With capacity uncertainty looming over the industry Peter Penseel, chief operating officer, airfreight, CEVA Logistics explained why CEVA is taking matters into its own hands with its new SKYCAPACITY airfreight programme.
ACW: Can you explain what the SKYCAPACITY programme is and why CEVA launched it?
Penseel: Over the past two years, demand fluctuations and the pandemic effects on passenger flight capacity have necessitated a rise in charter activity as a result of the overall supply chain volatility. For certain customers, we proactively secured lanes to anticipate and mitigate any disruptions to their supply chains, specifically in manufacturing settings. The drop in passenger flights has more dramatically affected certain regions’ cargo capacity, for example in Latin America. These complex market conditions have required a level of careful planning and the ability to offer multiple options to our customers.
Early in 2021, in the face of this complex market, CEVA Logistics took a strategic approach to the current market situation by launching an owned, controlled capacity program, called SKYCAPACITY. Our dedication to our customers meant we were willing to take the risk of proactively securing our own capacity to serve our current and future customers.
The program currently offers a variety of destinations to and from North and South America, Europe and Asia Pacific. The owned, controlled network spans multiple carriers and includes freighter, pax freighter and passenger capacity. This is dozens of flights every week, offering consistent pricing and guaranteed capacity despite market peaks and lows. The network is also available as a spot cargo solution for customers.
ACW: Has there been high demand for SKYCAPACITY so far?
Penseel: Yes. We were confident that current and potential customers would want the peace of mind in such a volatile market, and that has proven to be true. The opportunity to access consistent pricing and guaranteed capacity is an important point for many customers.
ACW: The Seoul, Wuxi, Chicago route was recently added to the network. What industries this new route be supporting?
Penseel: There are a wide variety of industries that currently take advantage of the SKYCAPACITY program, including this route. In particular, automotive and electronics customers are already taking advantage of this new weekly service.
ACW: What destination is CEVA planning to expand the network to?
Penseel: We will continue to look for the right markets and lanes to add to the programme in order to continue serving our customers with consistent pricing and guaranteed capacity. Lanes in and out of Asia will continue to be important growth opportunities, but we also anticipate adding capacity in Latin America.
ACW: What industries will this support?
Penseel: There are a wide variety of industries that currently take advantage of the SKYCAPACITY programme. Some are regionally focused, while others are more global in nature. For example, in Latin America, we expect to see more activity in the flower and perishables industries.
ACW: How is this offering more sustainable than other options? Is this something customers take into account?
Penseel: More and more customers are considering the sustainability of their supply chains. We look to help our customers make the best decisions when planning their logistics and freight transport operations to reduce environmental impact as they balance the business and timing needs of their supply chain processes and shipments.
For example, we offer an eco-calculator on our website and through our MyCEVA digital platform to estimate the logistics carbon footprint of a shipment via ocean, air or ground. Estimating carbon footprint and planning accordingly is the first step towards a more sustainable supply chain.
As part of the CMA CGM Group, CEVA Logistics is strongly committed to the protection of the environment. As a whole, the Group is significantly investing in research and development to help the emergence of future energy sources and technologies to reduce the impact of transport and logistics on the planet. The CMA CGM Group aims at becoming carbon-neutral by 2050.
Specific to airfreight, earlier this year CEVA announced our participation in the United Airlines Eco-Skies Alliance to promote the use of sustainable aviation fuel in passenger and transport flights.
ACW: In your opinion, is route certainty something we should no longer take for granted?
Penseel: According to IATA data, industry-wide cargo in May 2021 rose by 9.4% compared to pre-crisis levels in May 2019. Obviously, that’s good news, but the fact that we’re even measuring against 2019 tells the main story and is a stark reminder of just how far the industry has come from this time last year.
The resurgence of consumer demand amid the global pandemic, specifically in terms of e-Commerce, has been significant. The economic restarts combined with that changing customer demands from services to products, has had major impacts on the supply chain industry, from retailers all the way up to manufacturing, component providers and raw materials.
Demand continues to be strong, and our clients rely on us to navigate the volatile market to ensure their supply chain success.
ACW: Have shipper’s needs changed in this time?
Penseel: Shipper’s needs have certainly had to change and be much more flexible as the overall freight market continues to see disruption. In some cases, shippers who never would have considered using airfreight before are now adding it to the mix of their supply chain solutions. Depending on their needs and destinations, airfreight capacity can be challenging to find. At CEVA, we consider it part of our commitment to responsive logistics to ensure our customers have the best solutions possible to even their most difficult logistics challenges. We’re getting a lot of opportunities to prove this commitment in the current market conditions.