The Hut Group (THG), has stepped into the league of Amazon and Alibaba as the Manchester UK-based online retailer moves to partner Singapore Airlines (SIA), as well as acquire two of its own freighters, as its supply chains have been hit by the belly capacity crunch.
The two elements of its strategy are inspired by its desire to “remove its reliance on scheduled passenger services”. And while the Covid-19 pandemic is partly responsible, so too is the company’s growth trajectory.
“This is in response to both recent unprecedented disruption across the airline industry, and THG’s strong international sales growth,” the company says.
“The recent disruption across the airline industry has brought huge challenges in the movement of goods across the globe,” says Matthew Moulding, founder and chief executive officer of THG.
Since the start of this year – and the beginning of the pandemic – THG has been running trials, using dedicated cargo flights to service its global operations, particularly across the Asia region.
THG says the “significant success” of these trials has provided the company with the confidence to embark on not just the charter agreement, but “to go a step further” in announcing its own cargo airline.
“This led us to accelerate our trials for dedicated cargo aircraft to link together our own global manufacturing and distribution centres. These trials have proved a great success, resulting in today’s partnership with Singapore Airlines,” Moulding adds.
This partnership involves an agreement to charter a series of more than 100 flights which will be largely carried out by B787 and B777-300ER passenger aircraft, operating as cargo only. Initial sectors are said to be SIN-NRT, SIN-ICN and SIN-TPE.
“The trials have also given us the confidence to supplement this partnership with the launch of two of our own cargo planes, under the livery of “THG Air”,” Moulding says.
This will involve the purchase and operation of two of its own dedicated freighters – likely A330-200Fs – which will be based out of Manchester Airport (MAN), where THG has its headquarters. THG expects the freighters to be airborne by end-October 2020.
The online retailer says THG Air will also form a key pillar of the THG Ingenuity Service Offering for clients seeking market access in the Asia region.
The partnership with SIA comes as THG continues to expand its global distribution centres. In recent months, THG has opened three new centres – one in the US, one in Singapore and one in India. A further six overseas distribution centres are planned before the end of the year.
Moulding notes that the partnership with SIA places THG in the strong position of having secured routes from UK to Asia “for the foreseeable future”. This will enable the company to keep its supply chain moving and delivering goods – including essential items such as vitamins, personal care and hygiene products.
“Navigating the current crisis by forming these partnerships is an integral part of our strategy for THG Air, which will cement our standing as a global leader in e-commerce and technology and brings us closer to millions of customers,” Moulding adds.
Sherine Teo, vice president of Digital and E-Commerce Logistics, Singapore Airlines, comments: “We welcome this partnership with THG, which facilitates the movement of goods across Asia and supports global supply chains.
“This collaboration will leverage Singapore Airlines’ flight network to ensure timely and efficient supply and delivery of THG goods to its customers.”