News / Challenge: an 'integrator of complex cargo' with pick 'n' mix services

Photo: Challenge Group

Forwarders wanting to offer customers complex verticals don’t need to invest in expertise themselves,  just call us, says Liege-based air company Challenge Group.

Challenge, an “integrator of complex cargo”, with end-to-end capabilities, is a one-stop shop for any and all types of customers,” claims group CCO Or Zak.

“Forwarders are asking for this kind of service,” explains Mr Zak. “Why? Because the verticals are so complex that you need specific tools and expertise.

“If you are a freight forwarder who would like to start to handle aircraft engines, there’s a lot in it, and if something goes wrong, there’s a big cheque behind it.

“So, you can go and offer it to your customers, but you don’t need to invest the time, you can gain access quite quickly to the sector if you are utilising our services. And it goes with any vertical.”

Mr Zak continues: “Our focus is on special cargo, dangerous goods, automotive, live animals and so on. So that’s one end of the business. The other is the end-to-end solution, offering customers more than just the port-to-port service. So anything to do with road feeder services, custom clearances, documentation, repacking, labelling, screening, consolidation, de-consolidation, any ancillary services they might need.

“In order to do all this, we had to build our capabilities. So, hopefully by the end of this five-year strategic plan, the idea is to give the customers stability in their supply chains through the different subsidiaries of the Challenge group, so whether that’s the airlines, Challenge Handling, Challenge Logistics, which offer all those auxiliary services, or the latest addition, a line maintenance company.”

All the divisions offer services to third parties, as well as “base customers”. But as transport and logistics companies increasingly expand into new ventures, flush with Covid cash, concerns over neutrality are growing. Could that hamper the one-stop shop venture?

“Obviously, it’s not going to work for everyone,” admits Mr Zak.

“We were always quite selective in terms of the customers or, let’s say, the airlines that we are working with. And if you look at those airlines’ networks at the moment, they complement ours. A lot of the airlines we are handling in Liège’s core networks lie in Africa, where we don’t have a presence. So, interline agreements help them to complement their network, and vice versa.”

And if you wanted to turn into an integrator of complex cargo, with end-to-end capabilities, it would make sense to hire a FedEx veteran – which is exactly what Challenge Group has done.

Nearly six months into the role of group chief operating officer, David Canavan, who boasts a 33+ year career at the US integrator, latterly with eight years in Europe, seems to have settled in.

Mr Canavan explains that Challenge Group offers modular services; “a pick ‘n’ mix selection”. He says: “I think one feature is that we don’t force anyone; they can choose if they only want handling, or road feeder services, or logistics services – they can pick and choose.”

Challenge has set itself up as a full-service provider across several companies.

“The intent is that we’re the integrator of complex cargo. So, our logistics team works on the first mile, like line haul to the airports, then we have our handling operation, then we fly the traffic and then have to get customs clearance and final-mile truck delivery into final-mile networks.

“The pieces we own and operate are the airline, the handling agents and the brokerage; and then we work with partners to do the line haul and trucking delivery.

“We’re putting track and trace capabilities on the vehicles. So it’s literally like you become the integrator of the complex cargo. And I think it’s probably a unique model.

“There are lots of integrators out there, but for complex cargo, aircraft engines or cars, it’s a new dynamic. But it’s a modular solution, so we’re not going to sell everything as integrated.”

More than half the cargo handled by Challenge has “some sort of combination of the door-to-door services”, he says.

Challenge does, perhaps, have limited geographical span, however.

“We are actually actively engaged in looking at a strategy for the US market, and also in Asia,” says Mr Zak.

“To replicate the model we’ve built, in Asia all you need is an airport, a handling facility and good systems. It doesn’t need anything unique, but you need good cargo operations, with fewer curfews so you keep the airport open and operational, of course. And there’s a lot of airports in the US that have potential.

“But ideally, you’d lift up Liege and put it into other continents,” he jokes.

Liege, the Challenge executives agree, works because of the “regulatory bodies, customs, the region – they are there to support and aid trade in Liege”.

Meanwhile, the group is expanding its fleet. In February, it added a 747-400F and will add three more 767Fs in June and July. Four 777Fs will also join the fleet, bringing it up to 12 freighters by 2026.