How does the new company, SAL, bring more support to the aims of Saudi Vision 2030?
SAL was created as an independent company in 2020 with the mandate of being a leading logistics provider in the country, derived from the country's Vision 2030 of being a logistics hub in order for SAL to participate and support the vision, encompassing sea, air, and land transportation. The Company is fortunate in the sense that it can seamlessly draw on its broad network and deep expertise built over decades as the cargo handling unit of the national flag carrier, Saudia. SAL is therefore well positioned to support the logistics and transportation agenda of Saudi Arabia's Vision 2030 economic strategy, fuelled by the Kingdom's youthful demographics, rising consumption and digitalization, and increased global connectivity in trade and investment.
How is the growth of e-commerce regionally and globally affecting the logistics sector, especially in Saudi Arabia?
The global rise of e-commerce, accelerated by the global pandemic, is very much evident in Saudi Arabia and is a key driver for Saudia Cargo & SAL's growth. The Kingdom has embraced a rapid transformation in retail, for example by significantly increasing courier company licenses in the last year to meet rising demand and announcing new Integrated Logistics Bonded Zones to facilitate access for global e-retailors to the rapid growth and spending power of the Saudi market. Both Saudia Cargo and SAL are not just a beneficiary of the increase in e-commerce but in fact, we are actively driving its progress. For example, Saudia Cargo recently signed an agreement with Cainiao, which is part of the AliBaba Group, to handle its e-commerce into Riyadh and Liege, providing improved connectivity into two key regions for the Chinese company. Partnerships such as these are built on the provision of high-quality service and close collaboration between SAL and Saudia Cargo and drive higher volumes for both companies. Fulfilling the increasing e Commerce volumes from infrastructural requirements is where SAL comes into play with its facilities. We have a dedicated operational courier facility in Riyadh whilst a similar facility is being evaluated for Jeddah.
Would you tell us about your diversification strategy?
SAL's purpose is to be a leading logistics provider and act as a growth catalyst in the sector. While continuing to build our core business of cargo handling, SAL is furthering its diversification through the logistics sector increasing its portfolio of activities to include e Commerce fulfilment, 3PL solutions and further supporting the pharmaceutical industry. In the air cargo handling business, we have built a strong track record in managing diverse cargoes that require specialised attention. For example, in the last year, our large-scale cargoes included equine, Formula-E cars, pharmaceuticals and entertainment industry equipment. This necessitates close attention to detail and to customer requirements, in addition to a high level of customer engagement. We will continue to develop this core offering through horizontal and vertical business integration, both inside and outside of airport premises.
Would you tell us about the recent infrastructural development at SAL that is contributing to Saudi Arabia becoming a global logistics hub?
We are investing heavily in both our infrastructure and technological capabilities. In 2018, we initiated two multi-billion-riyal investment projects at the Riyadh and Jeddah airports, building state-of-the-art cargo terminal facilities. The first phase in Riyadh has been completed operational since April 2020, while the first phase in Jeddah is scheduled to be completed and operational by the end of this year. By 2023, when both projects are completed, we will have the capacity to handle over 3.5 million tonnes of cargo annually. The developments include dedicated e-commerce, cold-chain, export and re-export facilities, which will support our ambition to attract larger cargo volumes into the Saudi Arabian hub, both for the domestic market and as transshipments into the Middle East, Europe and the Americas.
Saudia Cargo is transporting the coronavirus vaccine in the Kingdom. What were special arrangements needed to achieve this milestone?
SAL worked seamlessly with Saudia Cargo to carefully plan and execute the transportation of COVID-19 vaccines into the Kingdom. The process involved close coordination with concerned international and local authorities to facilitate the smooth and safe handling of these highly sensitive shipments. Locally, we have partnered with the Saudi Customs Authority and Saudi Food & Drug Authority (SFDA) to expedite clearance with special training provided to SAL operational staff, handling the vaccine shipments on the ground. Our dedicated climate control organization and team, as well as our GDP trained staff, have ensured a flawless operation to move vaccines. We are also in constant communication with world leading providers of active temperature-controlled containers, such as Envirotainer, Dokasch or C-Safe active containers. These sophisticated aircraft unit load devices (ULDs) are designed to maintain specific temperatures tailored for pharmaceutical products. Saudia Cargo on the other hand is well-experienced in handling vaccines for many years and this is an advantage given the massive scale needed in transporting COVID vaccines to different countries. Collectively Saudia Cargo and SAL are able to maintain an effective cold chain throughout the cargo value chain.
Despite the COVID-19 pandemic, Saudia Cargo continues its operations. How did you manage to maintain the supply chain?
Demand for air cargo services has risen during the global pandemic, with air freight providing the most reliable and efficient means of transporting medical and healthcare supplies. This was especially the case given the disruption to supply chain stemming from lockdowns and travel restrictions. To ensure continuity in transportation, especially of essentials, we needed to respond rapidly and with a high degree of flexibility to fast-changing circumstances. We proved our agility to adapt in an ever-changing environment through altering the global freighter and increasing the passenger freighter network around the globe and within the region. Alongside initiated 5th freedom rights and maximised asset utilization of our freighters to beyond 400 block hours per month, beyond the industry practice. In view of the customer and society requirements during the pandemic, Saudia Cargo emerges out as a champion in Saudi Arabia for line haul cargo, setting record number of flights, tonnages and impeccable on time performance.