STRATEGY 2020 UNDERWAY

Saudi Arabia 2018 | TRANSPORT | VIP INTERVIEW

TBY talks to Omar Hariri, CEO of Saudia Cargo, on changing priorities, market disruption, and human resources.

What are some Saudia Cargo's main strengths, and what things might be done differently under your leadership?

Saudia Cargo ranks among the world's leading airfreight carriers, and has left an indelible mark on the Middle East as it was the first to venture in this industry. We are uniquely positioned to provide a bridge between East and West via a wide global network and our three main hubs in Saudi Arabia. This gives us a unique competitive edge with increased flexibility, allowing us to move cargo with minimal handling time. We are currently undergoing an organizational transformation. Our strategy is in support of the Kingdom's Vision 2030 to make Saudi Arabia a leading freight and logistics hub for the region by leveraging its geographic position. In line with that, my aim is to focus on our five main strategic pillars: safety and security, service quality, people, customer experience, and profitable growth.

Can you elaborate more on the five strategic pillars?

In terms of our people pillar, Saudia Cargo recently signed with Gallup to drive a culture change of customer focus and performance. We also signed with Saudi Civil Aviation Academy (SACA) and National Training Centre for Facilities and Hospitality Management (NTC FHM) to impart training. We create personal KPIs to drive performance and efficiency in every position. Customer experience is our major focus. We have reformed the sales force and our customer service department and introduced new products in line with customers' needs. We also promote a customer-centric culture within the organization in addition to setting a customer journey action plan. In our safety and security pillar, compliance with external audits and certifications such as Transported Asset Protection Association (TAPA), as well as various International Air Transport Association (IATA) models will keep us on the correct trajectory. (and others was a major step) In addition, it is one of our goals to successfully complete the new IATA Safety Audit for Ground Operations (ISAGO) framework as well as the British Standards Institution - BSI - ISO Suite - ISO 9001 Quality, ISO 45001 Safety & Health management, and ISO 14001 environment management certifications. In terms of service quality, an important pillar, we focused on is that of upgrading the cargo IQ performance, re-engineering primary processes, and introducing new KPIs. We have introduced a HUB control center and will be developing this concept further as well as launched a new temperature control facility in both Riyadh and Jeddah. We have also reformed our quality, health, safety, security, and environment (QHSSE) department. Under the profitable growth pillar, we achieved a healthy increase in yield and implemented new revenue management systems that have resulted in a very healthy growth in net profits in the last few months.

The flip side to privatization across the industry has been the loosening of regulations and the introduction of foreign competitors. Is this market disruption healthy for the industry?

Competition is inevitable in an open market. We view it as motivation to become better in what we do and in driving better service to our customers. According to a Boeing analysis, in the coming 20 years, air cargo traffic will grow 4.2% annually. Overall, world air cargo traffic will increase from 223 billion revenue ton kilometers (RTK) in 2015 to 509 billion RTK in 2035. As far as Saudia Cargo is concerned, our Strategy 2020 initiative will make us more than ready to take on competition from around the world.

Technology has been driving the goals of Vision 2030 across the economy. How is Saudi Cargo adopting technological solutions to further its goals?

Technology enables transparency and makes transactions faster in different industries. The airfreight industry benefits significantly from this, as customers are able to track shipments in real time and draw our attention to any problems. At the same time, it makes booking easier and faster. This is transparency at its best, and we intend to invest further on our IT infrastructure for the benefit of our customers. Saudia Cargo is digitalizing the transformation to enhance our customer experience. The world has become smaller, and it is now heavily dependent on technology. Whether we like it or not, the digital age will catch up with the airfreight industry. The fourth industrial revolution, generally known as Industry 4.0, is already here, and the earlier we embrace technological advancements, the better.

Another key part of the Vision is vocational and in-house training or human resource development in tandem with localizing the workforce. How has Saudia Cargo invested in this area?

Training is an essential pillar of our strategy. For example, we partnered with Gallup, the world's leading performance management consultant, to redesign our company culture to a more customer-centric focus approach. In addition, in April, we also signed an agreement with SACA and NTCFHM to train 873 employees in various aspects of airfreight and logistic operations. This training partnership will cover wide-ranging areas, including airport security, operational safety, GACA's by-laws and regulations, the rules of airfields, dangerous goods, plans to respond to emergency situations, airfreight terminology, and others. A total of 558 courses will be offered during this two-year partnership. Our Transformation plan is in line with the Kingdom's Vision 2030, which calls for more support to the labor market by improving their skills and knowledge at different levels. This is the Kingdom's investment in the future and we are a key part of it.

What are some of your goals and ambitions for 2018 and in the longer term?

My goals include transformation by 2020 that will eventually cater to Vision 2030. I focus on investing in our IT capabilities, people, machinery/equipment, and facilities. Saudia Cargo is heavily investing in infrastructural development. We have signed agreements with three major companies to construct a new cargo handling facility with a total investment of SAR1.4 billion (USD373.5 million) for both Jeddah and Riyadh. The current 35,000sqm facility at Jeddah's King Abdul Aziz International Airport (KAIA) will be upgraded to a 75,000sqm state-of-the-art cargo handling facility with special focus on cold chain, pharmaceutical, and dangerous goods handling. The first phase of the project will start in September 2018 and is expected to end in November 2019, while the second phase begins June 2020 and ends December 2021. Riyadh's King Khalid International Airport facility will be fully refurbished in phases, with a new 23,600-sqm unit with special focus on e-commerce and special handling. In 2018, we also inaugurated the cold storage facility for medical and pharmaceutical products at KAIA Cargo Terminal to meet the increasing demand for temperature-controlled shipments. The refrigerated warehouse was opened in conjunction with the launch of FlyPharma, a product designed specifically to meet the growing demand for the pharmaceutical and life sciences sector.