Ethiopian Cargo & Logistics Services, the air cargo arm of Ethiopian Airlines, has risen from obscurity to become the largest air cargo carrier in Africa.
However, the company wasn’t always the powerhouse it is today. In its early days, Ethiopian Airlines’ cargo division was just a small part of its operations and struggled to compete with larger, more established players in the air cargo industry.
What was The Problem?
Outdated infrastructure and limited resources.
Beyond that, the African air cargo industry faced challenges like inefficient terminals and a lack of modern equipment.
How Did The Company Overcome These?
Ethiopian Airlines saw an opportunity to change the narrative.
However, the company’s big move would come in 2003 when it invested heavily in cargo operations. They upgraded their cargo terminal at Addis Ababa Bole International Airport, improving capacity and handling efficiency. At the same time, the company began acquiring dedicated freighter aircraft, a shift away from relying on passenger planes to carry cargo.
With this new focus on infrastructure and fleet expansion, Ethiopian Cargo & Logistics Services began to grow fast.
They added more destinations and increased the volume of cargo they could handle, including specialized shipments like pharmaceuticals and perishables. By 2019, Ethiopian Cargo & Logistics had overtaken all other African carriers in freight tonne kilometers (FTKs), becoming the largest air cargo carrier on the continent. You would think the company would stop there, but it didn’t.
They kept pushing forward, offering cutting-edge services and building partnerships with global logistics providers.
Today, Ethiopian Cargo & Logistics is a key player on the global stage. And the company got there by addressing the problems no one else was solving.
What Are The Lessons From The Success of Ethiopian Cargo & Logistics Services?
Ethiopian Cargo & Logistics Services built an impressive air cargo operation that now serves as a model for other African carriers. However, from the story, it is clear it wasn’t without some hard decisions and a dedication to the goal.
So what are the lessons we can learn from the company?
1. Investing in Infrastructure is Key to Scaling Up
Ethiopian Cargo & Logistics Services invested significantly in cargo terminals, modern freighters, and facilities. This focus on infrastructure allowed them to handle increased volume and offer better service. For other African air carriers, investing in modern, efficient infrastructure is a key step in expanding air cargo operations.
2. Strategic Expansion and Global Partnerships Matter
The company did not try to do everything on its own. The company strategically partnered with stakeholders, including other global logistics companies and freight forwarders, to enhance their reach. By collaborating with players like DHL and FedEx, Ethiopian Cargo & Logistics ensured it could offer global service and access key markets.
3. Technology Makes Operations More Efficient
The company adopted advanced technologies for tracking and managing shipments. Their real-time cargo tracking and air cargo management systems streamlined their operations and allowed for faster, more efficient service. For African air carriers, technology is critical for staying competitive in today’s fast-paced logistics environment.
4. Take Advantage of Africa’s Strategic Location
Ethiopian Cargo & Logistics Services benefits from Ethiopia’s central location in Africa, making Addis Ababa a key transshipment hub. The airline’s hub-and-spoke model helps them efficiently connect African businesses to global markets. For other carriers, strategically positioning hubs in key cities across the continent can increase access to international markets.
5. Offer Specialized Services to Stand Out
By expanding their service offerings, such as offering temperature-controlled shipping for pharmaceuticals, Ethiopian Cargo & Logistics Services was able to cater to niche markets. Other air carriers can learn from this by considering specific market needs, such as e-commerce, perishables, and pharmaceuticals, and offering tailored solutions to meet those needs.
How African Air Cargo Carriers Can Apply These Lessons
It is true that air cargo and other supply chain operations in Africa face several challenges, such as:
- High operating costs
- Limited infrastructure
- And competition from global carriers.
However, these are not new challenges. The story of Ethiopian Cargo & Logistics Services shows that overcoming these challenges is possible with a clear strategy and investment in key areas.
For African air carriers seeking to replicate Ethiopian Cargo & Logistics’ success, here are a few takeaways:
- Focus on developing infrastructure to help expand capacity and attract more clients.
- Leverage technology to improve efficiency, reduce errors, and enhance customer satisfaction.
- Form strategic partnerships with stakeholders in the air logistics process, because it can provide access to international markets and improve service offerings.
- Diversify service offerings and find niche markets’ needs, such as providing e-commerce solutions. It will help build a competitive edge in the market.
- Many African countries have strategic locations between key global markets. It is time to utilize them, especially to position the air carrier as a hub connecting Africa to the rest of the world.
African air cargo carriers have a lot of potential to grow, and Ethiopian Cargo & Logistics Services provides a roadmap for success.
By learning from the Ethiopian Cargo & Logistics’ example, they too can expand their reach and tap into the growing demand for air freight in Africa and beyond. Other carriers can enhance their service offerings and become key players in the global air cargo market.
Obinabo Tochukwu Tabansi is a supply chain digital writer & ghostwriter helping professionals and business owners across Africa explore various strategies that work and learn from the success and failures of various supply chains across the globe. He also ghostwrites social content for logistics & supply chain businesses
