The Challenge Group benefitted from an increase in demand for end-to-end services that started at the height of the Covid pandemic but that has continued even after the easing of the crisis.
Challenge Group chief commercial officer Or Zak said that the demand was fuelled by difficulty in securing transport service providers during the pandemic.
“The supply chain faced significant congestion, with seafreight experiencing prolonged delays and a lot of trade shifted to airfreight, causing difficulties for the freight forwarding industry in securing third-party providers for additional ancillary services,” he said.
Using one supplier for all services, therefore, became more attractive.
Companies have now seen the benefit of using a single provider and do not see the need to change.
“We have actually observed a noticeable growth in the invoicing for additional logistics services through our subsidiaries, Challenge Handling and Challenge Logistics. These services encompass a range of activities, including sorting, warehousing, packaging, and distribution,” Zak added.
The company includes three airlines – Challenge BE, Challenge IL and Challenge MT – as well as charter, handling, warehousing and road transport.
Zak said the company is also working on linking the railway service coming to Liège from China to our airfreight hub in the Belgian city – the firm’s second-line warehouse is located just in front of the railway terminal in Liège
The company’s end-to-end services largely cater to the transport of heavylift and outsized projects such as aircraft engines, helicopters, oil and gas equipment, automotive and turbines but there is also demand from e-commerce firms.
“We deeply believe that end-to-end will become best practice, especially when it comes to specific verticals,” he said. “The pandemic highlighted the risks of relying on a single mode of transport or sole production location, hence global trade is becoming more international and multimodal.”
On the current market, Zak said that demand is down but there are some positives.
“Although the current market conditions are challenging, we are observing promising indications of increasing demand on specific trade routes for particular commodities,” he said.
“As a result, we are confident that the market will regain momentum and yield positive results in the following months.”