Scan Global Logistics (SGL) has revealed ambitious plans to become one of the world’s top 15 airfreight forwarders over the next five years.
The Copenhagen-headquartered forwarder’s global chief operating officer for sea and airfreight, Mads Drejer, said SGL is currently in the top 40 air forwarders with volumes of around 100,000 tonnes per year.
Drejer said the company plans to reach the top 15, which would require annual volumes of around 400,000 tonnes, through both acquisitions and organic growth.
“One thing is to do more in new places,” he said. “We are planning a rather significant geographical expansion.
“I would describe us as 85% complete in terms of where we have a flag planted, but we have a few black spots – the Middle East, UK and a few other places – and so by default there will be growth in those places.”
“The US is also absolutely key for us in terms of achieving that ambition.”
The company’s US business TransGroup was recently rebranded as SGL in order to align with its expansion strategy.
The company hopes that moving to a single brand will more accurately reflect the strength of the organisation and the current network of 120 offices across six continents.
Drejer added that there are also some industry verticals where it expects “significant growth”, for instance aid and relief, and pharma.
He explained that aid and relief is currently one of SGL’s largest verticals, with the United Nations one of its largest customers.
“There will be acquisitions as well,” he added. “Acquisitions are part of our strategy and we have completed nine or 10 smaller deals in the past five years.”
SGL’s most recent acquisition came two months ago when it purchased Grupo Contenosa, a Spanish family-owned logistics service provider with a presence in the Mexican market.
The forwarder has also entered new markets in Poland, Czech Republic, Mexico, Peru, and Myanmar.
SGL also opened its first office in France in April, although it already had extensive business in the country through agents.
In January SGL signed a definitive agreement to acquire the air and ocean activities of US logistics firm Werner Enterprises.
Other investments this year include Chicago-based Expedited Solutions, Atlanta-based Trans ATL and Boston-based Precision Worldwide Logistics.
To help oversee the expansion in airfreight, the company recently appointed David Wystrach as global head of airfreight.
Wystrach joined on May 1 from Flexport and he previously spent more than 13 years in an airfreight procurement role at Panalpina.
Drejer explained that previously the global head of airfreight role was managed by the company’s chief executive for Asia but the task had become too big and needed a dedicated resource – especially with its plans for expansion in mind.
The company is backed and owned by private equity group AEA Investors, which purchased all shares in the business in 2016.
In the first quarter, the company saw its revenues increase by 44% year on year to $380.7m, while earnings before interest, tax, depreciation and amortisation increased 30% to $4.2m.
The revenue increases came on the back of higher rates and volume increases, in particular in the Nordics, Asia Pacific and North America.
Drejer described the current airfreight market as volatile but stable when compared with seafreight.
“Airfreight is manageable but you do need to search a bit more to find the right solutions at the right prices,” he said.
“We foresee more capacity coming in slowly, but steadily. We also expect demand to be sustained to a certain point and we think those two curves will follow each other nicely.”
He added that there had been some spillover from ocean and rail freight to air due to delays and a lack of capacity and delays.
On the peak season: “We are completing the final negotiations now and there is no doubt we actually foresee a quite tight peak so we are securing some fixed capacity, but there is no panic.”
Originally Appeared Here