United Cargo equipped for a new era
17 / 11 / 2013
A MAJOR MERGER and switching to an entirely new IT system must be two of the more stressful things that a company has to deal with, so imagine what it has been like for United Cargo in the past eighteen months having to deal with both.
The merger between United Airlines and Continental was formalised in October 2010, but it has only been recently that the United Cargo team have finished dealing with the details, such as renegotiating supplier contracts.
Meanwhile in July it cut over from its old legacy system to a next generation Mercator one, which it has dubbed United Cargo 360.
Oh, and it was also one of the first airline cargo departments to have the B787 Dreamliner to get used to, a process interrupted when the Federal Aviation Administration (FAA) grounded the aircraft from 16 January to 19 April for safety checks.
So a busy year, then, and as it draws to its close United Cargo’s president Robbie Anderson, is looking forward to getting back to a focus on ordinary business activities.
He admits that with all the challenges of the past year and a half, United Cargo took its eye off the ball a bit on the sales side, leading to a loss of several per cent in market share.
“We have not always been able to run the business as we would like, but now we are getting out there and seeing customers and starting to see our quality of service improve. We have a target to recapture US$100m of revenue in the next 12-18 months.”
On the merger front, United Cargo moved quickly to combine operations – it had co-located most of its handling operations within the first year, for example. But as ever the devil is in the details. Anderson points out that once co-located many handling contracts still need to be renegotiated, replacing two agreements with one.
In some cases new suppliers had to be found because the existing ones did not have enough space to handle the merged carrier. In all, he says, 32 vendor agreements had to be changed as a result.
The merger also affected the implementation of the new IT system. United has taken both the SkyChain cargo system and Rapid revenue management suite of Mercator, and was originally supposed to go live with them in 2012.
But the carrier felt this was too much of a stretch, and instead opted to delay cutover until this year.
While it waited, it decided to integrate the existing Continental and United systems to give customers one interface and one point of contact.
This took place on 1 December 2012, and so meant the company had to go through two system changes in seven months. But Anderson says it was worth taking the extra time to get the Mercator implementation right.