UK retailer to launch air cargo operation in response to capacity crunch

UK-headquartered online retailer The Hut Group (THG) will charter two cargo aircraft and launch a partnership with Singapore Airlines in order to secure scarce air cargo capacity.

THG said that since the start of 2020, it had been running successful trials, using dedicated cargo flights to service its global operations, especially across the Asia region.

By the end of October 2020, THG plans to have purchased two of its own cargo planes, which a spokesperson said are likely to be A330-200s, branded with the THG Air livery, operating out of Manchester Airport, where THG has its headquarters.

Meanwhile, it will also charter more than 100 flights from Singapore Airlines.

A spokesperson for the airline said the charter flights will be operated by Singapore Airlines aircraft and will be mainly B787 and B777-300ER passenger aircraft, exclusively chartered as passenger flights carrying cargo only.

The spokesperson added that the period that the flights will take place is April-June 2020 and the main routes will be Singapore-Narita, Singapore-Incheon and Singapore-Taipei.

The beauty and lifestyle retailer explained the partnership with Singapore Airlines will remove its reliance on bellyhold capacity scheduled passenger services, swathes of which have been axed in response to the coronavirus outbreak.

“This is in response to both recent unprecedented disruption across the airline industry and THG’s strong international sales growth,” the company said.

“The success of these trials has provided THG with the confidence to embark on this new partnership with Singapore Airlines and for THG to go a step further and announce the launch of THG Air,” the company added. 

The partnership with Singapore Airlines comes as THG continues to expand its global distribution centres.

In recent months, THG has opened three new centres opened in the US, Singapore and India. A further six overseas distribution centres are planned before the end of the year. 

THG founder and chief executive Matthew Moulding said: “The recent disruption across the airline industry has brought huge challenges in the movement of goods across the globe.

“This led us to accelerate our trials for dedicated cargo planes to link together our own global manufacturing and distribution centres.

“These trials have proved a great success, resulting in today’s partnership with Singapore Airlines. The trials have also given us the confidence to supplement this partnership with the launch of two of own cargo planes, under the livery of THG Air.  

“The partnership with Singapore Airlines places us in the strong position of having secured routes from the UK to Asia for the foreseeable future, enabling us to keep our supply chain moving and delivering goods – including essential items such as vitamins, personal care and hygiene products. ”

Sherine Teo, vice president of digital and e-commerce logistics, Singapore Airlines, said: “We welcome this partnership with THG, which facilitates the movement of goods across Asia and supports global supply chains. This collaboration will leverage Singapore Airlines’ flight network to ensure timely and efficient supply and delivery of THG goods to its customers.” 

The move is not unprecedented amongst online retail brands: Amazon and Alibaba also have their own air cargo operations to allow them to meet customer demand for quick delivery.

However, THG’s move is significant, as it is a much smaller business than the two retail giants. Its sales totalled £916m in 2018, compared with revenues of $233bn at Amazon and $40bn at Alibaba.

It raises the question as to whether the capacity crunch and disruption created by the coronavirus could push other online retailers to launch air cargo operations as they need a slick supply chain operation in order to meet customer demand for quick delivery.

THG now operates 178 localised websites, retailing goods in 169 countries.Its brands include: Lookfantastic, SkinStore, MamaMio, Beauty Expert, ESPA, SkinCareRX,  Glossy Box, Recreate Yourself and Grow Gorgeous.