News / Shipper's logistics arm widens its focus and invests in airfreight

© Jayjaylagi

Yet another forwarder has decided to invest in an airline in a bid to reinvent itself as a comprehensive logistics business, encompassing shipping, land transport, and air freight.

Following in the footsteps of other increasingly diverse groups which are blurring the lines between shippers, forwarders, and carriers, such as CMA CGM and Maersk, this new investment will see an automotive company’s logistics department widen its business.

Hyundai Motor’s logistics company, Hyundai Glovis, is increasing its investment in a fund to help Air Incheon’s KRW470bn ($342m) takeover of Asiana Airlines’ cargo business. The fund was set up by Air Incheon’s majority shareholder, Socius Private Equity.

Glovis yesterday said it would bring up its contribution to $145m, giving it a 45% share of the fund. Last August, Glovis announced it intended to contribute $109m to the fund, amounting to a 35% stake.

In raising its investment, Glovis has included a condition giving it priority purchase rights should the integrated Air Incheon be sold.

Asiana is hiving off its cargo business, including 11 freighters, to satisfy antitrust authorities, after the struggling airline was sold to Korean Air Lines.

Air Incheon, South Korea’s only pure cargo airline, hopes to complete its takeover of Asiana’s cargo unit on 31 July and launch the integrated business on 1 August.

Glovis, known for its car-carrier operations, is steadily expanding its air transport business.

This month, it will open a  44,420sq metre logistics centre at Incheon International Airport. It will handle an average of 25,000 tonnes of air cargo a year for five years after opening.

In 2020, Glovis established an air forwarding agency at Frankfurt Airport in Germany, and is expanding this to airports such as Vienna, Atlanta, and Chennai.

Glovis, which depends on Hyundai Motor for almost 70% of its revenue, wants to increase its third-party business. Last September, Glovis signed an agreement with China’s BYD, the world’s largest EV maker, to ship its cars and automobile parts.

Now, Glovis’s advancement into air cargo mirrors a wider trend in the shipping industry, where container carriers moved into air freight to tap into increased demand going back to Covid.

In February 2021, CMA CGM opened its air cargo division and ordered eight Airbus freighters. And in April, the French carrier widened its air cargo business with the purchase of Air Belgium’s cargo operations.

MSC opened MSC Air Cargo in 2022 to complement its seaborne business. In August 2023, MSC took over Italian cargo airline AlisCargo Airlines to operate its own aircraft and strengthen its presence in key markets like Europe.

In 2022, Maersk returned to the air freight market with the establishment of Maersk Air Cargo.