Unilode sees vast potential as airlines look to outsource

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Unilode Aviation Solutions sees vast potential growth opportunities in the unit load device (ULD) market and is also eyeing up joint ventures, Justin Burns writes.

The company is evolving since being acquired by EQT Infrastructure and rebranded from CHEP Aerospace Solutions in November 2016, while Benoît Dumont took over from Ludwig Bertsch as chief executive officer from 1 September.

Unilode chief commercial officer, Don Jacobs (pictured) says it has some “very promising opportunities” in the sales pipeline and is also working on the renewal of a few ULD management and ULD and/or galley cart MRO agreements.

“We are in negotiations in regards to the potential establishment of joint ventures to complement our global repair network, but at this stage we cannot disclose any detail yet,” he adds.

After the acquisition of the ULD fleet of Saudia Cargo in March, Unilode now operates over 120,000 containers and pallets, the largest outsourced ULD fleet in the world and has ULD management agreements with 40 airlines, including Cathay Pacific, LATAM, Air Canada, SAS, Cargolux and AirBridgeCargo.

Unilode Aviation Solutions chief commercial officer, Don Jacobs

Jacobs says: “Our ULD management business model provides optimal flexibility for our customers and our goal is to always find the best possible solution for the customer.

“Most airlines choose our fully pooled ULD model while some prefer a hybrid stock in which the containers are exclusively used by the airline and the pallets are supplied from the Unilode pool.

He sees opportunities for growth as it estimated that only around 25 per cent of the ULD management market has been outsourced.

Jacobs says: “The fact several reputable airlines who have a large and complex ULD operation recently have decided to take the outsourcing step has definitely created positive momentum in the marketplace. We expect the outsourced share will double within the next five years as airlines continue to be under pressure to cut costs and outsourcing ULD management operations is one of their options to achieve operational efficiency and customer satisfaction at a lower cost.”

He expects Unilode to sign a few ULD management agreements this year and in 2018, which will automatically add new airports to its network if none of its other airline customers fly to these destinations.

Jacobs says: “The synergies provided by pooling are even more relevant if several carriers serve the same airport, which improves the efficiency of our ULD pooling business model.

“In terms of MRO stations, two new repair centres have been added to our network, one in Santiago de Chile and one in Cincinnati, which are now fully operational and FAA Part 145 certified to repair containers, pallets and galley carts. We also plan to open repair stations in Brazil and in other key hubs in Asia.”

Asia provides the highest potential for ULD management contracts and Unilode has intensified its business and network development activities.

Jacobs says: “We already have our 24/7 Global Operations Centre in Bangkok and an office in Hong Kong to assist with Cathay Pacific’s ULD management operations and will establish additional physical presence in the region.

“There still is significant potential in the Middle East where the airlines will continue to grow at an impressive rate and we also see good business development opportunities in Latin America, not only for our ULD management, but also for our ULD and galley cart MRO business.”

As for the future of ULDs, he says ‘Smart ULDs’ will offer significant benefits mainly for the air cargo industry, but also for passenger divisions as they can enable timely and accurately track ULDs and their contents.

Jacobs says additional sensor-based data for temperature, impact, humidity and other items will provide valuable information, which is not available today.

He explains it has started development of CanTrack, and also works with galley carts while its tracking app developed for galley carts, which is similar to ULDs, intends to turn the assets into ‘smart’ units: “For this we use long-range Bluetooth technology and the app includes the same sensor capabilities present in the technology of smart ULDs.”

Future forecasting is difficult, he says as the industry has always been subject to highs and lows and he notes historic patterns are no longer a measure to predict future demand, making it challenging for Unilode to service its customers.

He adds: “Unilode continues to invest in Smart ULD technology, which is aimed at providing even more transparency and predictability of ULD movements and availability throughout our network. To this effect Unilode is working closely together with some of its prime customers, to ensure that the technology developed is fit for purpose and provides a true added value to their operations.”