The Silicon Valley-based freight forwarder will charter its own freighter flight from Hong Kong to Los Angeles this weekend.
Flexport, a Silicon Valley-based freight forwarder founded in 2013, has set its sights on chartering aircraft in order to efficiently handle the tightened airfreight capacity market.
Airfreight demand growth in general has been outpacing capacity growth throughout 2017, largely fueled by the e-commerce boom.
Flexport CEO Ryan Peterson said in a blog post that airfreight capacity shortages are especially severe due to product launches and flight cancellations that have coincided with the pre-holiday season peak.
After confirming last month it had received a new funding round of $110 million, Flexport revealed this week that on Sunday, it will charter its own freighter flight from Hong Kong to Los Angeles, utilizing an Atlas Air 747-400.
The flight will transport consumer electronics and a variety of other high value consumer products, Neel Jones Shah, senior vice president and global head of airfreight at Flexport, told American Shipper on Friday.
Shah said that Flexport is considering doing another charter again the following week from Hong Kong to Los Angeles, and that it will make a decision on future flights for peak season 2017 over the weekend.
Shah noted how chartering aircraft right now is pretty expensive due to the capacity shortage. He said that for Sunday’s flight, Flexport is playing over $800,000 to charter the flight.
However, Flexport is willing to make this type of investment because the company is in it for the “long game” and building that long-term loyalty he said.
Looking ahead, Flexport sees charters as being a core part of its delivery network for 2018. The company believes that 2018 will be very strong as well, not only for Flexport, but for the industry as a whole, Shah said.
As far as potential freighter charters go, Flexport is really focused on the transpacific trade lane, where it generates the largest amount of its revenues. Flexport sees tremendous growth opportunity on this trade lane, Shah said.
Flexport enters aircraft charter market
