Business

Air freight carrier catches tail wind

BY CAMILO THAME Business co-ordinator thamec@jamaicaobserver.com

Wednesday, October 31, 2012    

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EXEC Direct Aviation is on the verge of making four round cargo trips a week to the US.

The local air-freight company, which less than a year ago started with a single flight, began flying cargo for a US-based freight forwarder this month.

The deal requires Exec Direct to carry 1,000kg to Jamaica each week, but it also means that it can schedule two new flights to the Cayman Islands.

Demand from exporters, mainly wanting to send agricultural produce to the US, can already fill the company's single Saab A340 aircraft with a four-ton cargo capacity, once a day all week. But the money is really on the leg coming back, said Exec Direct's Chief Operating Officer Kamal Clarke.

“Agriculture rates are low carrying cargo out of Jamaica,” he said.

Up to October, the company mostly shipped flowers coming from Latin America - and Thailand in some cases - which ended up in Miami before heading to Jamaica. It also brings in a lot of items bought online through its ShipMe services.

But those items only required two trips a week out of Miami.

Weak demand for its service inbound into Jamaica also made the company use its return legs on Wednesdays and Fridays to test a service to Cayman, where it would stop before heading to Jamaica.

“I want to see the October figures with the freight forwarders,” said Clarke. “Wednesday's flight in was completely full.” The cargo was mainly destined for Jamaica.

This has prompted the company to establish separate flights to Cayman on Tuesdays and Thursdays next month.

“The majority of importers in Cayman prefer flying on Tuesdays and Thursdays,” said Clarke, who hopes that the shift in days will also mean considerably higher cargo going to Cayman as well.

What has primarily made this possible is an in-transit bond that the company secured three months ago.

The customs bond allow the carrier to transfer from one plane to another without having to clear the goods first - a cost that would have been incurred by importers and which would likely make them seek alternative freight carriers.

“Now we can do all other markets using Miami as a hub,” said Clarke. “At the rate we are going right now, by next July, we are operating (inbound services) four days a week.”

The carrier does face another difficulty - customs and handlers in Jamaica operate on a nine to five shift, which means that overtime charges apply during the night, and they are “undefined and expensive”, according to Clarke.

In response, Exec Direct has been overnighting in Miami on Tuesdays and Thursdays to avoid heavy overtime charges in Jamaica. Spending 10 hours in Miami before heading back to Cayman the following day cost US$250 ($22,500) or less, which Clarke estimates is a saving when compared to overtime charges.

Exec Direct's next step is to carry its online shipping service, ShipMe, to other islands - Cayman, Aruba, Bonaire, Curacao, and Haiti are targeted - and trying to increase inbound flights from the US to five days a week, which would require an additional plane.

Moreover, the company wants to eventually establish its own handling capabilities with its own ground crew and warehousing, using Jamaica as a hub.

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