Interview with CargoForwarder Global
- The South American carrier has ambitious fleet and route plans to become the cargo airline of choice for its customers. They go hand in hand with efforts to further reduce the carbon footprint, embarke in circular economy and additional steps to digitalize the cargo business including door to door in domestic markets. These and other aims are standing high on the agenda of the Santiago, Chile based capacity provider and were illustrated by LATAM Cargo CEO Andrés Bianchi during an exclusive interview with CargoForwarder Global.
Chapter 11 exit nears
Is LATAM Cargo reinventing its entire business, leaving no stone unturned? “No, we are not,” objects Señor Bianchi. “All projects and measures we are now highlighting were explicitly pointed out in our growth plan approved in 2019, when we were facing a much lower rate environment compared to today.” However, after the strategy was accorded, the pandemic began to spread bringing aviation to a near standstill and forcing LATAM as well as some of its peers into creditor protection proceedings in accordance with Chapter 11 of the U.S. Bankruptcy Code.
Today, the airline is still there, but “we expect a favorable decision from a U.S. judge in either Q3 or Q4 to exit creditor protection,” states Mr. Bianchi. CargoForwarder Global reported: https://www.cargoforwarder.eu/2022/06/19/latam-on-way-to-exit-chapter-11-proceedings/
Additional P2F conversions
Besides the pending Chapter 11 exit, from a cargo perspective strong signals to the market are mainly fleet decisions to convert additional LATAM-owned passenger B767s to freighters. Currently, the freight division operates 14 B767-300 but will add two more until year’s end. And that’s not the end of the line. Until December 2023, “we will have a uniform B767 freighter fleet consisting of up to 22 units,” announces the cargo helmsman.
The capacity increase will enable LATAM Cargo to operate new routes and/or serve some destinations more frequently. On top of the list stands MAD, that was taken off the flight plan when C-19 started spreading. Beginning now, the new services read AMS/ MAD / JFK / MIA/ BOG and AMS/JFK/MIA/BOG. In case of imports, goods are transited in Miami and flown on board the LATAM freighter or passenger fleet to various destinations in South America. “Practically, we double our frequencies between The Americas and Europe,” states the executive. He goes on to say that this capacity increase makes the network more attractive and gives customers multiple transport options.
New U.S. destinations targeted
The transatlantic expansion is complemented by new destinations LATAM Cargo intends to serve in the U.S. or has started serving already. This applies to Huntsville, Alabama, operated on behalf of logistics giant DSV once a week. “This unique collaboration is a quick turnkey solution, loaded and controlled by DSV Air & Sea with the full commitment and lift by LATAM. Routed in return from Viracopos, through Bogota and Miami – this full-service offer is a game changer for many looking for relief in this market,” reads a DSV release.
New on the flight plan stands also JFK and Chicago. Although ORD is a restart since flights were stopped due to pandemic reasons. But Mr. Bianchi’s hunger is not satisfied yet: “In addition, we are looking at one or two other U.S. destinations we consider serving,” indicates the executive. He keeps tight lipped when asked which ones these are. “We’ll tell you when finally decided.”
CROAMIS will be rolled out domestically
Another main task area the management is permanently focusing on is the further digitalization of its freight business. With the CROAMIS platform from the Indian company Wipro, a booking and reservation system has been in place since last year that has proven itself in practice, says LATAM Cargo. Following its global introduction, it will soon be activated in domestic markets. The objective of its digitalization efforts is to provide customers with reliable and efficient solutions and a comprehensive set of tools, offering them tools that work best for them. This includes LATAM Cargo’s entry into the online marketplaces accessible by cargo.one and Webcargo. “These platforms offer customers access to LATAM’s cargo capacity in an innovative way,” emphasizes Mr. Bianchi.
Three-pronged approach
As a South American company, LATAM Cargo’s sustainability strategy, named #ANecessaryDestination!, is focused in the region, based on a three-prong pillars: Climate Change, Circular Economy and Shared Value. South America is a key region as it contains six of the ten richest countries in terms of biodiversity. It also hosts more than 25% of the world’s forests and arable land and 40% of the species on Earth.
Andrés Bianchi’s credo: “It is crazy to destroy old and intact woods first and then reforest devastated landscapes. We need to protect precious natural resources in first place and give people living there an economic perspective.”
Particularly this objective, the active protection of valuable natural habitats in order to safeguard their existence and that of their dwellers, is certainly shared by many of his colleagues at LATAM Cargo, including the entire air freight industry.
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Saving the planet – the most noble and ethical ambition
“We ought to reduce our ecological footprint. And not just of our airline, but of all companies participating in the supply chain,” exclaims Cargo chief Andrés Bianchi. For doing so, the freight carrier launched a collaborative program called “Let’s fly neutral” to offset greenhouse gas emissions.
With this scheme, “we have made an important commitment to our partners: to offset all the carbon emissions generated by their shipments. They will only need to offset 50%, as LATAM Cargo will offset the remaining 50%. In this way, we neutralize the total amount blown into the atmosphere.”
All environmental measures are based on the conviction that it is time to quit the traditional linear business model and move towards a circular economy. It is an ecologically holistic approach measuring singular decisions by benefits resulting for the entire society. Activities include upping the recycling rate of packaging materials in cooperation with airports and handling agents, mainly plastics, the repair of pallets for reuse, and efforts to maximize the collection and disposal procedures to reduce waste wherever possible.
Solidarity program
For more than ten years relief flights in case of floods, earthquakes or other natural catastrophes have been part of Latam Cargo’s repertoire. Now a broader approach has been created, in addition to rescue missions, the scheme includes health issues and activities to protect the environment.
LATAM Airlines CEO Roberto Alvo illustrates the approach, mentioning the recent flooding in the Brazilian state of Pernambuco. In close coordination with NGOs and the Ministry of Tourism “we have supplied food and personal hygiene products for affected communities. In addition, we transported 8 veterinarians to help animals that have suffered for the same reason.”
The executive went on to say: “At LATAM, we see it as our responsibility to contribute to the societies in which we participate, beyond our role of transporting and connecting. We are part of South America and, with a lot of passion, we contribute to take care of the environment where we come from. We want to have a positive impact on our region”
Heiner Siegmund
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