Turkish Cargo’s new boss brings forwarders to the fore
No matter how much you might love your local coffee shop or pub, there’s invariably something that you would improve if you were running the show. Turhan Ozen has become that empowered customer. A former freight forwarder, he is now in the driver’s seat of one of the fastest growing air cargo operations in the world at Turkish Cargo. After eight years at CEVA Logistics, Ozen has plenty of ideas to get Turkish Cargo into the top five cargo carriers, and we had the chance to talk with him at this year’s IATA WCS conference in Abu Dhabi.
Ozen’s task isn’t easy, and he is conscious of the slim margins and overcapacity in the market. However, Turkish Cargo has a number of advantages that he hopes to leverage to push the carrier ahead of its competition. Foremost is what he describes as an increasing awareness of cargo’s role in the grand scheme of things. With a renewed focus on cargo, geographic advantages and a new airport being just a few of the elements at play, Turkish Cargo is worth keeping an eye on in the year ahead.
Q: How does your experience as a freight forwarder influence your role at Turkish Cargo?
Turhan Ozen: At the global level, forwarder-carrier relations are transactional and cost-focused. That’s understandable, however it is not connected to the local teams from a service or solution-designing or building or development perspective. From my experience, many global forwarders try to design solutions for their customers without involving the carriers. There is no reason not to have air carriers on board, though. Forwarders are certainly a critical link in the value chain, given their flexibility and access to different modes of transportation, but I want to bring the carrier to the table. I would love to build a relationship with global forwarders, to get them to consider Turkish Cargo when they are designing their solutions, at least according to the capabilities that we can provide
Q: With the new airport opening in a few years, what role does Ataturk play and what are your plans?
Ozen: The current Ataturk Airport hub has 1.2 million tonnes of capacity, and we currently use about 75 percent of it. The facility also has pharma and other temperature-controlled handling capabilities, so the current setup enables us to provide services through the next few years. The new airport will be operational in 2018, at which point we will move there, with the rest of the airline. That will double our capacity in the first eight-year period, and after 2025, we expect to triple our cargo capacity. Our strategy of [handling] time- and temperature-sensitive cargo also addresses decreasing yields in the industry. This is one of the biggest problems facing the industry. I don’t expect the high yields of five years ago to come back any time soon. To compete, Turkish Cargo has to increase its investment into special cargos and solutions. Last August, Turkish Cargo was awarded CEIV certification, and now we are expanding these standards to our main destinations, in order to provide an end-to-end compliant service, it may involve GDPs as well, starting with Europe, the Middle East and then China.
Q: How do you compete with Gulf carriers along similar routes?
Ozen: Air cargo is a competitive market, and the Gulf carriers are especially strong. The Gulf carriers started the hub strategy that Turkish cargo is following, so they are ahead of the game. However, Istanbul has a distinct geographical advantage over even the Gulf carriers – along the main trade routes. When I started, I had the engineers from the planning department run a center of gravity study for world cargo volumes for Europe, Africa, and Asia, and not surprisingly the center of gravity is just a few hundred kilometers from Istanbul. Secondly, Turkey has a huge manufacturing base which helps us balance imports and exports from a volume perspective.
Q: What does the future hold for Turkish Cargo?
Ozen: The company’s management want to play in a much more aggressive way. The airline is growing fast, and our network reaches 120 countries and more than 300 destinations. This gives us a volume and capability that we can exploit. On top of this, the company’s vision is to move Turkish Cargo into the top five cargo players worldwide by 2023. This is entirely possible, in part by expanding services in specialty and value-added cargo. Turkish is already strong in standard cargo, however there is room to grow elsewhere. Turkish Airlines is making cargo a central part of its growth strategy. This is the first time that the cargo business has a C-level executive. With the current network, we could expand cargo’s percent of revenues from 10 percent to 15 percent in the next five to six years.
