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DHL Partners with Northern Air Cargo for Western US Service Loop

DHL Partners with Northern Air Cargo for Western US Service Loop

DHL Partners with Northern Air Cargo

DHL Express has expanded its network of contractors by adding Northern Air Cargo (NAC) to its roster, a strategic move aimed at enhancing its air transport services across the western United States. This new partnership injects much-needed business into NAC, providing a vital boost for the regional carrier.

New Partnership Details

Northern Air Cargo, headquartered in Anchorage, Alaska, is renowned for serving remote communities in the state. It also operates freighter aircraft on behalf of sister companies Aloha Air Cargo and StratAir, based in Miami. According to DHL spokeswoman Pam Duque, NAC began operations last month with a Boeing 737-800, flying routes that include Los Angeles, Phoenix, and Reno.

This collaboration fills a critical gap in DHL’s route network and is aimed at optimizing capacity and meeting varying demand throughout the year. Although NAC's primary operations are in Alaska, the aircraft under this new partnership are focused on the contiguous United States.

Strategic Adjustments in DHL’s Network

The addition of NAC to DHL's contractor portfolio follows the termination of DHL's transport services agreement with Mesa Airlines in March. Mesa Airlines previously operated three Boeing 737-400 freighters for DHL. The newer 737-800 freighter, now operated by NAC, offers greater capacity than its predecessor.

The timing of this partnership is advantageous for NAC, which has been facing reduced demand in certain markets. The partnership with DHL presents an opportunity for NAC to expand the contract, contingent on their performance and DHL's volume growth.

Challenges and Opportunities for NAC

NAC, a subsidiary of Seattle-based Saltchuk Resources, has experienced a significant downturn in cargo volumes and revenue over the past year. Bureau of Transportation Statistics data reveals a 15.5% drop in cargo volumes and a substantial 53% loss in revenue, culminating in a $12 million loss for the year ending March 31.

Earlier this year, due to insufficient demand, Saltchuk's NAS Aircraft Leasing Co. placed two newly acquired Boeing 767-300 freighters in storage. Additionally, Aloha Air Cargo, another Saltchuk subsidiary, discontinued its Los Angeles-Honolulu route in May due to weak load factors, leading to the furlough of 18 pilots. Despite these setbacks, Aloha Air Cargo continues to operate a triangle route from Seattle to Honolulu via Los Angeles.

Future Prospects

The partnership between DHL and NAC signifies a strategic alignment aimed at enhancing service efficiency and capacity management in DHL's air network. For NAC, this partnership provides a critical opportunity to stabilize and potentially grow its operations amidst a challenging market environment.

As DHL continues to adjust its network to meet demand fluctuations, NAC's involvement could expand, offering a path to recovery and growth for the regional carrier. This partnership exemplifies how strategic collaborations can drive operational efficiency and market resilience in the logistics and transportation industry.

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