In Good Time: Cut it close, pay a price
From aerospace and energy to manufacturing, the need for mission-critical shipment delivery to avoid line-down situations is a booming market, said Ingo-Alexander Rahn, global head of air freight for DHL-GF. SameDay Speedline provides guaranteed priority lift, 24/7/365, along with monitoring and customized solutions as the key planks of the new offering, he said. In light of the higher service profile and the urgency on the shipper side, margins are juicy. “Given the high levels of service, the yields are appropriate,” Rahn commented.
Paul Martins, CEO of MNX Global Logistics, a firm specializing in time-critical shipments, said cost is rarely an issue when production is threatened. “We don’t call an airline and ask for their best cost. We usually buy the highest service,” he said. MNX has focused increasingly on the high-value life sciences sector, which now accounts for 48 percent of business. “We’re firing on all cylinders,” Martins said. “We do everything from medical equipment to live organs.”
U.K.-based Priority Freight, which concentrates chiefly on time-critical flows within Europe, boosted its revenues from US$14.99 million to $62.48 million in four years, said Stuart Stobie, group sales and marketing director.
“Nobody plans to have a problem in their supply chain,” Stobie said. Hence the majority of Priority Freight’s clients do not formulate contingency plans for emergency logistics. They accept the need for time-critical service when this occurs but do not budget for such a contingency for the following year, he remarked. “It’s a necessary evil. We offer a cost-effective way of repairing the supply chain.”
IAG’s Critical service, which is available across the carrier group’s network, offers guaranteed capacity up to the maximum operating limit of the aircraft. It was developed on the basis of IAG’s express product, using input from clients that had unusual requirements, Johnson said. Loading and transfer processes are identical to the express offering, but acceptance and delivery times were tightened and dedicated check-in desks were installed at IAG’s hubs in London Heathrow and Madrid. Critical shipments are also closely monitored and expedited through hubs by special teams.
IAG moved more than 650 shipments on Critical during the first four months after the launch, ranging from aircraft parts and auto parts to oil and gas equipment, Formula One racing car tires and perishables, including one consignment of tuna that was carried from Mauritius to California.
At time:matters, most of the business is focused on the B2B sector, which faces intense competition for expediting products to the global market. “Cycle times are shorter, supply chains are more international, disruptions happen more often,” said Franz-Josef Miller, managing director of time:matters. “We have had enormous growth because supply chains get faster and people want stuff faster.”
Revenues for time:matters (€65 million in 2015) may seem modest compared to the €2.3 billion that Lufthansa Cargo tabled for that year. However, time:matters’ revenues grew in excess of 300 percent over ten years, Miller said, and margins are a lot better than in the overall cargo sector. He said he expects to see growth between eight and 10 percent in 2017. “We’ve seen good development across our entire portfolio,” Miller added.
Inevitably, some verticals will play a more prominent role. “We see DHL SameDay Speedline as a multi-sector product offering that is especially attractive for aerospace and aviation, automotive, technology, energy, marine logistics and life sciences industries, including temperature-controlled, dangerous or out-of-gauge goods,” Rahn said.
