GSE buyer: North Hub Services

posted on 27th June 2018

North Hub Services Ltd is an independent ground handling company, privately owned by Baltic Aviation Systems and HAVAS Ground Handling Services Co. It provides airport services in Latvia, Sweden and Finland. Simons Zitcers (SZ), Ramp Manager, North Hub Services, tells Airside International (AI) that the goal was to launch the ground handling company with brand new equipment – but what was the procurement strategy?

AI            When NHS was established in 2009, in order to acquire the equipment you needed on the ramp to sustain your operations, what did you do first? Contact equipment manufacturers? Speak to a broker? Evaluate the second hand market? Approach a financier to lease the equipment?

SZ           The first step was to secure access to available funding and, in our case, we arranged a lease agreement with our bank. All prospective NHS operations are presented to our financiers as individual projects and we aim to secure a leasing agreement from the very start. Before launch, we went through a manufacturer process. Our goal was to launch our operations with brand new equipment. We used GSE magazines and recommendations from shareholders. NHS evaluated the second-hand market as well, but just for very specific types of GSE. Today almost all of NHS equipment is brand new.

AI            How has HAVAS’s interest in NHS assisted with the procurement of GSE? What expertise have they brought?

SZ           After HAVAS became a shareholder in North Hub Services, we received excellent potential and opportunities, as well as extensive know-how and networking input for GSE procurement. As North Hub Services we carry out joint negotiations with HAVAS and order equipment as part of HAVAS’s volume orders. The HAVAS GSE Maintenance Center provides effective support to the NHS Maintenance center with engineering potential and, through the Operations Division, with GSE operations training as well.

AI            What special considerations are there in relation to operating ramp equipment in the very cold Baltic region? What has been your experience?

SZ           The specifics of the Baltic region relate to temperature differences between the summer and winter seasons – on the ramp-side in summer we experience +50°C; in winter -38°C. These are the weather extremes that define the working environment we face annually. Our main target and approach includes winterisation kits for all types of GSE – even for motorised and towable units. Only a handful of GSE suppliers have managed to provide winterisation kits that work properly and effectively under such conditions. Some units end up freezing at temperatures of only -20°C. We are glad to have solved the issue and are working effectively, even in extreme weather.

AI            Given the cold winters, what support have you required from manufacturers to ensure equipment is working at all times and is this something the manufacturers have been able to deliver?

SZ           Manufacturer representatives are required to visit cold weather regions in heavy winter seasons. Scandinavia or the Baltic States are a good training ground for them. The visits and hands-on experience helps them to avoid making unachievable promises and provides good real-time experience in such extreme conditions. This practice has helped the providers to make targeted offers – to NHS too. If we order brand new GSE, an important point is always sustainable operation, even if it’s extremely cold for prolonged periods of time.

AI            Have you put in place your own maintenance teams or have you acquired all new equipment that is under warranty?

SZ           Our experience shows that technical drawbacks may occur even if you have new GSE in full operation. NHS operates extensively with brand new GSE and still experiences cases when contacting manufacturers under warranty is a must. The range of issues is varied, but one thing keeps occurring – the challenge to the quality of the GSE for winter operations.

AI            How environmentally friendly is your GSE? Have you bought new and therefore the least polluting equipment? Have you looked at electrically powered equipment and even biofuels?

SZ           North Hub Services follows the national requirements of each country in which we operate. If there are any regulations about electrically powered GSE, NHS orders it accordingly. For diesel engines, we are always looking for the latest upgrades – for example, a lot of our GSE fleet is equipped with EURO 3 type engines.

AI            Have import costs been a consideration? Also, have you had to consider carefully the time it takes to import equipment when selecting your GSE fleet?

SZ           Import cost is very important as prices can vary extensively when you compare the transportation cost from inside the EU or from the USA or Asia. Therefore, North Hub Services typically selects GSE in the specific area of operations – at the moment the EU. Import times from different areas of the world are a secondary issue since the delivery time differences are minimal. More important is the GSE manufacturing time that varies among manufacturers – sometimes for the same type of GSE it can vary from four weeks to six months.

AI            How important is the quality of small parts – like switches and handles – when you make your equipment choices?

SZ           Very important as the quality of small parts can fail to live up to our expectations. Handles and switches have to be of the finest quality as operators wear down these parts a lot. During on-site visits, NHS representatives pay utmost attention to this and ask manufacturers to make adjustments and all necessary modifications.

AI            What – in broad terms – does your GSE fleet now comprise and what is the rough value of this fleet?

SZ           Today, North Hub Services operates the full range of GSE – starting with small equipment like baggage trolleys and ULD dollies to heavy duty equipment like high loaders, aircraft push-backers and alike. The current total value of NHS GSE fleet is more than €8 million.