Connecting the dots

From medical vaccinations to the latest smartphones, luxury household goods and motor vehicles, there will be very few people that haven’t used a product that at some point has been delivered by aircraft. While it is estimated that only around one per cent of the world’s exports by volume utilise aircraft for mass transportation, because they tend to be expensive goods they account for as much as 35 per cent of global trade by value.

Improvements in world trade in recent years have corresponded with growth in air freight demand. Data released by the International Air Transport Association (IATA) in May 2017 for global air freight markets showed that demand, measured in freight tonne kilometres (FTKs), grew 12.7 per cent compared to the same period in 2016. This was up from the 8.7 per cent growth recorded in April 2017, and is more than three times higher than the five-year average growth rate of 3.8 per cent. The outlook for the industry is also very positive, with demand expected to grow at a rate of eight per cent for the rest of 2017.

“The largest part of our business is air cargo, and air freight volumes have been on the rise for several years now, though we have seen a much steeper growth curve since early 2016,” begins Frantz Wallenborn, Chief Executive Officer of Wallenborn, one of Europe’s largest air-cargo road feeder services (RFS) operators. “Air freight gives firms greater flexibility due to reduced delivery timelines, hence companies are moving in that direction to gain the ability to restock quickly when required.”

With a presence at more than 120 airports in central Europe, Wallenborn’s modern fleet of more than 800 vehicles give it the continent’s most extensive RFS network. “When it comes to air cargo, one typically finds that it tends to fly into a very select few major airports, with long haul flights often consolidating and concentrating on these major gateways,” explains Wallenborn’s Commercial Director, Jason Breakwell. “It is the RFS providers that help connect the dots in getting goods either from the initial location to one of these airports or to their intended destination.”

In financial terms, Wallenborn has evolved considerably, consistently growing yearon- year. “This year alone we have actually witnessed growth of 18 per cent, which has come as a result of a combination of growing world trade and targeted actions taken by the company,” Jason continues. “Confidence across Europe, even in the Southern countries, is proving to be stronger than it has in some time and increased GDP is beginning to translate into improved consumer spend and trade. This is also coinciding with a shift in the balance between imports and exports in China, with demand for brand name quality products at an all-time high, and the consolidation amongst sea freight providers, which has pushed up costs and made air freight more competitive.

“Over the course of the last three years we have positioned ourselves ideally to capitalise on the growth experienced within the RFS market by developing a range of specialist products and services. Of these products, three have been particularly successful. One is designed and validated specifically for the healthcare sector, while our Secure product helps us to provide a secure transport service for vulnerable cargo and our Outsize offering caters for the safe and secure transportation of outsized cargoes including aero engines, helicopters, fuselage sections and turbines. These are all industrial sectors that we, through the vision of our CEO, have purposely targeted in order to benefit from expected and realised growth, and because they are made up of customers who demand reliability and consistency, and continue to value quality over cost.”

In line with its own growth expectations, Wallenborn has made a significant investment in its assets and fleet in recent times. “We have acquired a total of 78 new trucks and 114 new trailers, including 12 bi-temperature trailers, in the last 12 months alone,” Frantz states. “This represents a large investment, but a necessary one that has been made for two main reasons. First, quality has always been our number one priority and in order to deliver quality, we need to have great assets. For this reason, I have always prioritised the upkeep of the fleet, and part of that means retiring older vehicles and replacing them with new ones. Secondly, demand is continuing to increase, so we are taking pre-emptive moves to ensure that we can provide additional capacity to service our clients.

“The introduction of these new trucks also now means that 100 per cent of Wallenborn’s trucks that drive internationally are fully compliant with Euro 6 emissions standards. As a transportation company, we accept we have an added degree of responsibility when it comes to taking appropriate measures that will reduce our environmental impact. The Euro 6 diesel engine, which our new trucks possess, has the highest possible level of carbon dioxide savings, with permitted nitrogen oxides reduced by 75 per cent compared with the Euro 5 standard.”

While making up a relatively small proportion of its new trailers, the acquisition of 12 bi-temperature trailers is also a significant boost for Wallenborn’s fleet capabilities. “Back in 2013, Wallenborn became the first RFS provider in Luxembourg to become Good Distribution Practice (GDP) certified,” Frantz says. “So, while we are by no means new to temperature controlled transportation, being able to offer our customers bi-temperature trailers is a brand-new service for the company. The bi-temperature allows us to transport goods at two different temperatures simultaneously. This is made possible through an adjustable and dividing wall within the trailer itself. The advantage for customers is that this allows them to send different products using only one truck, when in the past two would have been required. Obviously, this means large cost savings for the customer. It also means that the transportation of goods becomes more environmentally friendly and helps to solve some of the capacity challenges we face today.”

When discussing his CEO, Jason makes a point of referring to Frantz as a visionary. In addition to suitably preparing his company to capitalise on the growth he correctly envisioned occurring in key market sectors, Frantz also has an eye trained firmly on some of the other emerging issues that could influence the RFS industry significantly in the years ahead. One of the trends he is most conscious of is the introduction of new laws and legislation that have come into play across Europe which, amongst other things, have had an effect on driver minimum wage, accommodation restrictions, required documentation and driver registration cross country.

Frantz’s concern, aside from the effect that such changes could have on businesses, is whether or not these changes will help accomplish what the original 1996 EU Directive set out to achieve. “The purpose of the 1996 EU Directive was to address social dumping, and the laws implemented to give effect to the Directive are, in essence, protectionist laws for respective countries,” he describes. “Whilst social dumping is, of course, undesirable, there has been little to no collaboration between Transport Ministers to find practical solutions to the problem. For example, many countries now require all foreign transport companies’ drivers to be registered in their country, sometimes as frequently as bi-annually. This results in enormous costs in terms of time and labour, something smaller companies are unable to absorb, which will lead to further capacity shortages. Larger companies, meanwhile, are forced to pass on these expenses to clients, therefore I must question whether it would be more practical to have a single, central EU database that all countries could access.

“Similarly, today there are major discrepancies from one country to another regarding the requirements a company needs to adhere to, prior to even being granted a transport license. Luxembourg, for example, requires businesses to show proof the company is ‘real’, proof of vehicles, driver employment and more before being granted a truck license. Other countries distribute licenses freely, with only proof of insurance in place of a bank guarantee. If governments really want a level playing field, and to tackle social dumping at its roots, then I believe there is much room left for discussion, debate and improvement, and it’s important we start having those conversations.”

It is this sort of forward thinking that has seen Frantz nominated as one of four finalists for the Entrepreneur of the Year, Western Europe, Transport and Logistics award at the European CEO Awards. “If I am honest, the news came as a big surprise, but a very pleasant one of course,” he comments when asked about his nomination. “To be nominated for this award is truly a great honour and, even though I am being recognised as an individual, I think this is really testament to, and a reflection of, the great team I have at Wallenborn.”

With the company expecting growth in air freight to continue for the foreseeable future, its focus remains on its first priority, and that is to help its customers to grow. “Our customers are incredibly loyal to us and the reason we work so hard to develop new products is to ensure that they grow their share in tandem with us,” Jason enthuses.

“Wallenborn has always enjoyed a good reputation for quality and customer care, and I want this to always be our focus,” Frantz concludes. “I would also like to see us take on more of an advisory role for our clients to help shape the way the market develops, and to allow for mutually beneficial growth opportunities. In the past, our growth has come through both organic and inorganic means, and I would predict the same for the future, possibly even beyond Europe. Finally, sustainability is and will remain an important issue at Wallenborn, and we will continue to take steps towards reducing our environmental footprint.”

Wallenborn
One of Europe’s largest road feeder services (RFS) operator
Significant investment in trucks and trailers
All its internationally driving trucks are Euro 6 compliant