Mercado Livre receives the first cargo aircraft from GOL to reduce delivery times in the North and Northeast

Mercado Livre receives the first cargo aircraft from GOL to reduce delivery times in the North and Northeast

On Tuesday (23rd), Mercado Livre (MELI34) from GOL (GOLL4) received the first of six cargo aircraft contracted to reduce order delivery time for customers in the northern and northeastern regions of the country.

Mercado Livre’s promise is only one-day delivery in both regions – today, the company says it takes 8-9 days in Manaus (AM) and 4-5 days in Recife (PE) and other northeastern capitals. For this purpose, it will receive 2 more Gol aircraft this year and 3 more in 2023 (the agreement also provides for the possibility of contracting for 6 more aircraft, to be delivered by 2025).

“We are 100% committed to reducing delivery times in remote areas of the country,” says Fernando Yunus, Senior Vice President of Mercado Livre and in charge of the operation in Brazil. “It’s a revolution to get to these areas at the same time of delivery as those who buy in Sao Paulo or Rio.”

Currently, about 40% to 50% of the company’s shipments in the country take place in São Paulo and about 60% in the southeast region. In addition, less than 5% of packages are flown by plane – with the agreement, the goal is to reach at least 11%. “But 11% is not the maximum,” says Yunus (see more below).

Mercado Livre intends to reduce the delivery time from 8 days to 1 day in the northern region of Brazil (Disclosure/Mercado Livre)

Hanging the phone in the face

The agreement is also relevant to GOL, which is still trying to recover from the effects of the pandemic on the airline industry. Through the partnership, Gollog (the company’s freight and order transport arm) will increase cargo capacity carried by 80% when the six aircraft are in operation.

Negotiations between the two companies began in May 2020, at the height of the first wave of the pandemic (when commercial flights disappeared and online shopping exploded). But the deal was not announced until April of this year.

Despite the happy ending (and an exchange of praise at the plane’s handover ceremony, which took place at Congonhas Airport), Gollog CEO Giulio Perotti says the negotiations weren’t easy. “We spent many nights talking, sometimes hanging up the phone, because that’s how good things happen.”

To meet Mercado Libre demand, GOL is converting Boeing 737-800 cargo planes and customizing the fuselage in yellow and the company’s logo. The entire interior of the aircraft is adapted to carry 10,000 to 11,000 packages per flight. (see pictures above and below).

Gol Boeing 737-800 has been adapted for delivery of the Mercado Livre (Photo: Lucas Sampaio/InfoMoney)

1 billion Brazilian riyals in 5 years

The company is replacing its Boeing 737-700 and 737-800 fleet with a new 737 MAX (36 aircraft are currently in service). Part of the decommissioned aircraft has been returned (and acquired under the leasing model), and part is being converted into cargo aircraft (such as Mercado Livre aircraft), according to GOL Linhas Aéreas president Celso Ferrer.

“I was [um avião] Of the passengers, they left for conversion and will now continue flying for another ten years,” Ferrer says of the modified Boeings. The company president says the current fleet consists of 140 aircraft and that the goal is to use about 8% to 10% of them to transport cargo. “Do not distort the operating model. [da GOL] Because it’s still one fleet,” says the Boeing 737 executive.

Perotti, CEO of Gollog, says the agreement “expands our operations in Brazil, increasing the range of services provided, which should represent additional revenue of R$100 million still in 2022 and another R$1 billion in the coming years.” 5 years”.

The interior of Gol’s Boeing 737-800 has been adapted for Mercado Livre delivery (Photo: Lucas Sampaio/InfoMoney)

How are the births and what will they be?

The plane delivered on Tuesday (23) will be put into service next week, September 1, making 4 daily flights between São Paulo and capitals in the Northeast (two round trips). The first destination will be Fortaleza (CE), followed by São Luís (MA) and Teresina (PI) – which will be part of the same route.

With the arrival of the next aircraft, the next capitals that will receive daily flights from GOL-modified cargo aircraft will be Recife (PE) and Brasilia (DF) – in this case, the Mercado Livre will replace a smaller aircraft, the Embraer E-190 from Azul, for Boeing” New”.

“The first flights will be directed to the cities of Fortaleza (CE), São Luis (MA) and Teresina (PI), where the current period of 4 days will be reduced to just 1, taking into account the loads stored in ‘Fulfillment’. We will reduce the delivery time by up to 80% %,” says Yunus (“full fill centers” are Mercado Livre’s warehousing distribution centers).

Mercado Livre currently operates an air delivery network with Embraer E-190 models, with three aircraft from Azul and two other aircraft from Sideral Linhas Aéreas (which currently fly to Recife and Goiania, but the contract will expire in October, due to the agreement with GOL).

Boeing x Embraer

The five aircraft that are currently operating are not exclusively for the company and can even transport goods to competitors, for example. In addition, the Mercado Livre also uses commercial passenger flights to transport smaller (and fewer) packages.

Pablo Navarrete, senior manager at Meli Air (Mercado Livre’s air operations), says “deliveries within 800 km don’t need a plane” in Brazil and are more advantageous by highways, so a lot of southeast, Parana and Santa Catarina It is served by the road network.

Navarrete also says that the Boeing 737-800 is more useful, because it can carry 10,000 to 11,000 packages per flight, versus 4,000 to 5,000 for the Embraer — thus, the E-190 will be used for air routes. “Shorter”, such as Porto Alegre, Vitoria and Goiania.

With the six Boeings in operation, Mercado Livre says the company’s air transport capacity will quadruple, from 10 to 40 million packages annually.

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