By Kalai Raajan
Maersk Enters the Air Cargo Sector
Maersk — a Danish shipping company — is known for its massive ships navigating the seas and its operational focus on being a shipping firm. The company also deals with inland freight transportation and associated services, such as supply chain management and port operation. They are now shifting their attention to a different aspect of nature: the skies.
Last year in November, Maersk announced and hinted at a push into air freight by ordering two Boeing 777F aircraft for the new cargo airline’s fleet, as well as acquiring German forwarder Senator International, which has its own air freight operations.
Maersk Air Cargo — the shipping company’s airline built on its existing integrator, Star Air — is the first step in what appears to be a full-scale entry into the airfreight business. Maersk Air Cargo, — based at Billund Airport — will take over Star’s operations and serve existing and future customers as well as Maersk’s end-to-end logistics. It will operate daily flights out of Billund Airport when it becomes operational in the second half of the year.
Maersk will operate five aircraft, two 777Fs and three leased Boeing 767-300Fs, as well as three new 767-300Fs, according to the company. The three leased B767-300 freighters will be operational next year through Cargo Aircraft Management, ATSG’s leasing arm. The 777 freighters, which were purchased last year, are scheduled to be delivered by Boeing in 2024.
The B767 freighters will be utilized on US-China operations. When asked about the practicality of a 767 on the transpacific, one airline executive explained, “It can work, depending on rates of course, and also routes. Quite honestly, with the Trans-Siberian routes closed, for what I think will be years, the economic case for this will be OK for quite a while, especially if it’s a new generation production 767.”
The new aircraft will join operations between the second half of this year and 2024.
One-third of Maersk’s yearly tonnage will be carried on its own network, which will consist of a mix of owned and leased aircraft “replicating the structure that the company has within its ocean fleet”. Strategic commercial carriers and charter flight providers will provide the remaining capacity. The decision to start an air cargo firm comes as supply lines continue to be disrupted by Covid lockdowns, port logjams, and the Ukraine situation. Airfreight has helped organizations who need to move urgent cargo to keep their supply chains running smoothly.
Aymeric Chandavoine, Maersk’s worldwide president of logistics and services, explains the company’s huge push into air cargo: “Airfreight is a crucial enabler of flexibility and agility in global supply chains as it allows our customers to tackle time-critical supply chain challenges and provides transport mode options for high-value cargo.
“We strongly believe in working closely with our customers. Therefore, it is key for Maersk to also increase our presence in the global air cargo industry by introducing Maersk Air Cargo to cater even better to the needs of our customers,” Chandavoine added.
The Danish company believes that the new stand-alone airfreight service, when paired with its existing panoply of ocean, inland, warehousing and Customs services, will give customers a wider range of diverse supply chain alternatives. Customers are increasingly resorting to a combination of sea and air freight for more time-critical deliveries, according to logistics executives, as a result of the global supply chain disruption observed over the last two years.
Torben Bengtsson, global head of air & less than container load, AP Moller–Maersk, said, “Maersk Air Cargo is an important step of the Maersk Air Freight strategy, as it will allow us to offer customers a truly unique combination of air freight integrated with other transport modes. We see an increased and continued demand for air cargo both today and going forward as well as growing demand for end-to-end logistics, why it is important for us to strengthen our own-controlled capacity and advance further on our air freight strategy.”
The carrier plans to engage in an agreement with the Flight Personnel Union, which is part of the Danish Confederation and Trade Unions, in order to create jobs in the west Denmark region. Billund Airport’s chief executive, Jan Hessellund, stated that the airport is ecstatic to have been chosen as Maersk’s European airfreight hub and looks forward to taking the partnership to new heights.
The company is likely to make additional expenditures on air freight as a result of this move. According to online reports, Maersk has participated in a ‘pre-bid’ to invest in the Jewar airport, which is being built west of Delhi. It’s fascinating to see lines get involved in airport development as well as ports. By their very nature, freight buyers are multimodal.
Maersk has also lately made investments in a number of logistics firms. Visible Supply Chain Management, a Salt Lake City e-commerce fulfillment company; Li & Fung Logistics, an Asian contract logistics and omnichannel fulfillment company; Pilot Freight, a US last-mile specialist; and Performance Team, a North American warehousing and fulfillment company are among the companies it has acquired. It is looking to cover the entire end-to-end chain, but what appears to be missing is a ground handler.
In regards to Maersk’s Air Cargo venture, Dorothea von Boxberg, CEO of Lufthansa Cargo told CargoForwarder, that she doubted shipping lines’ capacity to incorporate air cargo into their wider operations.
“Personally, I see few synergies between the two business segments of sea and air. The proponents probably underestimate what it takes to operate an airline profitably over a longer cycle. It requires a minimum fleet size and high commercial and operational competence to be financially successful,” Boxberg said. “To me, it appears that shipping companies are chartering freighters in response to, and for the duration of, the current capacity squeeze. Shipping companies that operate freighters will find out how tedious the air cargo business is without the involvement of freight forwarders.”
Kalai has always wanted to work in the aviation industry, having been fascinated by its inner workings since he was a child. In pursuit of his dream, he obtained a diploma in aviation management and is currently interning with a low-cost airline, under in-flight policies. In his free time, he loves to engage in recreational activities, and watch sports. In the upcoming years, Kalai intends to pursue his degree at a business school before working as an executive for a global airline around the world.