FreightWaves Haul of Fame: Burlington Northern Air Freight has changed hands, names and missions during its run …
The first years
Burlington Northern Air Freight, Inc. was established in June 1972 as a subsidiary of the Burlington Northern Railroad. When it was launched, the company served 10 cities. The company was an air freight forwarder specializing in shipping heavy materials to the United States using contracted freight space on commercial lines.
Acquired by Pittston
In 1982 the company was acquired by Pittston Company of Stamford, Connecticut. (Pittston would later change its corporate name to Brink’s.) In 1986, Burlington Northern Air Freight was repositioned as a provider of overnight or expedited air cargo. Therefore, Pittston changed its name to Burlington Air Express. Additionally, Burlington acquired WTC Air Freight in 1987.
In the early 1990s, many industry observers believed Pittston would be looking to sell the underperforming subsidiary. Burlington Air Express’s biggest problem was its overdependence on companies in the auto industry, which is very cyclical. At one time, the auto industry accounted for 20-22% of the company’s revenue stream in the United States.
However, by the end of the third quarter of 1996, Burlington Air Express had grown into a $ 1.4 billion global freight and logistics company. In addition to a variety of air express services, it has provided international air freight, ocean transportation, and customs brokerage.
Asked at the time, Dennis Eittreim, president of the company for the Americas, said, “There are several things that have contributed to our success. Most importantly, we have achieved critical mass in our domestic operations and have been able to balance the ups and downs of our business. “
Company management has made efforts to expand the company’s customer base, seeking more business from small businesses in a number of industries. At the end of 1996, the auto industry accounted for only 5% of Burlington Air Express revenue stream.
Beginning in 1993, Burlington Air Express strengthened its presence in ocean freight transportation through small acquisitions and grassroots marketing. Although this sector generated only a small portion of the company’s overall revenue, it has allowed Burlington Air Express to promote itself as a full logistics provider, which has helped the customer base of the ‘business.
At that time, Bruce Spear of AT Kearney said: “From my perspective, Burlington Air Express is expanding its scope from pure air cargo and customs clearance and increasingly becoming a logistics provider, a player in the total supply chain. ” Spear also said the measures Burlington is taking will help it in the international market. “They can take advantage of the logistics solution approach on an international scale, expanding their presence in many countries. Knowledge of the local market and their supporting information system becomes more valuable abroad. Few companies can do this, and that’s where the demand is, as businesses go global. ”
At the same time, Burlington created new levels of expedited service, which offered its customers the choice of speed and price, depending on their needs.
In the decade since Pittston’s acquisition of Burlington Air Express, its closest competitor was Emery Air Freight (later Emery Worldwide). But by the early to mid-1990s, Federal Express and UPS were getting bigger and more competitive.
“You would have to have your head buried in the sand not to know that people are chasing you,” Stephen R. Dearnley, president of international operations for Burlington Air Express said in an interview at the time. “You have to be more flexible, offer a wide range of services to be competitive. This was the motivation for embarking on ocean freight transit. You have to be a transport agency rather than just point-to-point express trade, ”he said.
A new name
Pittston changed the name to Burlington Air Express for the second time in 1997. BAX Global was chosen to reflect the company’s global reach. The company’s headquarters were also moved to Irvine, California. BAX Global’s activities focused on air freight, as well as ocean, warehousing, ground and logistics. At the time of the name change, the company had 500 offices in 119 countries and employed more than 5,000 people. In addition, the company generated approximately $ 1.5 billion in annual revenue.
BAX Global also made two acquisitions in 1997. It bought Cleton & Co, a logistics, warehousing and distribution company located in the Netherlands. Its second acquisition cost $ 76 million; it acquired Distribution Services Ltd. to further expand its global reach.
Schenker & Co. was founded in Vienna, Austria, in 1872. Schenker became a subsidiary of Deutsche Bahn (DB), Germany’s national railway, in 2003 when DB acquired Stinnes AG. DB Logistics, the transportation and logistics division of DB, acquired BAX Global from Brink’s on January 31, 2006. The cost of the acquisition was $ 1.1 billion.
Under DB, BAX Global was a transportation and supply chain company in the United States, Canada and Mexico. Then, in 2011, DB Logistics announced that it would refocus its operations in North America and end the majority of its air freight transactions. The German third-party logistics company said BAX Global is phasing out its dedicated domestic air cargo fleet and will operate a “non-fixed asset” model. In other words, it would go back to the model that Burlington Northern Air Freight used in the 1970s – reserving customers’ cargo on other cargo carriers or chartering planes as needed.
Restructuring means a new mission
As part of his North American restructuring, Schenker said he would focus on managing transportation for a smaller group of shippers. “Due to the prolonged recession and soaring fuel prices, more and more of our customers are opting for expedited ground solutions over domestic air cargo, and they are looking for partners who can provide fuel management services. transportation rather than transactional transportation, ”Heiner Murmann, CEO of Schenker Inc., said in a statement at the time, as reported by American Shipper of FreightWaves.
Schenker also said the closure of the domestic air network would not affect its international freight transit or warehousing operations. “We remain committed to maintaining a strong presence in all of the Americas, including the United States, and this realignment will help us achieve that goal,” said Murmann.
Until this announcement, BAX had operated a fleet of 20 aircraft from a 279,000 square foot hub in Toledo, Ohio. About 700 employees at the hub had sorted around 2.4 million pounds of goods each day. Schenker also announced at that time that the hub was also in the process of being closed.
Following the restructuring, BAX transported American cargo on trucks.