Challenge Group: Establishing excellence in Chinese e-commerce bound for Europe

Published: Tuesday, May 2, 2023

MALTA—China and e-commerce go hand-in-hand, and Liège, at the heart of the golden triangle in Europe, has quickly become the preferred European air cargo gateway.

“Challenge Group’s activity out of China is currently based on e-commerce demand which already makes up 30% of our business at Liège airport and saw 10% year-on-year growth in 2022,” said Yossi Shoukroun, CEO of Challenge Group.

e-commercegoods require a very different operational set-up compared to general air cargo because shipments are handled at piece level and sorted according to destination and last-mile delivery. “e-commerce from China must reach its European end-destination within maximum three, preferably two days,” Shoukroun explains.

ULDs from China’s leading e-commerce vendors, arriving in Liège, mainly from Zhengzhou Xinzheng International Airport (CGO) and Hong Kong (HKG), are transferred to Challenge Group’s handling’s dedicated second line warehouse, where they are broken down to house air waybill level and then built-up according to their destination country.

The main European destinations are all within comfortable trucking reach from Liège: Paris (CDG), Frankfurt/Main (FRA), London-Heathrow (LHR), Amsterdam (AMS), Malpensa (MXP), and Riga (RIX). Challenge Logistics provides the middle mile service directly to the distribution center at destination, where the last mile provider takes over domestic deliveries. This smooth end-to-end e-commerce solution speeds up the delivery process and is a more sustainable solution as it avoids multiple incoming trucks to Liège for shipment collection.

“e-commerce is the fastest growing commodity in air cargo and comes with its own highly specific requirements. End-to-end solutions from a single source remove the complexity for customers who otherwise need to individually engage with multiple supply chain stakeholders. Instead, using Challenge Group enables them to guarantee reliable timeframes to their end customers while we take care of all the logistical necessities,” says Or Zak, Commercial Vice President of Challenge Group.

This includes customs clearance in Liège, for example, which Challenge Group recently launched as a product offering together with the middle mile delivery to the first distribution point in the country of destination, which then becomes a domestic delivery for the last mile operator. “In establishing a solid e-commerce product, Challenge Group is adding a core vertical to its product portfolio in perfect alignment with its own growth plans, that sets it up as a perfect strategic partner for e-commerce,” he concludes.

A strategic partner that is experienced in dealing with one of the major challenges of e-commerce: Lithium Batteries (ELI & ELM). “Electronics containing Lithium Batteries are the main e-commerce commodities coming into Europe from China,” Or Zak explains. “Challenge Airlines is one of very few carriers transporting items containing UN3480 and UN3090. Our experts are alert and rigorously trained to comply with all international regulations regarding Lithium Batteries, to ensure maximum safety on board and in the warehouse.”

“With Liège firmly established as the main European e-commerce gateway for China, the next logical step for Challenge Group is to expand its footprint in China,” saidShoukroun. “Having noticed the change that is taking place in the supply chain business model in terms of stock management and delivery times, we are looking at new markets, China in particular, with a view to offering short and medium-haul air cargo network destinations. Our new, more agile fleet of four B767F, the ideal aircraft for e-commerce, could be deployed to link China and the Indian Subcontinent or Africa, for example.”

Partnership discussions are already underway with a major Chinese airport partner regarding a warehouse location. “A Chinese base will help us to further develop our end-to-end solution and reduce the delivery time to the final customer,” the Challenge Group CEO shared.