Co-founder of Azul expands logistics company

The air transport market is agitated, pending the outcome of the sale of Avianca Brasil and the consequences for the commercial aviation market. However, there are entrepreneurs willing to venture into this market and build a new company, seeking still poorly developed niches. This is the case of Gerald Lee, co-founder of Azul and former vice president of business development at JetBlue. After spending years in the direction of major passenger airlines, he invests in the expansion of Modern Logistics, a logistics company with a focus on air cargo transportation. The company seeks to capture investments of 200 million dollars to expand its operations. For this, he hired the investment bank Evercore, which will seek new foreign investors. The company seeks a new contribution to the purchase of aircraft and construction of new distribution centers. She's got five planes today. As a comparison, Gol has 122 aircraft in operation, Azul, 125, and Latam group, 312. The biggest investor of Modern is the DXA Investiments, which has already made contributions totaling 50 million dollars. The company received the first investment in 2014 and, until now, has raised 100 million dollars. The logistics market in Brazil today has a cost of 811.8 billion reais. However, only 0.4% of the products are transported by air. About 61% are sent by highways, 20.7% by railways and 13.6% by the waterway. The half-road, i.e. by pipelines, accounts for 4.2% of the total, according to data from the National Transport Confederation. Although the air transport market is small, for Lee, "flying the merchandise is not a luxury" and can be accessible to more companies with the development of the logistics network. That's because airplanes are a much faster way to get the product to its destination. The average time per plane is only a few hours, while transport by truck between São Paulo and Recife, for example, can take from 3 to 5 days and the trip between São Paulo and Manaus may take more than 30 days. Lee bets that the gain in time can mean gain in efficiency and that this can attract the attention of customers. Modern has about 50 customers, such as pharmaceutical companies, agricultural inputs manufacturers, electronics companies, beauty industries and car and motorcycle assemblers. It also carries special loads, such as live animals, high-value electronic equipment, fragile crystals or crockery and explosives. This type of product requires care, which makes it difficult to transport in passenger planes. One of the customers is Harley Davidson, for transporting products from its factory in Manaus to 21 dealerships nationwide. The company came up with five planes, four Boeing 737 and a Gran Caravan Cessna, adapted for loads. For the second semester should receive two more Cessna and a Boeing 737 and the plan for 2022 is to reach 20 aircraft. It also offers road transportation, with 14000 vehicles from outsourced partners. In addition to transportation, Modern has now offered inventory management to its customers. It has five distribution centers located near airports and should open two more in the second semester.