News / AF-KLM Cargo gets back to business after cost cuts, with major investment in ecommerce sorting facility

Following three years of cost-cutting exercises, AF-KLM Cargo is ready to build again, with the opening of a new sorting facility at Schiphol Airport marking the first of many new investments.

The new sorting system is designed to handle post, express, as well as some pharmaceutical consignments, and will process more than 2,000 items per hour – equal to 100 tons per day or 35,000 tons annually.

Speaking at a ceremony launching the system, chief executive of KLM Pieter Elbers said investing in cargo was integral to the carrier’s business.

“We need top-notch facilities to maintain a strong position in the cargo business,” said Mr Elbers. “And this facility represents just that – it is a transition from the old to the new.”

Executive vice president of AF-KLM-Martinair Cargo Marcel de Nooijer said the new sorter would help the carrier “do more work with less staff” making the airline more competitive.

“The new facility is about us investing in ecommerce, and it will be fully operational by the end of August,” said Mr de Nooijer.

“Since September last year we have seen a significant change in the industry with all KPIs [key performance indicators] pointing in the right direction, largely driven by ecommerce.”

Mail, pharma, and express shipments at KLM have roughly doubled since 2010, now accounting for approximately 25% of the carrier’s total cargo movements.

Mr de Nooijer said the plan was to increase that share to 30% but said the facility had the capacity to double its current output and handle 32,000 express tons and 32,000 tons of pharmaceuticals.

Though the decision to build this facility was driven by the airport requesting the old facility back to increase its passenger terminals, Mr de Nooijer said it presented cargo with an opportunity.

“The passenger expansion provided us with the incentive to invest in this new facility rather than seeing cargo lose out to passenger terminal expansion,” he said.

“We could not grow in the old facility [which will be demolished on 24 July] whereas with this centre we will be able to expand the express operations, which is where we see growth.”

Present at the opening ceremony was director general for enterprise and innovation at the Ministry of Economic Affairs, Bertholt Leeftink, who said he was impressed by the “huge” sorting facility.

“Cargo plays a major role in the Dutch logistics market and KLM has added a new, reliable, and efficient system,” said Mr Leeftink.

“This hub makes the Netherlands an attractive destination for potential logistics customers and provides the key priorities for pharmaceutical transport: safety and security.”

Mr Elbers also praised Mr de Nooijer for persuading the carrier to go ahead with the construction of the sorting centre, which cost “tens of millions of euros” – with the Chinese steel required costing €12m alone.

“When we took the decision to build, around 18 months ago, cargo volumes were still weak and showed little sign of growth,” said Mr Elbers.

“Marcel told us we needed this for our future, and I am glad he convinced us, as we believe we can now compete properly, with the facility forming a bigger part of the change in the company.”

While the carrier has undergone a process of staff reduction in the cargo business, Mr de Nooijer said it was starting to build this back up again.

“We have reduced a lot of cargo staff in the last few years but we are now at the end of this process and starting to build again,” he continued.

“The staff displaced by this new facility will also see themselves moved over into different roles.”