Business Monday

AIR CARGO

Centurion Air Cargo grows, eyes new international markets

 

Centurion Air Cargo

• Founder and chairman: Alfonso C. Rey.

• Headquarters: Miami International Airport.

• Business: International air cargo.

• Fleet: 11 McDonnell Douglas MD-11Fs and two Boeing 747-400Fs.

• Employees: About 950.

• Revenue: $750 million in 2012.

• Latest: Moved to a new 800,000-square-foot facility at MIA with ambitious expansion plans.

• Markets: Latin America and Europe.


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Centurion Air Cargo timeline

1991: Alfonso C. Rey acquired STAF Airlines, Servicios de Transportes Aéreos Fueguinos S.A., an Argentine-based carrier that operated Lockheed L-188 Electra, Boeing 757, McDonnell Douglas DC-10F and MD-11F aircraft.

1997: Rey and partners launched Cielos del Peru, a Peru-based carrier that operated Boeing 707F and McDonnell Douglas DC-10-30F aircraft. He later sold it.

2001: Rey launched Centurion Air Cargo after acquiring the air certificate of Challenge Air, whose assets were sold to UPS. Challenge had been the largest all-cargo operator to Latin America.

2008: Acquired Tradewinds Airlines out of bankruptcy proceedings. It now operates as Sky Lease Cargo with a fleet of six McDonnell Douglas MD-11Fs.

2009: Acquired Lynx Global, a logistics firm.

2010: Acquired Arrow Air Cargo, a Miami-based cargo line that operated Boeing 757F, McDonnell Douglas DC-10F and MD-11F jets.

2011: Launched freighter service from Miami to Amsterdam’s Schiphol Airport as a first step in expansion to Europe.

2013: Moved into new 800,000-square-foot center at Miami International Airport with 159,684 square feet of chilled warehouse, the biggest of any North American airport.


mbrannigan@MiamiHerald.com

As Alfonso C. Rey, founder and chairman of Centurion Air Cargo, tells it, he moved to Miami from Argentina in 1986 with $7,000 in his pocket and “zero — negative 10 percent” knowledge of English.

His punchline: “Today, I have less than $7,000.”

Belying his remark: Rey, 51, has just moved his Miami-based air-cargo business into a new 800,000-square-foot facility on prime land at Miami International Airport. The highly automated, state-of-the-art center at 4500 NW 36th St. should enable Centurion to save time and money over the scattered locations it previously occupied at MIA and offers huge room for growth.

Centurion is hiring. Its fleet is growing. And the company is eyeing new markets, some of them beyond its U.S.-Latin America stronghold.

Yet Rey’s quip about finances hints at the perilous nature of the air-cargo industry, a cutthroat arena of razor-thin margins that is shaped largely by outside forces from the economy to the weather to labor relations to politics to war.

Investor Warren Buffett’s famous line — “How do you become a millionaire? Make a billion dollars and then buy an airline” — is equally fitting to the cargo side of the aviation business.

For years, the air-cargo industry has been plagued with too much capacity chasing too little business. Jet fuel — the single largest cost, currently consuming more than 40 percent of expenses — is essentially beyond management’s control. Since the terror attacks of Sept. 11, 2001, security costs have skyrocketed and regulations are tough.

Last week, a shipment of horses from Miami to Caracas was postponed after the death of Venezuelan President Hugo Chávez held up paperwork. When Chile’s salmon industry suffered production woes several years ago, it crimped shipments of fresh fish to Miami. Volcanoes, earthquakes, hurricanes all mean delays and missed opportunity.

“Everything that affects your life every morning affects our business,” said Rey, who built his privately held cargo business through a series of acquisitions, some in bankruptcy-court proceedings. He has bet heavily on Miami’s place as the gateway to Latin America, a position that has blossomed fully in recent years.

“I’ve always believed in Miami,” he said. “Now, we are the geniuses: Miami is the center of the planet.”

Miami International Airport, which is owned and operated by Miami-Dade County, ranks third among U.S. airports for air-cargo volume and is number one in perishable cargo, accounting for 69.7 percent of U.S. airport tonnage in 2011. The lion’s share of that is fresh fruits and vegetables, flowers, and fish, coming from Latin America. No other airport is even close.

Miami-Dade’s outgoing aviation director, Jose Abreu, recently told local business leaders that cargo traffic at MIA rose more than 4 percent in 2012 to a record 2.1 million tons.

About half of Centurion’s cargo is perishable: Besides fish from Chile, it carries fresh flowers from Colombia and Ecuador, and asparagus from Peru. Southbound, the fleet of McDonnell Douglas MD-11 freighters carries a lot of electronics and telecom equipment, car parts and other manufactured goods. The carrier has carved out a niche in transporting horses, including Argentinian caballos criollos, the beloved steeds of the gauchos, which are popular, among other things, in polo.

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