Challenge Group Exclusive interview with Yossi Shoukroun, CEO.

Massive expansion on the cards for Challenge Group

The Challenge Group is a boutique and comprehensive logistics services provider offering global door-to-door transportation with a focus on complicated cargo. In an expansive interview with Global Supply Chain, CEO Yossi Shoukroun explained the reasoning and explanation behind the slogan ‘Challenge Accepted’!

The past two years have no doubt been the most challenging in the entire history of aviation and yet, for one multinational logistics services provider and conglomerate, challenges are what it thrives and, literally, delivers on.

Welcome to the blossoming Challenge Group that characterizes itself as the experts in international cargo solutions.

When you combine experience, an extensive skill set capable of tackling any air cargo and aviation situation, and when defining individual, customercentric solutions is in your company’s DNA, then adopting Challenge as your name and ‘Challenge Accepted’ as your corporate slogan, is a very logical move, a corporate spokesperson affirmed.

It is also part of a major rebranding that has been underway ever since the Group embarked on its harmonised restructuring in 2020.

Challenge Group composition

So, what is the Challenge Group and what does it constitute? It comprises eight associate companies and subsidiaries operating under the corporate umbrella operating from multiple locations. Challenge Group is a unique, international air cargo conglomeration offering tailored air freight industry solutions from handling, air and ground logistics, to aviation services, for a wide range of industries and commodities.

Headed by CEO, Yossi Shoukroun, the Group incorporates three airlines: CAL Cargo Airlines based in Israel; Challenge Airlines BE based in Belgium; Challenge Airlines MT and Challenge Air Cargo (the Commercial Arm of the Group) both based in Malta, its own ground handling company in Liege, Belgium; Challenge Handling, a strong European road feeder network out of Liege; Challenge Logistics, an aircraft and parts leasing division; Challenge Aviation, and a comprehensive line maintenance provider, Challenge Technic.

Global Supply Chain (GSC): The Challenger Group business by-line is ‘Challenge Accepted!’. Please expand on this corporate calling?

Yossi Shoukroun (YS): Indeed our motto is ‘Challenge Accepted!’ We are an air cargo conglomeration that works to make the impossible possible. We never say no, and we don’t give up. That is both our mindset and our approach to business. Our mission is to be a first-choice carrier, and to empower our customers’ expansion by providing end-to-end logistics solutions.

GSC: What entities and solutions providers constitute the Challenge Group?

YS: Challenge Group currently consists of 3 airlines (CAL, Challenge Airlines BE, and the upcoming Challenge Airlines MT), Challenge Handling in Liege, Challenge Aircargo which is our commercial arm, Challenge Logistics providing pan-European and US roadfeeder services, Challenge Aviation to manage our different assets, and Challenge Technik which is dedicated to maintenance activities.

GSC: What are the unique airfreight solutions offered by the Challenge Group? Are these all limited to airfreight only?

YS: We specialise in the transport of big and complex commodities, offering end-to-end solutions (logistics, handling, airfreight capacity), charter operations, and tailor-made solutions. We are in full control and ownership of the entire process, providing all related services through our subsidiaries.

GSC: Which European countries does the Challenge Group operate in?

YS: Our hub is Liege, where we operate all our flights. However, we offer an extensive road feeder service able to reach any destination with Europe. We handle more than 5000 trucks a month.

GSC: What is the range of services offered by the Challenge Group and specifically what are your strengths / specialties?

Yossi Shoukroun, CEO, Challenge Group, responded to an exclusive Global Supply Chain interview.

Yossi shoukroun

During most of his career spanning over 30 years, Yossi Shoukroun has been involved in Airports and Air Cargo Industry, as an Executive and line management in General Management, Operations Management, Planning, Project Management, Business Development and Financial Management.

Shoukroun is an experienced Managing Director with a demonstrated history of working in the airlines/aviation industry. Skilled in Negotiations, Budgeting, Business Planning, Operations Management, and Analytical Skills.

Shoukroun is a team member, leading the airline’s growth and success with vast experience in Supply Chain Management and complex logistics systems.

Since 2021, he has been promoted as CEO of Challenge Group and is now based in Malta.

YS: Our aim is to cover the complete supply chain process by ourselves–that includes transportation, handling, sorting, trucking, airfreight capacity. Our mission is not only to be considered a carrier of choice by our customers, but a reliable business partner that empowers their growth and success by providing end-to-end solutions tailored to their specific needs.

GSC: What industrial sectors / verticals does the Challenge Group cover for its clientele?

YS: 65% of our cargo is special cargo (mainly helicopters, cars, horses, oil & gas equipment, pharma, aircraft engines). We are looking to expand our product portfolio and are open to providing any value-added services our customers may require to perfect their supply chain.

GSC: What opportunities and challenges do you foresee for the Challenge Group going forward?

YS: We have gone through an intense period of growth over the past two years. We want to continue to grow, but in a sustainable way, and our people will be the key enablers of this process. We have a detailed strategy in place regarding fleet renewal and new destinations. Stay tuned for more news to come….watch this space!

GSC: Who are among the top 5 clients of the Challenge Group?

YS: Every customer is important to us, and since we handle high percentage of special cargo, our relationship with customers is special as well.

GSC: How did the Challenge Group perform in 2021 and what is the outlook for 2022?

YS: 2021 was a record year for us. We kept our performance up throughout, and the results of the first quarter of this year point to 2022 probably being a similarly successful year.

GSC: How did the pandemic impact your operations and revenues, if at all?

YS: Like any other industry stakeholder, we were unprepared at the beginning, and faced a common uncertainty. However, we learned to be more efficient, invest more in digital technologies, review our processes, and develop a more consistent business continuity plan.

GSC: What general concerns / challenges confront the generic freight sector in the countries you operate in?

YS: Globally, the past couple of years showed us how fragile the supply chain is, and how things can change quickly, so we need to be flexible and adapt our business model to mega changes.

GSC: What are your growth / expansion plans for the short and long term futures?

YS: Our strategy is to triple the current fleet and operate12 aircraft within the next 5 years. We plan to add 4 Boeing 76F and 4 77F converted aircraft, and have applied for a new AOC in Malta, where Challenge Group has its headquarter.

Moving to a twin-engine aircraft fleet will give us a more sustainable business model. We are evaluating new destinations for this additional capacity, and I can confirm that the decisions on those choices will be taken together with our customers and business partners.

GSC: Are you planning overseas expansion or JVs / partnerships?

YS: As mentioned before, we want to grow with a specific plan based on strategic partnerships or projects that enable us to make best use of our industry experience and strengths.

GSC: Is the Challenge Group planning a foray in the UAE / GCC or the Middle East region? Why?

YS: Our story began in the Middle East, and we recently began deploying capacity into the U.A.E. to support our customers in dealing with the constraints of the seafreight business on the Far East, EU, and US trade lanes.

GSC: Give us an example of one or two most challenging / daunting tasks performed by the Challenge Group?

YS: We carried out full charter operations of PPE and related commodities – including vaccines, distributing these throughout Europe and the U.S. We handled all of the horses for the last Olympic games. Unique paintings and other artwork for large exhibitions, are also always very special projects.

GSC: What is the short and long-term vision for the Challenge Group? Where do you hope to steer the company?

YS: We are definitely moving to the next level and aim to become a key player in our industry by adopting a new and flexible business model based on tailormade end-to-end solutions covering all the areas of the logistics supply chain.

The Group’s cargo airline experience dates back to its CAL Cargo Airlines’ beginnings in 1976, and its handling division (previously known as LACHS) was established in 1997. The other companies were founded over the course of the past six years. Malta-based Challenge Air Cargo is the latest addition and is due to commence operations this year.

Core expertise

Challenge Group’s core expertise in airfreight, handling, and logistics, has established it as a leading provider of reliable, integrated, and tailor-made, air-cargo door-to-door solutions. In fact, 65% of its business is non-standard cargo that requires innovative, industry-specific handling solutions: many of these have been for outsize freight shipments.

One reason why, alongside a host of state-of-the-art and highly automated air cargo handling equipment and facilities, the Group is in possession of Europe’s largest 52-tonne high-loader, located in Liege. From temperaturesensitive shipments (IATA CEIV Pharmacertified in the air and on the ground), to dangerous goods, all the way through to live animals (Challenge Handling also manages the ultra-modern Horse Inn hotel, one of the finest in Europe, at Liege Airport: more than 250 horses passed through it to on their way to the Tokyo Olympics last year, for example); Challenge Group is trained, certified, and experienced in handling and flying all kinds of commodities.

Challenge Airlines (BE) was established in April 2017 and received its AOC (Air Operator’s Certificate) in April 2019 from the Belgian CAA allowing a start of operation in May 2019. In July 2019, we obtained the USA OPS SPEC from the Federal Aviation Administration (FAA) enabling operations to the United States. In September 2020, we obtained the China OPS SPEC allowing us to operate to China as well.

Trebling capacity

Over the last four years, the company has trebled its capacity and now handles 300,000 tonnes of cargo per year, with an ambition to reach half a million tonnes annually by 2023. Today, it counts 850 employees and a fleet of four B747-400F.

These will soon be complemented by four 767-300BDSF and four 777-300ERSF conversions over the next two years, Challenge Group follows a solid, 5-year expansion strategy in terms of further fleet growth, exploring new business areas, and continuing to develop its rapidly expanding first and last mile services across Europe and the US, to provide quality end-to-end solutions to its customers.

“Air cargo is a people-driven industry, full of down-to-earth, hands-on characters. We identify strongly with this direct, solution-focused approach, and have incorporated company values that precisely reflect this attitude: Passion, Authenticity, Agility. The perfect ingredients for the success of our ‘Challenge Accepted’ promise. We enjoy getting things done!” says Yossi Shoukroun, CEO of Challenge Group.

A modern, unified digital presence is also part of the new branding scheme, aimed at bringing the Group’s different divisions together. Yet, one feature of the Group that is already inherent and identical across all of its companies, and in the words of the CEO, is the attitude of its people: it is their can-do approach, creativity, and total customer focus, that ensure the highest levels of quality, safety, and efficiency in solving all challenges entrusted to Challenge Group. Challenge accepted – Challenge solved!