Berlin, Germany-based Zeitfracht, with insiders better known for road feeder services, is building an air network for small and low-weight express packages. The plans, presented by Managing Director Wolfram Simon (37) to CargoForwarder Global in a one-on-one meeting, are in a well-advanced stage.
Zeitfracht who? The Group’s name became more prominent lately in connection with their tender to buy the insolvent Air Berlin Technik and the carrier’s freight subsidiary Leisure Cargo, which has
never been part of the insolvency assets of Air Berlin. The Leisure deal was successfully concluded some days ago while a final decision on the technical unit of AB is still pending. Until
Zeitfracht threw its hat into the ring to purchase some of AB’s assets, the company which was founded in 1927 (!!) hardly ever produced any noteworthy headlines. Rather unfairly, because the
Group belongs to the founders of package delivery company DPD and operates 335 trucks, making them one of the major road hauliers in central Europe.
Road transports face increasing disruptions…
However, times for road feeder services are getting constantly tougher due to the permanent traffic increase, converting German Autobahn’s frequently to some of the largest parking lots worldwide. The bad news is that official projections forecast a rise of road freight transports by 34 percent by 2020, making things even worse. Zeitfracht Chief Wolfram Simon is well aware of the foreseeable consequences this development will have for his business, warning: “In about five to seven years, deliveries of time critical express goods sent via road will no longer be viable.” Full stop!
A key lesson his management drew from this looming development is to create new business opportunities by enlarging the product portfolio. Once accomplished, Zeitfracht not only hopes to widen its reach but protect the jobs of their roughly 1,000 staff.
… and unpredictable delivery times
The company’s approach is based on the consideration that flying small and light express packages makes more sense and benefits customers more than trucking them all across Europe, risking delays and unpredictable delivery times.
The capacity for airfreighting large numbers of items is there, Wolfram argues, since the lower deck compartments of many aircraft operating on domestic German and even trans-European routes are underutilized. This accounts for low cost and legacy carriers alike, who don’t make an extra buck by flying nothing but air in their holds. “They are forced to meet very short turnaround times to make their business models work,” he says. “Through the acquisition of Leisure Cargo we’ve got the right tool for guaranteeing seamless transportation und stable operations and also to market the airlines’ belly-holds.” He added another important aspect to this: “We have got a considerable client base and we cooperate with a reputable number of partners on the first and last mile, like the package delivery company DPD,” he briefly outlines the basics of his concept.
Blending external ….
His vision of utilizing external capacity is complemented by efforts to manage the lower deck compartments of aircraft operated by his own company. For doing so, Zeitfracht purchased the Cologne-based WDL Aviation only a few weeks ago, this way acquiring four BAe 146 passenger aircraft. “Within the framework of our services we lease them to carriers with urgent demand,” explains Wolfram. He adds to this that his company intends upping the WDL fleet by purchasing two to three 100-seaters very soon, most likely stemming from Bombardier’s C-Series. The formal requirements are fulfilled with the German regulator Luftfahrt-Bundesamt (LBA) having transferred last Monday WDL’s former AOC to their new owner Zeitfracht.
With six or seven own passenger jets belonging to the agent’s assets, although operated on behalf of carriers like Air France or Brussels Airlines, for example, “the foundation is laid for airfreighting express consignments on our own account.” Leisure Cargo’s role will be, among others, to sell the lower deck capacity of the WDL aircraft to the express market and manage the entire flow of the goods from A to Z, illustrates Mr Simon.
Once done, a cornerstone for establishing an intra-European network for carrying small and low weight express shipments by air would be have been laid.
… with own capacity
However, Wolfram’s plans go even further, taking the next step by using WDL as production platform for enlarging his company’s own product portfolio. It’s a non-asset approach, integrating external aircraft belonging to low cost carriers into the WDL fleet and operating them on behalf of their proprietors. “We are in advanced negotiations with a number of airlines,” he indicates, without revealing any names. In case of an agreement, Zeitfracht subsidiary Leisure Cargo would manage the entire lower deck capacity from the providers of the aircraft, no matter if low cost or legacy carrier.
Mr Simon indicates that the approach helps both sides. Most airlines are under extreme pressure to tap new sources of revenue, he says, playing into his company’s hands. In case of budget airlines “it is paramount that our approach to utilize their holds complies with the carrier’s very strict turnaround times,” he emphasizes.
The bucket tool
The tool for doing so is a stackable crate of the size of a wash basket, easy to fill with shipments, load aboard an aircraft and unload after arrival within minutes. “We were the first ones that have developed swap bodies, now we invented this new box for fast processing express freight.” He adds to this that a patent application has been made with a final approval still pending.
Asked about expected volumes that could justify setting up a European express network he is extremely confident. “A Berlin study showed a daily amount of 10 tons of light and small express shipments, of which 7 tons were sent to intra-German destinations and 3 tons to consignees located somewhere in the EU.” Beside Berlin there are other clusters producing and forwarding large numbers of time-critical shipments day by day such as Hamburg, Frankfurt, Munich, Stuttgart or the Rhine-Ruhr area.
LC is not for sale
So a lot of work to come for Zeitfracht Luftfahrt Holding GmbH and their two subsidiaries WDL Aviation and total cargo management provider Leisure Cargo. “In view of their upcoming workload we are determined to further invest in Leisure Cargo,” Wolfram stresses. “I can assure that reselling them is not an option for us,” he declares. In addition, he says that Leisure will soon move their company’s headquarters from Dusseldorf to Frankfurt.
Further the manager indicates that he intends to acquire a digital platform offering consumers to merge online and offline shopping via smartphone or other electronic data transmitters. The negotiations are still ongoing but should the deal be sealed all it needs to step into the social shopping world is downloading an app to get the data required for same-day deliveries, be it B2B, C2C, B2C or other forms of business relations, manager Simon illustrates. Looks like the times are over when air freight was a people’s business. Thanks to machine-to-machine data transmissions it has meanwhile created its own digital universe.
Zeitfracht expects sales in the region of €220 million in 2017. After having re-established in 1947, following WW2, they have not ended a single year in the red, MD Simon stresses. The company is headquartered in Berlin, Germany.