Air Transport World

Doing its own thing: Airborne Express is no. 3 among integrated carriers but no. 1 for what it does and the way it does it. (Company Profile)

Robert S. Cline is a financial specialist who understands that being No. 1, or even No. 2 in any industry is not necessarily the single most important thing. Earning good, solid profits is.

As chairman and CEO of Airborne Express, the No. 3 U.S. integrated carrier behind Federal Express and UPS, Cline has spent the last seven years steering his company into a special niche designed to avoid the pitfalls, if not the outright mistakes, facing his two biggest competitors.

In so doing, he has made Airborne Express one of the fastest-growing carriers in the integrated-freight industry. In the 5-year 1986-90 period, Airborne recorded 35% growth per annum in shipments, while revenues more than doubled, from $542 million in 1986 to $1.18 billion in 1990.

A key strategy of Airborne's operations is direct sale to high-volume corporate accounts, Cline said. "We're not in the retail business. We don't go for the small user. This allows us to be a lower-cost operator. It's more efficient to pick up 10 packages at one stop than one package at 10 stops."

Cline said that Airborne has lower costs then FedEx "by a fairly substantial amount." Based on 1990 figures, Airborne's cost per shipment was $10.73 domestically and $82.59 internationally, for a total average cost of $12.61, the airline says. Cost per shipment has dropped steadily, from $13-62 in 1989 and $15.73 in 1988.

Another key difference between Airborne's operations and those of its competitors appears in the international arena. While its two main competitors are attempting to set up their own operations overseas, Airborne's strategy is to form associations with national companies in the foreign countries involved. …

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