Outsourcing driving growth

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CHEP Aerospace Solutions AKE ULD in aircraft hold

The unit load device (ULD) market is one of the few airfreight sectors that is growing and developing strongly, as airlines continue to outsource their management to save on costs and improve efficiency.

Jettainer, a subsidiary of the Lufthansa Group, grew 10 per cent in 2014 and managing director, Carsten Hernig, tells Air Cargo Week (ACW) he forecasts similar growth in 2015. Hernig says: “We plan on doubling the number of managed ULDs in the next three to five years, which will be a strong, but healthy and manageable growth,” now there are 90,000.
The German company continues to win new business and will manage and maintain ULDs from October for Thomas Cook Airlines UK and Thomas Cook Airlines Scandinavia within the Thomas Cook Group airlines. Jettainer has also made its first entry into the African market, taking over ULD management in March for Equatorial Congo Airlines and took over ULD management for Canadian KF Aerospace.

Jettainer’s strategy is to first focus on gaining business with big airlines as well as those under cost pressures. “In addition, we take a close look at smaller carriers and low cost carriers starting widebody or long haul operations,” Hernig says. He explains various airlines are showing interest in ULD management outsourcing, and Jettainer is targeting all regions. “From the regional point of view, we see opportunities in the Americas, Asia and Europe. Our global network basically enables us to easily integrate any new customer anywhere in the world,” Hernig explains.

Due to strong growth, Jettainer opened a logistics centre in May at Frankfurt Airport. JettHub, as it is known, covers 17,000 square metres and around 750,000 units a year can be moved at the facility. It holds up to 9,000 containers and pallets. Hernig says it creates a solid foundation at one of the world’s busiest airport to manage the firm’s growth.
Growth is also the pattern at CHEP Aerospace Solutions, and president, Ludwig Bertsch, tells ACW it continues year-on-year. He says the primary aim is to ensure it meets the needs of customers from an operational perspective. “Whilst I am extremely pleased with our performance in this area, we continually look for ways to create additional value for customers,” Bertsch says.

CHEP continues to gain more ULD management deals with airlines and signed an agreement with LAN Cargo in May for the repair and maintenance of its fleet of cargo containers and pallets at Miami International Airport to and from South America. Bertsch says CHEP now manages Cathay Pacific’s ULDs and has entered partnerships with Air France and Singapore Airlines for ULD repair and maintenance. Bertsch says: “CHEP is working with a number of airlines around the world and we hope to add further successes in the year ahead.”
The opportunities for ULD management companies are increasing, as airlines continue to outsource operations. And with around 90 per cent of carriers still managing ULDs themselves, there is plenty more fruit to pick. In the opinion of Hernig, more airlines will identify the outsourcing of their ULD management as one of the last opportunities to increase efficiency and reduce costs. He sees huge potential in the marketplace.

“There is a good momentum right now for growth due to the fact that most of the efficiency fields, at least the ones that do not or only little affect the passenger service, have been harvested completely,” Hernig explains to ACW. Bertsch notes the airline industry operates in a cost competitive environment, and carriers are always looking to drive further efficiencies into their operation. These could be outsourcing ULD management, or use of ULD repair stations at airports for maintenance, while some want to benefit from CHEP’s large pool of assets as ULD demand rises. “Outsourcing allows the airline to reduce their costs, but importantly, can support them in meeting and exceeding their sustainability targets, whilst enabling them to focus on delivering the best customer experience possible, creating more value for their customers,” Bertsch says.

ULD outsourcing is also boosting airline performance through the development of lighter ULDs to reduce fuel consumption, costs and carbon emissions.
Jettainer will soon introduce a lightweight pallet made of a composite material, providing weight savings of more than 30 per cent. Hernig explains: “First of all, ULD development will continue to go towards lighter, environmentally friendly units, especially when it comes to pallets.”

ULD tracking is also on its way, and Hernig says GPS trackable units that inventory themselves are being developed and will soon reach the market. CHEP will be rolling out its CanTrack device aimed at improving efficiency and Bertsch says the technology turns containers into, “smart ULDs,” providing airlines with real time information on movements along with data on temperature, humidity and impact. “Our field trial with Air Canada, Cargolux and Hawaiian Airlines was successful and we look forward to offering this to our customers in the near future,” he says. The ULD market is bouyant and continues to evolve and as airlines continue to outsource ULD operations to help boost operational performance, the market shows no signs of slowing down.