Amerijet International Airlines, a rapidly growing all-cargo airline based in Miami, is shutting down its freight forwarding unit iTN Worldwide to concentrate on its airline business.
CEO Tim Strauss informed iTN Worldwide employees last Wednesday that the company will cease operations at the end of April, according to a copy of the notice shared with FreightWaves. “This was a very difficult decision and comes after a lengthy, careful and thorough review of our portfolio of businesses,” he said.
ITN, which manages air and ocean shipping and customs clearance for import/export clients, has 27 employees in the U.S., Puerto Rico and Trinidad. Amerijet, now the fourth largest cargo airline by volume at Miami International Airport, has 1,046 employees, including 245 pilots.
“As iTN represents a nominal percentage of Amerijet’s overall financial results, Amerijet made this decision to focus on growing its core airline business. Over the past two years, Amerijet has been surgically focused on a growth strategy, tripling the number of aircraft it operates, with additional converted 767-300F aircraft on order arriving over the next two years,” Amerijet Chief Commercial Officer Eric Wilson said in an email response to FreightWaves. “Freight forwarding has not been a core business. The freight forwarding industry is very fragmented and to be successful in forwarding requires scalability.”
Exiting the forwarding business will marginally benefit Amerijet’s bottom line, but the main reason for the change is streamlining management’s responsibilities — not financial, Wilson emphasized. Management wants to spend its time on expanding markets for the airline and managing its local delivery and national road feeder service.
Selling iTN was not an option because the company was so small that the transaction expenses outweighed the expected value, he added.
Strauss has implemented a rapid growth strategy since taking the helm 2 ½ years ago by growing the fleet, opening new markets and modernizing the company’s entire IT system.
Amerijet’s fleet has grown to 22 aircraft, including 16 B767 medium widebody freighters. The airline last year integrated six Boeing 757 converted freighters into its fleet and began flying a Boeing 767-300 medium widebody provided by Maersk Air Cargo. Amerijet crews have been operating the plane between Seoul, South Korea, and Greenville-Spartanburg International Airport in South Carolina since Oct. 31.
Amerijet also began using a cloud-based cargo management and reservation system, as well as new crew scheduling and revenue management systems, while also moving its maintenance system to a cloud computing environment.
“We wanted to get those things done because we were not going to be able to grow at the pace we needed to with the old IT systems that we had,” Strauss said during an interview at his office in November.
A few airlines, such as Maersk Air Cargo, are adding an air logistics component to their business, and forwarders, such as National Air Cargo are also cargo airlines. Maersk Air Cargo has an advantage being capitalized by publicly traded shipping behemoth Maersk.
Strauss’ message said iTN employees will be offered opportunities to join Amerijet. Amerijet will continue to serve iTN courier and air cargo customers.