-only, because that would be superiorly loss-making.” Regarding the remainder of 2021 and planning a longer-term strategy, Emirates has acknowledged 2020 as a “master class in ‘everything is possible,’” Ambak said, while “the impossible takes two and a half months.” “If, before COVID, you had gone into somebody in a serious conversation and said, ‘I want to take the economy seats out of the aircraft and use it for cargo loading,’ you would have probably gotten an instant referral to a psychologist, followed by your termination notice,” he pointed out. “COVID came and it took us two and a half months from idea until we had the first flight.” “When have you ever seen anything in this industry happen with that speed?” Ambak said. “What I'm taking out of this is that agility is the key ... One of the things we think is, at the moment, most important for us is the short-term change capability without short selling, so that people can trust us.” Southwest Cargo Dallas-headquartered Southwest Cargo is by far the smallest of the high-scoring carriers, but stands out for its unique network design with redundant flight frequencies that make it well-suited for domestic cargo operations. Southwest scored a very high 4.9 for both “timeliness” and “service.” According to the carrier, it had an 86% on-time performance rating in 2020, its best on-time performance score at least in recent years, and possibly since it began tracking the metric. “The thing that’s unique about us is the way that our schedule is built and how we operate on more of a point-to-point basis versus more of a traditional hub-and-spoke model,” Wally Devereaux, managing director of cargo and charters at Southwest, told Air Cargo World . “That actually creates a lot of redundancy and a lot of creative routing options within the schedule for us. And so, even if we don't meet that intended flight, we typically have a lot of different creative options available to get something to destination in a timely fashion that maybe even, in some cases, beats the original planned routing.” Southwest’s model calls for the carrier to operate primarily at its own facilities without outsourcing to cargo service providers, Devereaux said. “In most cases around our system, it’s Southwest Airlines employees on the ramp and in our cargo facilities,” which helps the airline meet its goals for timeliness and general service, he added. Southwest’s space availability and network scores, 4.6 and 4.5, respectively, ranked above other combination carriers in the Americas. Unlike the other U.S.-based carriers, Southwest did not operate any passenger-freighter flights, Devereaux said. However, the lack of passengers left plenty of room for cargo, even as flights declined from a typical pre-pandemic level of 4,000 flights per day to fewer than 2,000. “While we lost the number of trips available in the system, we could load a lot more cargo on the flights that we did have,” Devereaux said. The gradual return of more passenger flights has reduced the cargo capacity on each flight from the height of the pandemic cancellations, but with many additional flights, available capacity in Southwest’s network is still substantial. Southwest also ranked well for cargo tracking, which stood at 4.5, thanks to the carrier’s move to roll out cargo scanning across its entire network in June 2020. Southwest told Air Cargo World at the time that cargo scanning was the most request innovation from its customers. Devereaux more recently said the cargo scanning has provided better visibility to customers and to Southwest’s employees, which has been a benefit during the challenging environment. Looking ahead, Devereaux said “the other thing that ultimately folks want from Southwest Airlines is at least some opportunity to be able to book, which we really don't offer today, with some limited exceptions for certain kinds of commodities.” He noted that advance booking of cargo is standard across the industry generally, and for Southwest’s competitors. While he couldn’t say when Southwest will offer this feature more widely in its network, he noted that the airline is “working on that.” Cargo Facts Consulting finds room for improvement in service levels Unsurprisingly, 2020 presented difficulties for most carriers in several categories. “On average, customers rate the service they receive from their airlines as being good, but few carriers score well across all categories,” Cargo Facts Consulting (CFC) Managing Director Frederic Horst said in the report on the survey results. Some areas in particular presented problems for carriers, leading to generally lower scores; “rates” was the lowest metric overall, with more than half of the 15 carriers that received statistically valid scores scoring below a 4.0. Rates also stood out as the top suggestion from airline customers on how carriers can improve. Only UPS stood out for its relatively high score of 4.7 in the category. Capacity also noticeably suffered in 2020, which comes as no surprise as the industry continues to struggle with the lack of belly space in passenger aircraft. This category includes two metrics on the survey: “main-deck capacity” and “space,” and both stood out among the top suggested improvements, likely due to the close relationship between tight capacity and high airfreight rates. Carriers ranked highly for their main-deck capacity include Cathay Pacific and UPS, which both received ratings of 4.5, and Cathay Pacific was also a top scorer in the total space metric, with a 4.7, followed closely by Southwest with a 4.6. Apart from the rankings, this year’s survey invited respondents to give insights into actual service levels as related to cut-off and recovery times, advance booking requirements, notification of exceptions and time to pay claims. As noted in Horst’s report, “the results are astounding and are similar to our 2018/2019 survey – that while customers are generally happy with their airlines, they don’t even provide what would be considered remotely acceptable in other industries.” Most carriers still required cut-off and recovery times well in advance of flights, with only one-third of respondents reporting that their preferred carriers had cut-off or recovery times of less than two hours. According to CFC’s analysis, only about 40% of respondents could book their cargo on a same-day flight, while the largest share, or 44%, required several days’ notice, and a further 15% required up to a full week. Notification of exceptions in shipments has also not improved much in recent years, CFC’s Horst noted. Only 12% of carriers were equipped for real-time notifications in 2020, while 36% took more than a day and 28% of respondents said they had to call their airline partners to be notified. “Real-time seems to be the exception,” said Horst. “This is clearly unacceptable where ample technology solutions exist to support high levels of visibility.” Compensation for failure to meet requirements was a low point for customer satisfaction. Only 2% of respondents said their airline partners pay on the same day, with another 6% reporting payment is made within one week. Meanwhile, 54% of carriers take more than a month to settle payments. The news wasn’t all bad, however. Even for those carriers that didn’t receive the highest overall ratings in their region, there were standouts for many metrics. Singapore Airlines and Qatar Airways both scored highly across most categories, while Turkish Airlines stood out for receiving high marks on its growing network. Lufthansa Cargo did well in the service categories, and UPS was scored well by respondents for its pharmaceutical and specialty cargo capabilities. Carriers are focused on continuing to improve their customer service and reliability levels for shippers. Emirates’ Ambak reiterated the airline’s desire to remain adaptable while maintaining the reliability their customers depend on, and Southwest’s Deveraux emphasized the need to keep improving and adding services that are valued by their customers. “We want to keep getting better,” Devereaux told Air Cargo World . “We want to be able to not only maintain but also continue to improve our services and grow.” Due to the difficulties in issuing the awards during the COVID-19 pandemic, our editorial team, in partnership with Cargo Facts Consulting, will revise the scoring metrics and methodology to present the Air Cargo Excellence Awards again in future years. Stay tuned to AirCargoWorld.com for more information on future ACE survey methodologies. Find more in-depth analysis of this year's top carriers for pharma cargo, perishables and other specialty cargo in Associate Editor Kelly Stroh’s feature story, “Keeping an eye on specialty cargo: The ups, downs, trends and traffic in 2020.”

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