FROM MAGAZINE: Growing the network in every dimension

ACL Airshop completes 35 years of providing “custom ULD solutions”. A new and modern factory in South Carolina will be opened soon. In 2016 ACL Airshop was acquired by Ranger Aerospace and four larger institutional investors. Investment in people and technology are consistent with the organisation's new mantra of “grow the network”. On the sidelines of the IATA World Cargo Symposium in Singapore, Steve Townes, Chairman & CEO, ACL Airshop and President, CEO & Founder of Ranger Aerospace, speaks to Reji John and elaborates where he likes to see ACL Airshop in next 24 months. Edited excerpts.

You have a new slogan for ACL Airshop and that is “grow the network”; can you elaborate its meaning?
I am glad you asked that question. Grow the network is more than just a slogan. Our customers, a few years ago, said we like you in 22 cities; we would like you even more in 42 cities. So, three years ago, we made a deliberate decision to grow the network because that is what our customers told us to do. We have doubled every dimension of that in 36 months. We have doubled our ULD fleet from under 23,000 to over 52,000 units in 36 months; we have doubled our airport servicing capacities from 23 locations to 52 locations. And on top of that we have improved all of our facilities around the world and continuing to build more. We have also increased our supply chain capacities from South Carolina to Germany, China and Taiwan. So, in every dimension we are doubling. In the next three years we are likely to double again. But time will tell.

What kind of investment is planned to achieve this rather ambitious target?
Our investments are more than just money. Investments in training, in people; investment in communications, IT systems, various sets of logistics programmes to support our customers’ needs. But when we put some dimension to it, we have more than doubled the average annual investment prior to three years ago. 10 to 15 million dollars per year has been our average investment outlay in facilities and ULD fleet, and we are combining that with important investments in technology. We have ULD control, for example, that we are now combining with Bluetooth which is very effective in some customers’ eyes for better management of their fleet and lowering their overall cost of ULD fleet ownership.

Your focus particularly has been on innovation, what is the size of your investment in research and development?
ULD and technology investment starts with three large gateways centres, three operations centres. Starting in Amsterdam but also branching into Hong Kong and JFK in New York. From those three cities we cover all the time zones with our 52 locations so far as we need to employ and deploy our inventory around the world for customers that need it. ACL Airshop is especially adept at short-term ULD leasing solutions when airlines really need us in a pinch. We are the largest and best in the world at that, in my view. In order to do that properly we have to invest in our own fleet efficiency systems such as ULD control, we have to invest in operation centres. And when we combine Bluetooth with ULD control, that logistics combination is very effective for the customer to be able to have more efficiency and cost control on his own fleet.

A computer rendering of the ACL Airshop's modern state-of-the-art new factory in Greenville, South Carolina, USA. The factory will be inaugurated on May 17, 2019

With such rapid growth, where do you see yourself in the next 12 to 24 months?
Given the pace of what we have done so far in growing the business aggressively but carefully at the same time, we are likely within 24 months to be at 65 locations around the world and have almost 70,000 ULDs in our fleet. But as importantly as our physical fleet expansion and facilities upgrades, the real accelerant is our continuous investment in technology and digitalisation. Lastly, we recently won a “Top Workplaces” award, a clear indicator that we truly care very much for our employees.

How significant is the opening of your new factory scheduled for May this year?
It is exemplary of how we are growing the business. We are growing for our customers; we are growing for our employees. Before we lifted the first shovel of dirt, that factory was laid out in advance with lean techniques, with the accent on productive throughput. The old factory, like many old factories, had a sort of meandering approach towards getting things moving in and out. So, we made a deliberate decision to go to a landmark location and go completely modern in terms of how we are going to put the work through there. We will have better throughput; we are estimating probably 20 percent productivity improvement after the first year, which is significant. The overall cost of occupancy and so forth will be more than enough paid for by improved productivity. Also, it will be a better place to work. It will be modern, clean and efficient. I have already heard a number of employees who have said, “I can’t wait to work in that new place, it looks so amazing.” So, we are ALL looking forward to it. Ranger has built and expanded facilities in previous ventures; it’s like a permanent gift to employees and customers.

Any specific geographies that you will have special focus in next 24 months and will you be looking at new markets?
In terms of geographic expansion, we will see some modest, mature growth in North America and the same in the mature market of western Europe. We are likely to see more expansion in Middle East and Africa. Emerging growth out of Latin America and then the continued strategic expansion across all of the Asia Pacific from India to Australia to Korea and everything in between. Asia Pacific is where we see our strongest growth footprint.

What, according to you, are the biggest challenges?
The challenges that we have start with people. As you grow business like this, we have to be careful not to grow so fast that you get out ahead of your headlights. All of our leadership team is conscious of the fact that we have doubled the business in 36 months, let us make sure, maybe even pause for a moment, that we are bringing everybody along on that growth not too fast but stay aggressive. It starts with people and that is what leadership and business are all about.

And are you able to do that?
I think so. I am probably biased in that opinion, but I think we have a vibrant, interesting, and dynamic organization. Highly entrepreneurial. I go around the world and talk with our employees in town hall meetings, and I sense a high degree of enthusiasm and engagement with every colleague that I meet. It is easy for all of us to love what we do, because we are doing great work for our many customers.