Adapt and thrive

NNR Global Logistics UK, part of Japan’s US$4 billion Nishitetsu Group, is looking to stay one step ahead of customer demands in a challenging business environment both by expanding its airfreight portfolio and through further investment in talent and subject matter experts

Head of airfreight development Lionel D’Silva says that, like all logistics partners, NNR was busy during Covid.

“It became more complicated to move products because of different countries’ Covid policies, but logistics providers found ways to help customers reach their markets,” he explains. “The high demand plus the logistical complexities meant that prices for transporting goods – whatever the mode – rose.”

One instance is that the war in Ukraine has affected oil prices, and airlines are also having to carry more fuel – and less cargo –to avoid overflying Russian airspace.

Now: “In the new year, cargo volumes are dropping, capacity availability is increasing and rates are coming down to pre-pandemic levels,” D’Silva says. “Consequently, revenues are falling for airlines and logistics providers alike.”

This drop is partly due to the cost of living crisis: consumers are not buying as much, so there is less demand, whether for individual e-commerce shipments or bulk retail orders. In addition, the market has been flooded with passenger capacity to serve pent-up travel demand in the wake of Covid. This results in double pressure on airlines and logistics providers: both low cargo demand and high cargo capacity cause prices to fall.

The upshot is that carriers and logistics providers are chasing a shrinking volume of cargo; airfreight is a congested space these days.

Hybrid hustle
Noting that NNR is a large organisation dating back to 1908, moving millions of kilos of air cargo every year, D’Silva insists: “There are many opportunities. You just have to hustle a little more. Our Kaizen-based approach prompts continual evolution, rather than dependency on historical practices and support.”

For instance, he says: “It can be very expensive to fly cargo from the UK to places like Australia, Japan, or New Zealand. The cheaper ocean freight option is comparatively slow, with transit times of 60-70 days. Therefore, we have introduced a hybrid sea-air option that takes half the time of an ocean freight shipment and costs a fraction of sending an item solely by air.”

Going deeper into the reasoning behind the successful new service, D’Silva noted that ocean transport is not without its challenges – port strikes and sailing schedules among them. A cargo of Christmas trees, for instance, can lose all value if it misses a vessel and arrives at its destination after the festive season.

With airfreight, there is less risk: a schedule change today may result in a day’s delay, but usually not much beyond that. Airfreight is often the way to go, D’Silva reasons; but for some locations, and for some shippers, a hybrid approach will be best as it reduces the risk – and transit time – whilst offering a median price point.

Elsewhere: “We are looking at expanding our services in Europe for the perishables market – something NNR has vast experience in, in Asia,” he adds.

Future
NNR is also tackling the longstanding industry difficulties in attracting and retaining talent within the sector.

“We need to nurture talent and continue to develop people sustainably, to learn from our current stalwarts and become the next generation of leaders,” D’Silva sums up. “NNR is encouraging younger talent to stay with the company long-term by training them well – including exchanging them with overseas branches to learn other methods. We are making the managers of the future.”

Its willingness to be flexible in the face of change, and to invest in people, will no doubt see NNR through many more decades as a world-class logistics partner.

Source: Lionel D’Silva, Head of Airfreight Development – NNR GLOBAL LOGISTICS UK