While airline cargo bosses remain divided on whether to outsource ULD management to professional outfits like Champ, Unitpool or Jettainer, James Fernandez — RVP sales & marketing, Champ Cargosystems, believes that the choice to outsource rests with the airline. “My view is to understand and measure the savings one would gain before going for outsourcing.â€Â
Indeed, outsourcing has now become an accepted fact. While the cargo market shrank on one hand, on the other was the galloping price of oil. The twin enemies forced air carriers to develop strategies to keep their noses above water with the help of flexible providers of outsourceservices. Such moves, naturally gave rise to new opportunities in outsourced ULDmanagement.
Take the case of Unitpool. The company has around 22,000-odd ULDs on its roster and it not only manages, but tracks and traces and even carries out repairs of the units used by its more than 20 customer-airlines. Unitpool starts off by buying an airline’s inventory of ULDs. It then meshes the ULDs into the Unitpool fleet after which it allots the ULDs needed to the airline under a contract. The system enables carriers to cut down significantly on the number of ULDs required for freight operations. Also it enables customers to avoid the headaches of ULD repairs and their procurement.
On the other hand, there is Jettainer. It provides airlines its own brand of ULDs, which once bought from the airlines becomes the property of Jettainer. These are provided to carriers on a sale and lease-back approach. In addition, the carrier does not have to carry out any repairs or maintenance of ULDs, which is passed on by Jettainer to a ULD maintenance company. This method, according to Jettainer, reduces an airline’s ULD costs by 20 per cent through the effective asset management techniques.
Other than physical outsourcing to companies like Unitpool or Jettainer, there is of course the information technology option for better managing one’s own fleet of containers. According to Fernandez, the new generation ULD Manager the company has put into operation provides better control and improved utilisation of ULD equipment, reducing costs and the need for capital investment. For Champ, 2009 was a good year, “in spite of the gloomy market conditions,†said Fernandez. He pointed out in what turned out to be “good, strong year†Champ signed up 17 new customers, the last being Finnair.
Widely recognised as an industry leader in the use of IT, Finnair had been a Champ customer for six years and migrated to the new generation Cargospot portfolio to manage the transformation of its cargo business. With the new system in place, the carrier hopes to improve yields across the airline’s €200 million division.
Another leading IT solutions provider is India-based IBS Software. The company’s cargo management solution, iCargo, was developed four years ago in collaboration with six leading international airlines. Since then, more than 20 global cargo carriers, from industry leaders to start ups, have contracted for the solution.
iCargo is the prime product in the IBS Cargo Management suite of products — the others being iCargoLite+, iCargoLite and iCargoNet. An integrated system which comprehensively addresses operations including ULD management, iCargo was developed after stakeholders gave in their inputs so “we could understand their true business requirements,†said the global head of IBS’ Airline Cargo Business, Akshay Shrivastava.
Shrivastava says iCargo is fast emerging as an industry leader in the new generation of cargo solutions. Preferred by the likes of Nippon Cargo Airlines (NCA), All Nippon Airlines (ANA), Qantas, Austrian, Air Astana and Aryan Cargo, “it is the only solution in the industry that addresses all automation needs of a cargo carrying airline in one single homogeneous system, be it airport air cargo management, cargo and mail handling, cargo terminal operation, ULD management, cargo & mail, revenue accounting or cargo revenuemanagementâ€Â.
The versatility of the iCargo solution has helped in the “transition from legacy systems to next generation systems,†says V K Mathews, chairman and CEO, IBS Group. “Establishing a single robustcross-departmental IT solution across all cargo business function can play asignificant role in reducing the cost ofoperations.†Most carriers are comingaround to the view that outsourced assetmanagement does not only save costs butalso ensures availability of capable ULDs at low costs. But, air freight industryexperts predict that it will be quite awhile before all airlines give up their ULDinventories and outsource the allotmentto those who specialise in maximisingniche efficiencies.
Korean refines cold chain offering for pharma
Facing what it calls “severe competition caused by the volatility of demand and low entry barrier to the airfreight market,†Korean Air is repositioning itself in the market to find new value added opportunities with its customers. Key to this strategy is a focus on the high-yield temperature sensitive pharmaceutical supply chain.
As such, Korean Air has “remodeled†its cold chain offering, revamping it after conducting what it said was thorough market research analysing routes, flight schedules, current facilities and processes across its worldwide network.
Called Variation Pharma, Korean Air will begin offering the new product in June, specially targeting Global Pharmaceutical Manufacturers who are looking for a carrier to provide them more comprehensive global network options with consistent quality service. Korean Air said it will equip itself with widest cold chain service routings on its worldwide freighter network by 2011.
“Variation Pharma places the highest importance on containerisation of temperature sensitive pharmaceuticals in RKN E1,†through a lease agreement with Envirotainer. Korean will also undergo the QEP certification process for handling RKN E1s. Korean Air’s Incheon Cargo terminal has a capacity of 24 tonnes of temperature sensitive shipments at one time with full electric connections for RKN E1 chargers.
When it comes to cold chain service, Korean Air has had substantial experience after transporting a variety of temperature sensitive shipments since 2001, using T1 and T2 types of temperature controlling containers.With its new cold chain service strategy,
Korean Air is now firmly focused on the highly specialised pharmaceutical market, it said. Korean Air Cargo operates a fleet of 27 B747-400Fs, with 44 flights weekly to the US and Canada, 33 to Europe from Korea, which creates 14 routings to America and 22 to Europe. Its network to China, Japan and Southeast Asia is also substantial.