Why We Invested in Aircon: Air Freight Consolidation Made Simple

After the past several years, are you still triggered by the words “supply chain?”

Pandemic-era memes brought universal awareness to the global headache created by the COVID-19-induced supply chain delays. But even before “shipageddeon” entered the public lexicon, our world’s supply chain was an absolute value sieve, plagued with inefficiencies. This is particularly true across the air freight market.

Air freight, sometimes called air cargo, is the shipment of goods through an air carrier. And the inefficiencies in air freight can be boiled down to a singular, often absent word: consolidation.

Large air freight forwarders benefit from economies of scale. They have a high volume of shipments going to the same destination, so they’re able to consolidate those shipments, maximize a cargo plane’s available space, and offer a better rate to their customers. This is a distinct competitive advantage, because the vast majority of air freight forwarders — approximately 80% – are not large and do not have the gateway infrastructure, scale, or cargo mix to optimally consolidate their freight. David, meet Goliath.

Good news for David! Aircon was founded to allow forwarders of all sizes to have access to consolidation options worldwide, creating operating efficiencies, improving margins, and giving the freight forwarders they partner with a competitive edge.

And as firm supporters of bold founders solving painful problems, today we’re proud to announce that we’ve backed the Aircon team, leading their $3.3M Seed round.

Transforming Air Cargo With Shared Air Freight Gateways

Even before examining the challenges of air freight consolidation, it’s worth noting that the air freight market at large appears to have missed the boat — or flight — on Digital Transformation. The industry operates largely through manual processes involving spreadsheets, phone calls, and paper. And while consolidation cuts cost by ~40%, most forwarders skip out on it altogether because it requires detailed coordination and a physical gateway location.

Aircon is the industry’s first digital platform that enables consolidation across the entire air freight market. Moreover, Aircon optimizes the entire air freight booking, monitoring, and cost-cutting process.

The Aircon team has unlocked the benefits of consolidation for their customers by creating shared gateways and proprietary algorithms to optimize routes and consolidation efforts. The Aircon algorithms pool shipments that combine dense and voluminous cargo to achieve the best consolidation available while passing the “net effect” of savings back to the freight forwarder.

This innovative approach will reshape the air freight industry.

Remaining competitive and winning business against the “goliaths” of the forwarding world is the top priority for the 50,000+ forwarders that Aircon targets, and export consolidation alone is a $5B market opportunity. To reach an annual revenue of $100M, Aircon will need to move 62M kg of air freight — a mere 1.1% of the total air freight handled by non-top-10 freight forwarders in the US today. This indicates just how much value can be unlocked from this overlooked market opportunity.

The key to success in this complex market will be insider knowledge, and the Aircon founders have that in spades.

Uniquely Qualified Founders With Data Science and Air Fright Expertise

We’ve said it before and we’ll say it again: We don’t back companies; we back teams. Uniquely qualified teams. We place extra emphasis on “uniquely qualified” in this instance because of the insider industry knowledge that’s required to unlock this opportunity. Fortunately, the founders of Aircon, Chis Condon, and Irl Wakefield, have extensive industry and technical expertise.

Irl Wakefield, spent close to 15 years working at one of the handful of forwarders in the world that does air freight consolidation, Expeditors. Irl managed Air Export for the business performing the exact day-to-day spreadsheet work that Aircon is now digitizing and offering as a service. Irl is one of a handful of people in the world who deeply know how this work gets done.

Chris Condon, Aircon’s founder and CEO, was the Export Department Manager, also at Expeditors, working alongside Irl, for over a decade before taking roles as CEO at Trans-Trade and TriCon Logistics (acq. by Maersk), both focused on supply chain optimization.

Aircon has also welcomed a new CTO, Dennis Oleksyuk. Dennis was at DataRobot for the past 5 years as VP of Engineering and Director of Engineering. Before Data Robot, Dennis led a team of engineers building an automated data science solution at Nutonian, which was acquired by DataRobot. Dennis is a hard-charging technical leader and a great complement to the team.

The team’s deep understanding of the problem they’re solving was self-evident in each touchpoint we had as we got to know them. However, their expertise was further reinforced by their customers and the source of the introduction: we were introduced to Aircon through our portfolio company Project44, a leader in real-time transportation visibility. The Project44 team knows talent when they see it, and we’re grateful for their introduction to the Aircon team.

Taking Off & Tackling What’s Next

In the short time we’ve known the Aircon team, we’ve been impressed with just how much progress they’ve made. The team has secured agreements with major airlines, now able to maximize their capacity through the Aircon platform, and has built a core gateway network of 11 ground handling agencies with 36 total lanes. They are already able to provide rates significantly better than the retail rates offered by the airlines or through other booking platforms.

Aircon has overseen a substantial 3,951,072 kilograms across 5,405 shipments using its platform, highlighting the robust market demand. With the recent infusion of capital, Aircon is strategically positioned to reinforce its engineering workforce, fueling advanced process automation and route optimization to heighten speed and cost-effectiveness for customers. Additionally, Aircon is amplifying its go-to-market strategy to harness a greater array of opportunities and propel the startup’s growth trajectory even further. Learn more about Aircon here!