Panalpina looks to develop charter network

Panalpina is hoping to expand the door-to-door capabilities of its charter network as it celebrates the 25^th anniversary of the product’s launch.
At an event to celebrate the launch of its charter network in 1990, the forwarder’s global head of airfreight Lucas Kuehner told Air Cargo News that by having greater control of the cargo, it could offer a better service to customers.
It would therefore look to continue to develop this element of its charter network.
“The complete service is really what I believe customers are looking for,” he says. “These are really unique solutions because we are in control of their cargo, so that is something we are looking to work with ground handlers and agents to establish protocols for example for pharmaceutical.”
He said that being able to control the cargo from door-to-door means its offering has similarities to that of the integrators, a group of companies that have been grabbing market share from freight forwarders.
“I would admit the integrator model is a significant threat to the freight forwarder model, much more than oceanfreight is to airfreight,” he said.
But he added that the Panalpina’s charter network meant its business model is different to that of other forwarders.
“We offer an integrated freight forwarding service that we offer from door to door,” he said.
“Essentially, we operate an express services of less than 40 hours transfer from Hong Kong to Brazil or at Stansted we can offload cargo and within less than within an hour it’s into a truck on its way to a distribution centre.
“This is the same service level as an integrator and we can only do this because we are in charge of the cargo for so much of the journey.”
Panalpina added a route, Panda Star, between Luxembourg and Pudong with an eastbound stop in Baku to its charter network earlier this year bringing the total number of services to seven.
This year also saw the forwarder return a wetleased freighter to Atlas that was operating on a round-the-world service in favour of scheduled charters.
Kuehner said Panalpina was always looking to add new routes but the decision comes down to the supply and demand situation.
“Today, there is much more freighter supply into markets like Mexico where a few years ago we were the only ones flying there,” he said.
Looking at overall market performance so far in 2015, Kuehner described the situation as flat, although he was expecting a weaker peak season that 2014 levels.
“Europe is doing fine, better than anyone expected,” he said. “Brazil is tough and China has recently been tough.
“The peak season has lifted it a little bit and there the next few days and weeks will indicate what sort of peak season we can expect there.
“The spike that we have seen in the last few weeks has been more related to the golden week. So it will be interesting to see what happens between now and the end of October to see how rates hold up.”
Another major development in the freight forwarding arena in 2015 has been industry consolidation. Just last week DSV announced a bid to takeover UTi in a deal that would create the world’s eighth largest airfreight forwarder.
Kuehner said he expected the integration would keep DSV busy for some time. He added that Panalpina was also open to “bolt-on acquisitions” but wasn’t looking at anything as big as the UTi deal at the moment.
“We are not in the market place trying to grow our marketshare through acquisitions,” he said. “But bolt-on purchases where it fits our growth model in terms of verticals or completes our service to customers; we would be open to that.”