Some would estimate that there are around less than a million unit load devices (ULDs) right now around the globe and the complexity of managing these cargo containers is one that requires in-depth expertise. Whilst larger airlines may have the infrastructure and manpower to manage their own fleets, Jettainer believes that there other ways for smaller airlines to access the same resources, sans the huge costs. Payload Asia had the opportunity to talk to Thomas Sonntag, managing director of Jettainer, as he gives an overview of the ULD market and the advantages of having a reliable partner to take the operational and financial burden of managing these highly in-demand cargo assets.
What are the usual problems of airlines and other air cargo stakeholders when it comes to ULDs? How does Jettainer ensure there is enough capacity at a particular station or air hub?
ULD management is not a core operation for airlines, and many carriers lack transparency about the cost of their in-house ULD operations. But ULD availability remains vital to ensure the delivery of their core service—transporting passengers, luggage, and cargo—as planned.
Airlines cannot keep that promise without the right ULDs in the right place, at the right time. Since there are 900,000 ULDs around the globe, it is clear that managing them efficiently is very complex.
At Jettainer, we steer each customer with a dedicated ULD fleet that is optimized and priced to their exact requirements. We guarantee 100% ULD availability thanks to our network, our unique combination of dedicated teams and leading IT solutions, and our smart pooling approach.
How have customer expectations changed since the pandemic? How has this affected your product offerings and positioning for both ULD management and leasing?
The air cargo and passenger business has been very volatile and will continue to change. What hasn’t changed, though, is that airlines recognize the value of professional ULD management.
The overall ULD market is split: two-thirds of the world’s ULDs are managed in-house by carriers, the remaining third is managed by Jettainer or a market companion. We have identified different needs that we serve with four different product offerings.
First and foremost, demand for temperature-controlled ULDs has changed drastically during the Covid-19 pandemic. Managing this scarce resource is very labor-intensive. We have bundled years of expertise in our cool competence center and our product cool&fly. This service is unique and includes complete order management, control, and positioning of cool containers, as well as monitoring and after-service management. In May of this year, Etihad Cargo intensified our long-standing partnership and adopted our new cool&fly service.
Secondly, we serve startup airlines and carriers ramping up operations or running ad-hoc charters. They cannot invest in a fixed ULD fleet because of inherent uncertainty and fluctuations. They need flexible ULD supply and can benefit from our short-term and long-term leasing product lease&fly.
Thirdly, we cater to smaller airlines with fleets up to 2,000 ULDs. In the past, they did not explore outsourcing this relatively small part of their business. But, in fact, the benefit for them is significant despite the crisis. Without ramp-up time, we take over managing their ULD fleet and help cut operational costs by minimum 20% without compromising on our outstanding level of service—thanks to our plug&fly service.
Last but not least, we take care of carriers with large ULD fleets, which face significant fixed costs. Our product ULD Select handles their entire ULD supply, leaving the carrier to enjoy huge efficiency gains and lasting cost savings.
Were there any adjustments to your old business model, or any investments that you had to make?
We can confidently say that our business model has proven robust, crisis-proof, and of real benefit for our customers. Airlines appreciate our steadfast commitment to top-of-the-line ULD management and the value of outsourcing non-core activities.
Besides our new product offerings, we continue to drive transparency forward. Transparency is the key to efficiency and effectiveness. We shed light on the supply chain and the entire lifecycle of each ULD.
We are, for example, forging ahead with the creation of digital counterparts for every physical ULD in our fleet. These digital twins pool data about every step within the ULD’s lifetime, are the base for automated decision-making, and allow us to optimize the use of each ULD during its lifecycle.
What are the trends that will drive the air cargo industry to better heights?
Again, transparency. The industry lacks transparency and objective measurement standards. Many airlines have been asking for ways to judge operational performance. It is not easy for a single airline to measure its own ULD management performance against their current or potential new service provider.
In cooperation with the international interest group ULD Care, we are fostering a transparency campaign and developing benchmark figures to do just this. The goal is to establish a set of industry-wide key performance indicators, starting with a benchmark for the ULD loss rate.
Secondly, sustainability. Every player within the supply chain needs to look at innovative ways to reduce the aviation industry’s carbon footprint. With skypooling, for instance, we offer a free-to-use platform to share ULDs. Users can resolve imbalances, eliminate empty transports, and return lost or found units—saving time, capacity, and CO2.
Another example is squAir-timber which we offer to the market. It replaces wooden beams and planks with a product made of cardboard fiber that is 80% lighter than wood. A simple and cost-efficient way to lower the airline’s fuel and CO2 consumption, with an extra benefit: this choice eliminates increasing timber shortages and rising costs.
Aside from reducing costs, what other reasons should airlines consider before deciding whether they should outsource their ULD management?
Reducing explicit cost is one thing, but airlines need to avoid hidden costs. A potential loss of quality needs to be avoided. So, the first question is whether the service provider guarantees you 100% ULD availability with a robust business model, long-term stability, and a continuous focus on improving its own efficiency.
Jettainer is fortunate enough to have a strong and stable shareholder—creating continuity, and development opportunities for Jettainer and our customers. We work closely with almost 50 independent repair shops. After all, maintaining and repairing ULDs is the costliest single item in ULD operation besides total loss.
Last but not least, efficient ULD management also helps make air transportation sustainable. As the industry expert, we manage our customer’s ULD fleets so that significantly fewer ULDs are needed, reducing tied-up capital, and storage capacities. Smart control, network synergies, and the use of lightweight ULDs helps us minimize transports of empty ULDs and excess weight—helping our customers save fuel, CO2, and aircraft capacity.
