Company Profile: Calogi
It’s staggering to think that Calogi, the leader in airfreight portal solutions in the Middle East, has been operating for only two years. More than 400 companies are currently subscribing to its portfolio of online services, with a user base in excess of 1195, tallying up between them a staggering two million transactions so far. And if this is not impressive enough, the producers of the portal are confidently predicting that the overall number of users, transactions and customers will double year-on-year from now on. Patrick Murray, head of Calogi and Jean Pierre De Pauw, divisional senior vice president of Dnata Cargo, are understandably excited about their portal, which they believe has, “changed the way in which the community at large conducts air cargo business”.
Starting as the brainchild of Dnata, Calogi has quickly matured into a neutral business with its own independent management structure. Since its inception in 2008, the portal has outdone its own milestones and gained recognition and appraisal worldwide – and all of this at a time when the rest of the world was still reeling from the global economic recession. So what is the big secret behind its success?
The story of Calogi’s conception is rooted in the needs of the region’s thriving air cargo industry. Already a successful player in the field, Dnata identified that Dubai’s large freight community lacked the adequate automation to communicate electronically with each other – slowing down the rate at which business was transacted and impeding supply chain efficiency.
Relying heavily on paper-based transactions and cash payments, the industry was struggling to manage under an increasing mountain of paperwork – leading to costly delays in shipment handling. Calogi was built as a direct solution to address these issues and ultimately to simplify the air cargo supply chain process. “The portal is a one-stop-shop for the air cargo supply chain,” explains Murray. “The philosophy is that data is entered once, by the information owner, and re-used throughout the shipment lifecycle, removing the need to re-key data, thus reducing errors and improving accuracy.”
By creating a virtual business environment for a wide range of service providers, Calogi allows the supply chain community to complete transactions without even having to leave the office – cutting out time wasted on protracted face to face office meetings or lengthy phonecalls. For an idea so simple and yet so effective, it’s a wonder that no one else has invented a product that has met with similar success.
“There probably are players in the world that offer parts of the functions that we do, but nobody has ever brought it together,” says De Pauw. “Nobody has added the official functionality which is exclusive to what we are doing – and put all that together on one platform.”
The whole notion of a single internet-based platform connecting all stakeholders in the cargo community to conduct their business transactions online and on a real-time basis is without a doubt both exciting and progressive. But the question that begs to be asked is can such a system really work in practice? Calogi is proof that it can. Today, the portal’s services cover the entire network of online business components for industry stakeholders including freight forwarders, airlines, logistics operators, customs and other supply chain service providers.
“Key to our success is the simplicity with which business can now be conducted in a paper free environment, resulting in productivity gains, cost savings and new revenue streams,” says Murray. “Even when recession hits, forward thinking companies will continue to particularly invest in solutions like Calogi where the returns on investment are clearly demonstrable.”
By understanding the invaluable function of Calogi as a cost-savings solution for the industry, one can appreciate why the portal has risen to fame during recessionary times. With companies under pressure to reduce costs, it presents an attractive, streamlined and cost efficient way of doing business in the air cargo community.
“The real reason why Calogi is so successful in Dubai is because we have created a platform where the benefits to the users are cost savings or new income streams,” agrees De Pauw. “Our business model means that every single entity that uses the portal to sell or buy air cargo services has a real measurable benefit.”
Shippers, for instance, can negotiate rates, assign a job, view the shipment status via Calogi’s dashboard, share an e-SLI (Shippers Letter of Instruction) with the forwarder and view the shipment related documentation , hence improving productivity and reducing overheads. The forwarder too benefits from data inheritance, and being able to do business with over 90 airlines. Using the ad-hoc air waybill release feature, GSAs and airlines in return can do business with over 360 forwarders in Dubai without the need for the traditional stock release and associated payment delays and credit risks.
Even the air cargo terminal operator can benefit from the shared information meaning that its staff no longer has to re-key data, allowing the forwarder to bypass the terminal counters and proceed directly to the delivery dock with his shipment.
It appears, however, that Calogi has not yet persuaded everyone to join its e-freight fanclub – at least not just yet. While the agent community on the portal is automatically 100% e-freight enabled, take-up by the airlines has been lower than the producers first hoped.
“The irony is that Calogi has created a full e-freight environment. We are now waiting for the airlines, who were the ones driving the IATA e-freight programme in the first place, to come to the table and accept our e-freight solutions,” says De Pauw. Undeterred, Murray hopes to change this by spearheading an e-freight focus group in Dubai consisting of airlines and forwarders, along with the local IATA representative, with the aim of improving the penetration.
Buoyed by the success of the portal thus far, the Calogi team has been keenly listening to feedback from industry colleagues and customers to customise its system design even further to solve real business problems. Presently, the company runs an active user group consisting of both large and small forwarders, airlines, general sales agents and third party logistics providers.
Calogi has also launched the first loyalty programme dedicated to air cargo supply chain businesses earlier this year. C-Club allows any seller of services on the portal to run a loyalty scheme with any buyers on the portal. By running their own loyalty programme, Calogi subscribers are able to solidify existing relationships, initiate new relationships and convert one-time customers into repeat business.
The future certainly looks bright for the portal. Further global growth is also on the cards, both in the Middle East and across the world. The demand for its low cost, ‘functionally rich’ solutions has seen Calogi stretching its services to cover neighbouring regions of Sharjah, Abu Dhabi and Oman, with Saudi Arabia, Qatar, Bahrain and Jordan next on its agenda.
And it doesn’t stop there either. “In the next financial year we intend to target a much larger international audience as interest in our product grows and industry leaders look to reduce their costs through automation,” Murray says. Dnata’s De Pauw agrees. “Although it was something that was started by Dnata, it is a separate division which has to stand on its own merits,” he adds. “If we see a good opportunity to partner with an existing entity that might offer something that complements what we are offering or even open up companies in other parts of the world – we won’t exclude it.”
For now at least, it appears that Calogi will continue to treasure its mantle as the leading airfreight portal solution for quite some time. “Calogi is the glue which binds the industry together,” says Murray. “Eventually governments will demand one single Cargo Data Exchange platform that will link the vast majority of traders. If this vision becomes a reality, Calogi will be in a great position to offer the service.”