nitiatives by ULD and pallet manufacturers to reduce the weight of their products have brought a dividend for outsourcing specialist Jettainer, which announced in January that it has been certified to the ISO 14001 environmental management standard.
The company is among the world’s largest ULD owners, its fleet growing by almost 20% to 86,500 last year thanks in part to new management contracts from American Airlines and Jet Airways. And supporting efforts by carriers to reduce aircraft weight and fuel consumption has given Jettainer an opportunity to play a direct role in the development of new products that can claim to be environmentally sustainable as well as commercially beneficial – although ISO certification also recognises the environmental awareness of the company’s employees.
Jettainer MD Carsten Hernig says most of the lower-deck ULDs in current service weigh just under 70kg, where once they would have been 100kg. “The latest designs are in the mid-50s and in the next two years we will get down to the mid-40s,” he predicts.
Designers of aluminium containers have found ways to reduce thickness of the material without sacrificing strength, while the ULDs with even lighter composite walls that have entered service in the last five years appear so far to be as reliable as the longer-established units.
One manufacturer already offers units for narrow-body aircraft consisting of an aluminium base with self-supporting composite walls that don’t need aluminium supporting struts, Hernig points out.
A secondary commercial and environmental advantage promoted by outsourcing companies, alongside the weight savings achieved as they replenish client airlines’ ULD fleets, is a reduction in “dead miles”. By guaranteeing the right quantity and mix of containers where and when they are required, they claim to eliminate repositioning costs with no need for safety stock. (Jettainer also points out that when aluminium ULDs are discarded, the material is easily recycled.)
Both weight saving and a reduction in empty miles were factors in Cathay Pacific’s decision to outsource supply and management of its container fleet. CHEP Aerospace Solutions signed a five-year agreement with the carrier in September, a major coup that has seen CHEP’s global fleet increase from 55,000 to 75,000 containers and pallets.
Cathay stipulated a 58kg unit, right on the limit of current technology. “Not many manufacturers can go below 60kg,” says Ludwig Bertsch, president of CHEP Aerospace Solutions. “Some carriers still consider 67-70kg to be light. In our definition, it’s 65kg or less.”
CHEP acquired Cathay’s existing ULD fleet under the terms of the deal, which followed a one-year due-diligence process. “They were already transitioning to lighter-weight composite ULDs at 5-10% per year, but we have committed to a full switch in nine months,” Bertsch says.
“Cathay previously managed their fleet internally and carried out repairs only in Hong Kong in a traditional hub-and-spoke operation,” he says. “We have 29 owned repair stations, and a total of 50 including certified sub-contractors, so outsourcing means they should never have to fly a damaged unit for repair.”
CHEP will also convert TAP Portugal’s 3,500 ULDs from aluminium to a composite design within months after signing up with the Portuguese national airline in October. TAP is trimming its ULD fleet size by 15% thanks to reduced repositioning, and expects to save several million euro in fuel costs over the four-year term of the agreement.
Singapore Airlines was looking for similar fuel saving and environmental benefits when it awarded CHEP a repair-only contract last year. Like Cathay, SIA had formerly returned damaged ULDs to its hub. “Global repairs were the biggest ‘pain point’ for them,” Bertsch says.
The majority of Jettainer’s ULD fleet is contracted to larger carriers such as Lufthansa Cargo (its parent company) and Etihad. In September, it announced it was taking over global management and maintenance of American Airlines’ containers and pallets.
American became the world’s largest airline after acquiring US Airways, whose ULDs Jettainer had previously managed for several years. Jettainer has established a presence at AA’s main Dallas/Fort Worth hub and is also opening offices in Miami, New York, Chicago and Los Angeles.
Under the new agreement, AA is set to replace a large proportion of its 15,000 cargo and baggage ULDs with new lightweight containers by March, saving a projected 1.9 million litres of fuel per year.
Jettainer also last year signed a five-year deal to provide Jet Airways, India’s second largest carrier, with almost 1,300 ULDs, almost half of them lightweight AKE containers. These are being deployed on long-haul routes to Hong Kong, Toronto and Brussels, Paris, London, Newark (USA), plus new wide-body flights Jet Airways launches.
Alongside these larger airlines, Hernig says smaller carriers, and those scaling up to wide-bodies, can equally benefit from the cost visibility and predictability that outsourcing gives them.
Jettainer took on its first African customer at the start of this year when Equatorial Congo Airlines (ECAir), which launched in 2011, decided to outsource its container and pallet requirements. The carrier operates seven Boeing 737s, 757s and 767s to airports in Central and West Africa from Brazzaville and Pointe-Noire in Congo, and also serves Paris and Dubai.
As new carriers emerge, others adopt different business models. “There is great potential for low-cost carriers to expand their intercontinental services,” Hernig says. “They have the strength of capital to get into wide-bodies, but like to outsource as much as possible.”
Damage rates falling
ULDs can easily last 10 years, depending on the number of weekly cycles the carrier puts them through. Historically, they are taken out of service when the repair cost exceeds the remaining value of the unit, Jettainer’s Hernig says. However, the ‘lightweighting’ trend is encouraging carriers to re-equip even where their existing units are still serviceable.
Both CHEP and Jettainer offer short-term lease options from their in-house ULD fleets, running from two days to two or three months. Where the companies enter into a full outsourcing and management contract, this is for a minimum three-year period but more typically five to seven years, Bertsch says.
ULDs are usually depreciated over eight, 10 or 12 years. “We do it at 10 years, but old Swissair aluminium models manufactured in 1996 are still in service,” he says. “If you’re not changing for weight reasons, they’re still good to fly.”
The oldest Kevlar composite ULDs date back five or six years and are still being flown by early adopters such as KLM and Air Canada, he comments, although designs have since moved on. The curtains were prone to damage on the earliest units but are now supplied in a stronger, high-performance polyethylene.
Composite panels can also be holed when handled carelessly but are straightforward for repair shops to hot patch. “The cost per touch is lower than for aluminium containers,” Bertsch explains. The latter suffer damage less often but cost more per workshop visit, a trade-off that has to be calculated over the entire lifespan of the unit.
CHEP was involved in the IATA working group that drew up the new ULD handling standards manual and drafted new employee training guidelines. The company has seen immediate benefits, he says.
Around 5-6% of CHEP’s ULD fleet is out of service at any given time either because their whereabouts are unrecorded or, more usually, for repair. But the new framework has put handling agents in a better position to decide whether a unit is serviceable, for example if it has been holed but can still fly.
“There is a lot more awareness and we’ve seen an improvement in damage rates,” Bertsch says. “New designs and construction methods are helping. Some types require only 0.5 repairs per year compared with a historic average of 1.5-2 repairs per year.”
However, this still depends to some extent on the areas where airlines fly. “Asian handlers are more careful than in the US!” he comments.
CHEP is working harder to pursue serial offenders, but cannot do so unilaterally and emphasises that a partnership approach is required.
“Our contract is with the airline, which in turn has a contract with the handler. According to the standard IATA document, the handler has to do serviceability checks and take care of the equipment,” Bertsch says.
“We now have a sticker saying the ULD is the property of CHEP and you’re liable for damage. If a fork-lift does damage in the heat of operation, well it happens. But if it has been pushed along while loaded, that’s wilful.
“If we realise damage is due to negligence, we will – with the airline’s cooperation – go after the handler and charge out the repair. But the unit may have flown another time, so it can be difficult to know exactly when the damage occurred,” he says.
Tracking makes headway
An app developed for mobile devices allows Jettainer customers to book units in and out and to determine container location. “Rotating container usage is improved. If someone signs at the airport, you know who to call to get it back,” Hernig explains.
JettAPP responds to barcodes and RFID signals, and is claimed to simplify the work of airline personnel, ground handlers and repair shops.
But a container tracking research project showed that relying on RFID was going to be “expensive and complicated,” Hernig says. “It’s a question of who makes the investment. Gates would have to be installed in every warehouse and airport. Who moves first?”
There were also challenges concerning the tag position. Get it wrong, and there could be interference in the signal, he says.
There appears to be more promise in a GPS-based system, although limited battery life would currently restrict ULDs to clocking-in just once a day. Jettainer is collaborating with universities and manufacturers to investigate technologies such as “energy harvesting” from box movement or sunlight.
Under present aviation rules, this type of location system in any case would have to be switched off during transit, or put into flight mode like passenger devices. Hernig expects practical experience in day-to-day usage to help the industry overcome these limitations in the next year or two.
“The technology is already in cargoes,” he points out. “You can measure temperature, shock, when it’s moved – it’s all there, but you don’t want to be taking the container out of the transport cycle to monitor it.”
Bertsch agrees. “We strongly believe that RFID is not the right technology,” he says. There are not enough readers at appropriate points to track a pallet’s location and ultimately recover it.
CHEP is currently testing an energy-harvesting GPS-based tracking solution that can work to the European-developed GSM mobile communications standard in cases where GPS is unavailable. The product was developed over the last two years in partnership with air cargo tracking specialist OnAsset Intelligence and incorporates OnAsset’s Sentry FlightSafe real-time data collection technology.
A tracking device fitted to each ULD is connected to a solar panel and a power converter that uses sunlight to recharge the batteries, avoiding the need to call containers in each week.
Field trials involving 50 ULDs on board aircraft operated by CHEP client airlines, initially Air Canada and Hawaiian Airlines B767s, began at the end of November. In parallel with this, CHEP is carrying out heat, shock and impact testing at its Innovation Centre in Orlando, Florida.
When the system goes live, carriers’ freight customers could piggyback it to track their own shipments, Bertsch says.
“In most cases you only have to know once a day, not every hour, where the unit is, and it can transmit many kinds of data, giving the possibility of providing additional information on the flow of high-value shipments such as pharmaceuticals. This is something we could market as an additional service,” he says.
If the device captured a shock of more than a predetermined level, say 6G or 8G, it could provide a time stamp pinpointing what happened to the ULD and where. CHEP says this could help the shipper file an insurance claim if the cargo was affected.