It’s been only two and a half years since Flexport began operations as an online forwarder, but they have already reached a major milestone by chartering a 747 freighter flight from Hong Kong (HKG) to Los Angeles (LAX). Since we are in mid-November, Flexport is also getting a taste of life for forwarders at peak season, when capacity is scarce and air rates are sky high.
Operated by Atlas Air, the fully loaded 747-400F is scheduled to leave HKG on Sunday, Nov. 19, and arrive late the same evening, local time, at LAX. “We’ve got a team on standby, ready to recover what is now 117 tonnes of chargeable weight off that airplane, to be broken down and delivered to customers on Monday,” said Neel Jones Shah (pictured), senior vice president and global head of airfreight at Flexport.
Since the Atlas widebody is carrying freight for a lot of Flexport’s “key customers,” Shah said he is very excited to be running the forwarder’s first charter. “For us this is a momentous occasion,” he said. “Chartering an airplane is no small commitment. We’re 100 percent laser-focused on making sure our customer’s supply chains are protected. With the backlogs that are occurring in Hong Kong right now, and the scarcity of capacity, we needed to do what was right for our customers in order to keep the supply chains moving.”
Doing the right thing, comes at a price, of course. Shah, formerly chief cargo officer at Delta Airlines, said the going rate for the high-volume, trans-Pacific charter service is now in the US$5 to $7 per kilo range, especially after a wave of recent flight cancellations have taken place in Hong Kong, further tightening capacity.
The cost of Sunday’s charter flight will likely be more than $8 per kilo, meaning the full charge for the Atlas charter will be “well in excess of $800,000,” Shah said. Most of the goods being shipped, however, are high-tech consumer electronics, nearly all of which have been ordered via e-commerce. “Our customer base right now is very heavily concentrated with shippers that produce consumer goods.”
Freighters and charter services are going to be “a core part” of Flexport’s strategy in 2018, Shah said, which can “open up a new revenue stream for the company.”
This weekend’s charter arrangement came together quickly, Shah said, but Flexport may decide to charter another trans-Pacific freighter with Atlas next week. “The next one will be easier,” he added. “From a team perspective, there’s nothing like on-the-job training.”4 - Readers Like This Post