Cargo Handling for Largest Aircraft Lessor Requires 'Swiss Army Knife' Operation

This year Amazon became ATSG's largest customer. ATSG ⁠— the world's largest lessor of freighter aircraft ⁠— expects to operate up to 46 and lease 42 Boeing 767 aircraft with the e-commerce giant by the end of December. 

As consumer dependence on e-commerce increases, the seamless movement of cargo and communication across the supply chain is becoming a centralized source of public concern ⁠— not only how goods move from point A to point B, but how cargo-handling infrastructure is installed and maintained. 

While ATSG also owns three airlines and two aviation maintenance facilities, its LGSTX operation is affectionately known as the company's "Swiss Army knife," offering a diverse range of cargo-handling and maintenance services like gateway operations; material handling; ramp support, including fueling and deicing; ground support equipment (GSE) leasing and maintenance; design and integration of material handling equipment (MHE); sortation systems maintenance; and airport facility and property maintenance. This list illustrates how LGSTX got that nickname, but the ability of ATSG employees to be cross-trained in these areas is what solidified that reputation with its broad customer base.

"The people that we have on the LGSTX team have been willing to be Swiss Army knives themselves," said Jeremy Heard, director of facilities maintenance at LGSTX. "Their strength may be as an electrician, but they'll also go work on airfield lighting issues. They'll work on navigational aid issues. They'll help build out new offices, just whatever the task demands. These folks do it to meet the customer's needs. They just continue to learn more and more and more as they're here and to replace a person like that is extremely difficult. Recently, recruiting for growth has become a very real issue."

In a conversation with FreightWaves, Heard and Brad Heath, VP of business development, detailed the diverse services provided by ATSG's logistics operation, as well as how it has weathered the labor and part shortages spurred by COVID-19. Initially, the operation grew out of supporting ATSG's airlines, its sister maintenance company and the headquarters facility in Wilmington, Ohio. 

"Today, we run cargo-handling services, primarily for Amazon Gateway Operations in Tampa, Nashville and Charlotte. Six hundred employees ⁠— nearly half of our staff ⁠— are involved in the gateway operations, where we unload the incoming aircraft, break it down, cross-dock it onto trucks and then complete the same process in reverse. Then we prepare for the flight to the next Amazon processing location," explained Heath. 

Photo credit: ATSG

Similar to the service it provides for Amazon, but without the aircraft, LGSTX also runs two surface transfer centers for the U.S. Postal Service ⁠— one facility outside Chicago and another in Orlando, Florida, employing several hundred people. Inbound truckloads of domestic mail are received, processed and cross-docked to outbound trucks in the Postal Service network. 

"We also are heavily involved in ground support equipment for airlines and cargo ramp operations," said Heath. "We provide those services across a variety of operators like Amazon and DHL, and we lease ground support equipment like tugs, dollies, and K loaders. We have an ongoing maintenance division that maintains that equipment, both the preventive maintenance and the reactive maintenance if it breaks down."

Whenever customers need conveyance systems installed in a warehouse, LGSTX calls on Trifactor Services, its material handling engineering, design, and integration division. Trifactor is supported by a network referred to as RME ⁠— reliability, maintenance, and engineering  — housed within customer warehouses and 3PLs to maintain conveyance systems. RME also operates a 24/7 call center that provides another layer to ensure customer satisfaction within the network.

"We receive severity calls from major customers like FedEx FDX, UPS UPS, DHL, Amazon AMZN, and we respond with dispatch teams of mechanics nationwide to access the facility and fix the problem," said Heath. "They might have a belt break, a motor burnout, a control issue that shuts down operations somewhere in their network. They place a single call to the logistics maintenance operation center and we will activate a response team anywhere in the customer's network to repair the issue, returning that location to operating as quickly as possible."

LGSTX has a maintenance team of 60 responsible for supporting both the remote gateway operations and build-outs, as well as the Wilmington Air Park that also serves as corporate headquarters for ATSG. This team maintains 1,900 acres and 40 buildings at the largest cargo airport in Ohio. That includes coordinating with the fire marshals and building inspectors, as well as executing snow removal and runway lighting. The team also operates and manages the air traffic control tower, as well as all the environmental permits through the Clinton County Port Authority. 

"The LGSTX team adapts to make our customers successful within their markets following their informal customer promise to ‘make your priorities possible.' Sometimes that customer is another ATSG company or an e-commerce integrator but we still provide world-class service and response times," said Heath, who attributes much of LGSTX's growth to demonstrated ability and building customer relationships. 

Organic growth also has been key to the growth and continued success of LGSTX Services.

"We didn't start with three gateways awarded to us," Heath added. "We started with one and then as the network rapidly grew and Amazon desired to go into more locations, they included us in the bidding of new opportunities."

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. The content was purely for informational purposes only and not intended to be investing advice.

Image Sourced from Pixabay