January 13, 2020: Freight forwarding and customs brokerage company Flexport will end its own dedicated freighter service B747-400F on January 25. Thereon, the forwarder will instead be moving to an asset-light model, having entered into a series of block space agreement with Plus Logistics, a wholly-owned subsidiary of Nippon Cargo Airlines (NCA).
The termination happened earlier than expected because of worsening market conditions and diversifying freight patterns in response to the US-China trade war. Flexport is now turning to Southeast Asia, where its clients’ year-on-year volumes from Vietnam grew by double digits, while those from the Philippines increased by triple-digit percentages.
Initially, its contract, which was with Western Global Airlines (WGA), was due to run until March 31 2021. However, in July 2019 it switched its contract to Plus Logistics and was using an NCA-leased Atlas Air aircraft. The forwarder’s dedicated 747 network consisted of a twice-weekly flight from Hong Kong to Los Angeles and another weekly Hong Kong to Chicago flight, but the Chicago rotation appears to have been replaced with another Los Angeles flight since December 2019.
Flexport will be a launch customer for NCA’s new twice-weekly route to Taipei, which starts in April, but it is also seeing strong growth in Vietnam, Philippines, Indonesia, and India.