News / Flexport's newly liveried aircraft ready as business looks up

Flexport's first liveried aircraft with Atlas. A second is due to arrive today.

Flexport expects to see its first flight today of a newly liveried aircraft, the second Atlas-operated plane to sport Flexport’s logo.

The 747-400F has been undergoing a heavy check in Taiwan for the past two months, during which time it also popped into the paint shop for a new look.

Flexport is not planning to paint its third aircraft.

“It just gives us a little bit more swap flexibility,” explained Neel Jones Shah, outgoing board advisor to Flexport.

“We swap our livery airplane out for others all the time, but it limits you a little bit, because there’s other customers who don’t particularly like it when the Flexport airplane flies for them. I enjoy it, but they seem to have a problem with it.

“But we are excited to have a sister airplane to join the one that’s already painted,” he told The Loadstar.

Some 18 months ago, Flexport was struggling to fill its three leased aircraft; but times have changed.

“If you look at Shein, Temu, Cainiao, all of these companies, they are buying massive quantities of air freight from a variety of sources. They’re very smart procurers; these guys didn’t fall off a turnip truck yesterday. They know how to purchase capacity. But they also know that this capacity is absolutely vital to their strategy.”

He added that not only were they chartering their own aircraft, but also buying a “significant amount” of capacity from forwarders. “Their own growth depends on their access to capacity and that’s more important to them than securing the absolute sharpest rate.

“I’d say that international ecommerce fulfilment is probably 40 to 50% of every kilo of airfreight out of Asia.”

He added that both airlines and forwarders have enjoyed working with the ecommerce companies: “they are just easier to deal with from many perspectives”.

The new source of well-paying demand has led to changes in Flexport’s previous relationships. It had announced in November a partnership with WestJet, to help with backhaul volumes from Canada to Asia, in particular for lobsters.

“We formed a nice little niche; they would fly their freighter into Chicago, and we’d sit on the ramp right next to each other and transload onto our flight, and then we head off to Korea and Shanghai and Hong Kong and places like that.”

But Mr Jones Shah added that some of the markets for those flights are seasonal. And he implied that the economics are better for Flexport by offering capacity to ecommerce.

“The economics of some of these markets change dramatically. You know, sometimes people will dump a lot of capacity into a market like that, and then all of a sudden the yields halve. Interline arrangements don’t work when the yields get to too low a point. Our relationship with WestJet is fantastic … but at times, the market just doesn’t allow the economics to add up, and so you have to pivot to something else.

“It’s like moving cherries from Chile… Some years it works brilliantly, other years it’s more challenging.”

Mr Johnes Shah said he expected Flexport’s results in air to be good. “I think that 2024 is going to be a pretty good year. The first half is going to look really good, because the comparison is to 2023, which was total crap. The back half of ‘24 could end up being flat in comparison to ‘23, but that still will be a very good year.”