In less than five years, IMPERIAL Air Cargo has captured around 50 per cent of the market share in overnight express airfreight services in South Africa. Ben Sansom reports.
IMPERIAL Air Cargo is a specialist in overnight express airfreight services within South Africa, and operates as part of the Integrated Services division of IMPERIAL Logistics, alongside other companies such as e-Logics, IMPERIAL Security Services, Megafreight, Paltrack, Pragma, Volition and IMPERIAL On-line.
The history of IMPERIAL Air Cargo says a great deal about the changing market landscape in South Africa, and the ability of companies in the private sector to take on the large government-run institutions, competing in the same space. More than that, IMPERIAL Air Cargo has developed a thriving business exploiting opportunities in this expanding marketplace.
All of this has been achieved in a remarkably short period of time. The company was launched less than five years ago as a joint venture between IMPERIAL Holdings—the parent company of IMPERIAL Logistics—and Comair, which operates the local and regional services for British Airways in South Africa, as well as a low-cost airline, Kulula.com. IMPERIAL holds a 70 per cent interest in the venture and Comair owns the remaining 30 per cent.
Perhaps the most interesting factor of the joint venture is that it was originally launched as a project to test the feasibility of competing in the regional air cargo market sector against the cargo division of the national air carrier South African Airways.
The company began operating in August 2006 and the experiment has proved very successful. In just under five years, IMPERIAL Air Cargo has cornered an approximate 50 per cent share of the internal South African overnight air cargo market. Moreover, it has made this impressive achievement against a backdrop of global economic recession, with shrinking markets and associated risks.
When operations began in 2006, however, the domestic market was expanding rapidly, growing at a rate of 10 per cent per annum. The strategy was to operate scheduled overnight domestic services between the major regional airports with an initial targeted market share of 25 per cent and growing this to a 45 per cent share of this market segment.
IMPERIAL Air Cargo’s business model was to outsource all the warehousing, cargo handling and other activities to trusted subcontractors, and to lease the aircraft and crews that would operate the service. Over the intervening years, IMPERIAL Air Cargo has established a reputation for quality service, reliability and attention to detail. “IMPERIAL Air Cargo management team and staff have a strong focus on being involved, having transparent communication and client relationships and operational excellence as key drivers,” says Muriel Sahd, MD of IMPERIAL Air Cargo. Today, it operates as a dedicated freighter service provider into the domestic and regional cargo markets. The company works from a head office in Kempton Park, Johannesburg, and has six branches across South Africa, located at the airports of Johannesburg, Cape Town, Durban and Port Elizabeth and at two road feeder destination warehouses located in East London and George.
By 2009, however, the business had grown to such an extent that a strategic decision was made to bring all the warehousing, administration and cargo handling under the control of the company. Today, IMPERIAL Air Cargo employs some 68 staff across its branches and headquarters, and has implemented a series of internal processes by which it is able to provide reliable, cost effective and flexible overnight air freight solutions. Dedicated well-trained staff, empowered to make decisions, are available 24 hours a day, seven days a week, to answer questions, provide information and fulfil service requirements.
The company currently operates via a leased air fleet of three aircraft consisting of a B737-300F, along with a B737-200 and a B727-200. The B737-200 can typically carry up to seven pallets or containers on its main deck which has a capacity of 2,760 cubic feet, in addition to which the lower forward compartment has a capacity of 370 cubic feet. The low aft compartment has a capacity of 1,505 cubic feet. Meanwhile, the B727-200 can carry up to 12 pallets on its main deck, which equates to a capacity of 6,357 cubic feet. Its lower forward compartment can house a load of 710 cubic feet and the lower aft compartment 815 cubic feet.
In common with its parent company, and with many others operating in South Africa, IMPERIAL Air Cargo believes that its future success and sustainability are interlinked with promoting the goals of Broad-Based Black Economic Empowerment (B-BBEE). Made fully operational in 2008, the scheme was instigated by the South African government in 2004 and designed specifically to distribute wealth across as broad a spectrum of South African society as possible.
In November 2009 the B-BBEE certification agency—NERA, or the National Empowerment Rating Agency—verified IMPERIAL Air Cargo and the other companies within IMPERIAL Logistics as Status Four Contributors, in a ranking that has eight levels, the highest being level one. The company also scored very well in other areas, and qualified as a value-adding supplier with an enhanced procurement recognition level of 125 per cent.
Now that the business is well established, IMPERIAL Air Cargo has set its sights on giving back to the local communities. In March 2011 it launched a series of corporate social responsibility (CSR) programmes in the cities of Johannesburg, Cape Town, Port Elizabeth and Durban. “We apply a hands-on approach to nurture sustainable community development,” the company said. Staff are expected to embrace a strong self-development focus, by undertaking projects that make a difference in the lives of local communities, whether that is education in nature, or providing food and warm clothes for the winter months.
Among the most recent beneficiaries of the scheme are the Tsoaranang Children’s Home in Finetown, Johannesburg which has received new shoes, warm jackets and food for its orphans. Other projects include the Eludini Home for the disabled in Danoon, Capetown, the Casa Caritas Home for the disabled in Johannesburg, Ethelbert Children’s Home in Durban and Emmanual Haven Pre-Primary in Port Elizabeth. All of these beneficiaries have received items and equipment that they have identified as a requirement to make a change in their day-to-day lives.
IMPERIAL Air Cargo has achieved a great deal in less than five years in operation, “Going forward, we will focus on expanding our service offering to our customers in terms of more value added services, as well as new services,” says Sahd. And with the global economic situation improving rapidly, the future certainly looks very bright.
