ACW General Sales Agents 28th February 22 by Azura International

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Your guide to the latest developments in the international airfreight industry

BUILDING A CUSTOMER BASE Digitalisation will transform the business IT IS ABOUT ADAPTABILITY IN ALL THINGS

The value of performance

28th February 22

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BUILDING A CUSTOMER BASE An airline interested in generating airfreight sales and revenue in a market that does not justify the cost of an office and staff members will turn to one of the most well-established business and commercial practices – a middleman on the ground, often with considerable local market expertise. A cargo General Sales Agent (GSA), to use a contemporary British slang term, “does what it says on the tin.” It sells belly-hold or maindeck capacity that prevents cargo going to rival carriers. A GSA, like any agent, is an intermediary appointed to negotiate and, if required, conclude contracts with customers on the part of the airline. The result is the freight customer has a contract with the carrier. GSAs are paid commission on the sales they make, usually on a percentage basis. The activities of the GSA sector are not insignificant for the airfreight business. Observers of the segment estimate that around a quarter of the global airfreight industry’s $50 billion annual turnover can be credited to sales made by GSAs. This equates to some $12.5 billion of revenue in a typical year. A carrier may contract with a GSA when setting up activities in a new market, to establish a presence and recognition in the local airfreight forwarder community. There is also a slight chance that the carrier has mis-read the potential of a market, judging a station or country location where the tonnage will not justify the establishment of a fully-staffed sales office. This is when the GSA steps in to save the day. A GSA can then fly a carrier’s flag, generating airfreight traffic and revenue in a win-win relationship. The GSA gets commission and the airline gets revenue. An agent, in legal terminology, is a person or company who has been legally empowered to act on behalf of another person or an entity. An agent may be employed to represent a client in negotiations and other dealings with third parties. The agent may be given decision-making authority. In a longer term, a professional GSA can build a market for an airline’s cargo capacity that previously did not exist. They will have, after all, a local knowledge that a carrier can lack. From there, the agent can leverage the airline’s reputation and service to generate sales. The GSA receives payments based on a commission structure based on a combination of retainer and commission on all units of cargo space sold in the region that it represents. All costs related to running the GSA’s business are the responsibility of the GSA including insurance, rent, general office expenses and any travel within the country or region needed to promote and sell the product.

What is a GSSA? Over recent years, a small confusion has crept into the distinction between a GSA and GSSA. The extra ‘S’ is significant. It signifies ‘service’. Not just ‘sales’. If a GSA can be considered a ‘dumb’ agency, just taking orders, a

GSSA is very much a ‘smart’ operation. While a GSSA also represents airlines in a specific region or country to commercialise airfreight capacity and to supervise complex local operations, it is this latter part of the description that separates GSAs from GSSAs. A GSSA is actually a third-party player representing airlines mainly in terms of cargo, monetising operations and undertaking administration services. This need has developed into the Total Cargo Management (TCM) solution. Paris-based ECS Group spells out what it offers as a TCM contact with a carrier. The appointment of a dedicated project manager to oversee the contract transitional period and act as a single point of contact between the airline and ECS Group; the set-up of a dedicated office; a customer relationship manager to act as single point of contact between businesses; regular meeting and performance reviews with airline clients; and the appointment of a full team for operation management based at the airline’s hub.

Ending the relationship As a middleman, there is a traditional dagger hanging over every GSA’s head: the cessation of a relationship with the carrier, the ending of a contract which, at the end of the day, is its income. If it is a fixed term contract, then the end date will be known or the contract may be renewed and extended. Sometimes an agent may have to the relationship when a conflict of interest develops with another, clearly rival carrier is taken on. While these may be tough, clear-headed commercial reasons, there is one bittersweet one: the GSA has become so successful in creating business the airline determines it can justify the establishment of its own in the market and the use of its human assets. Last month, ACW reported that Qatar Airways Cargo has taken back its entire commercial operation in Spain from the start of February. “Qatar Airways Cargo extends its sincere and grateful thanks to ATC Aviation Services, which, over the past 16 years, has helped to build our Spanish footprint to what it is today: Qatar Airways Cargo is Spain’s number one air cargo service provider for the past several years,” Robertino Veltman, vice president Cargo Europe at Qatar Airways emphasised. “It is because our operations have now grown to such a large scale that Qatar Airways Cargo feels the time is right to insource its commercial and customer service activities across Spain. “Through meticulous planning and close and professional collaboration with ATC Aviation Services, we are aiming for a smooth transition so that business continues to run as normal. Our customers can look forward to many familiar contacts in the new Qatar Airways Cargo teams, and simply need to change over to the new central e-mail address in the interim.” “Thank you, ATC Aviation Services, for preparing us to fly fully on our own,” added Veltman.

“Qatar Airways Cargo extends its sincere and grateful thanks to ATC Aviation Services, which, over the past 16 years, has helped to build our Spanish footprint to what it is today”

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THE VALUE OF PERFORMANCE “Finally, one of the key issues of tomorrow lies in the exponential evolution of e-Commerce which is gradually becoming the biggest business stream”

For Adrien Thominet, executive chairman of ECS Group, “people have always been at the core of our projects” and are an integral part of the group’s raison d’être. Sustainability occupies a special place in ECS Group’s future. While there is the climate issue, in the end, sustainability encompasses many aspects and needs to be approached in an agile and flexible way. For example, he feels that the ECS Group needs to be aware of the need to rethink the very value of performance, from an economic point of view of course but also from a human point of view by taking more into account factors as well-being, commitment and social value.

Looking to the future Thominet thinks evolution has always been a key phenomenon. Traditional and standard GSAs are going to have to change to maintain their role. The pandemic has greatly accelerated the transformation of the air cargo industry and in particular the role of the GSA. First of all, digitalisation has become essential, but also in terms of responsiveness to customers’ needs by creating new services to meet their new requirements. This is how ECS Group has designed its abilities, modules especially developed to meet these needs. The ability to proactively create business opportunities and to organise charters will also become central points. He says: “The fact is that the key word when it comes to being a successful GSA is ‘agility’ and agility means being able to adapt to the unexpected, quickly and efficiently and therefore to change. No doubt, many investors will be attracted to the industry, including GSAs. Technology and data are very important and we need to push further the digitalisation of the supply chain to streamline operations and increase productivity through efficiency gains and streamlined communication. “GSAs will also have to offer more than the standard package. The needs of our customers are ever increasing, especially during such a period of change as we have just had. This is the idea behind our ‘Augmented GSA’ strategy to meet our customers’ needs and optimise their revenues precisely by improving airfreight operational efficiency. With this strategy, ECS Group wishes to continue to be avant-garde on the transformation of our industry by continuing to be attentive to the needs of our customers and by always improving to meet them and to adapt to a new business model. “Finally, one of the key issues of tomorrow lies in the exponential evolution of e-Commerce which is gradually becoming the biggest business stream. GSAs must be ready to meet the ever-increasing needs that follow this exponential growth: reduced complete transport time, last mile delivery, in particular by being in direct contact with shippers. Within the ECS Group, investments made in technological and digital transformation associated with the creation of a new multi-services, à la carte offer, clearly respond to the evolution of this growing demand. “Whether it is Mail&More, our GSA solution specific to e-Commerce or mail, or ECS Inside, our consultancy solution specialising in understanding and adapting to the new codes of our indus-

SUPPLEMENT try, we are committed to accompanying our customers or any other players in these inevitable changes.”

AI’s future In many ways the human factor is important, even crucial, in the operation and success of a GSA. From a rapport point of view, the cargo industry is an industry deeply based on human relationships. It is the relationships ECS Group builds with its customers, considers Thominet: “The bond of trust we create allows us to meet their needs and to accompany them on a long-term basis. So if AI indeed touches more and more aspects of our work, the human factor remains central. At ECS Group we believe that AI can sublimate the human being and we are convinced that it will create many jobs in our industry and in our group. We believe in the importance of our employees, their commitment, demonstrated at the highest level during the pandemic is clear. Thus, our entire CSR policy has been thought out and designed by placing people at the centre of development policies, so much so that sustainability is the fourth pillar of our Augmented GSA strategy. “Our business still relies heavily on the trust and energy of our customers and we are committed to upholding these values.”

Filled up bellies As the majority of cargo, of course, goes in the bellies of PAX flights, what can E$CS Group do to help their principals recover from the pandemic? How can they help to build back better? Thominet says: “First of all, GSAs can help companies to adapt to the passenger-to-freighter issue. With the pandemic, new needs have appeared, others have been reinforced and others have emerged without direct correlation. We have to be able to meet these needs. And this is why ECS Group has designed its abilities, ad-hoc, modular services that are tailored to the needs of each principal. “Our role is also to provide support by offering our vast and solid network at a time when the need for stability is paramount. Thanks to our tools, developed within the Cargo Digital Factory but also thanks to those to come with CargoTech, we offer our clients the ability to

optimise their revenues by relying on the vast sales networks that guarantee maximum fillings. “The whole group is committed to putting all its expertise and therefore proposing new solutions so that cargo creates sufficient revenue to help airlines to relaunch flights.”

M&A interests M&A is the cornerstone of the ECS Group. The main part of the group’s strategy is based on acquisition growth with the consolidation of leading GSAs around the world. The concept of consolidation exists among airlines, forwarders and GHAs. It seems natural that it should also apply to GSAs to provide the companies with structured processes on all their networks and financial backups. Thominet says: “In this sense, local heroes are a key energy for ECS Group. Our formula is as follows: M&A = right chemistry + mutual growth.” The group currently represents over 150 airlines, with seven TMC (Total Cargo Management) contracts. ECS Group is the world’s largest integrated Cargo GSSA network, comprised of 172 offices spanning more than 50 countries in Europe, Asia, Americas, Oceania and Africa. The organisation today includes over 1,200 people. “Yes - our abilities offerings are successful, on-demand services are the future of this industry. We have talent joining us.” Thominet adds: “Winning new contracts is our raison d’être as a GSA. Working with new companies and expanding our portfolio forces us to never rest on our laurels and to always bring more added value to our current and historical customers. This is how we go above and beyond every day. “Some contracts are regional, like with Royal Brunei, others are global. Some are Total Cargo Management contract; others are basic GSA contracts. Some companies come to us to have us manage only their back office and administration via our QualityStars service in particular. So there are as many configurations as there are customers. The relationship we create is just as unique and tailored as the services we offer.”

Our role is also to provide support by offering our vast and solid network at a time when the need for stability is paramount.

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GSAS MUST ADAPT OR DIE “The human factor provided by GSAs will always be of importance”

Heraclitus, a Greek philosopher, is often quoted as saying “change is the only constant in life.” This is a sentiment that Zafer Aggunduz, chief marketing officer of Netherlands-based Global GSA Group, can willingly embrace. In terms of where GSAs may be in a decade, he is direct: “Our industry is experiencing acceleration in technologic developments. This will ensure that the conventional GSA, as we know, will have to develop their services accordingly. “For decades GSAs had to adapt to the market evolution and the needs of carriers. It is a mistake to think that carriers appoint GSAs only to provide manpower abroad. GSAs are only successful when having local expertise, market knowledge, the right network with key agents and the capabilities to make the difference. These remain key factors. “There are two elements that will shape the future of GSA services in the next decade. Firstly, digitalisation is a key element. Automated booking platforms will be more accepted in the market. But these platforms will still have their limitations, and this is where GSAs will come in. Secondly, major carriers are not appointing conventional GSAs anymore. They are developing their own operation models, where GSAs become a more in-house solution, working more closely together and executing various additional tasks.” He considers: “As long as there is a demand for this expertise, GSAs

will adapt their role when needed, but will definitely continue to be of value.”

Human factor Despite the irresistible rise of AI and IT-based systems, Aggunduz feels the human touch will always have a place in the activities of a GSA. “The human factor provided by GSAs will always be of importance,” he says. “Despite the added value of automation, the business is still driven by people, and customers prefer the personal touch when it comes to sales and customer service. “Furthermore, there are too many situations that the current AI technology can’t act on. The airfreight industry is very delicate. Ensuring a smooth operation without flaws is far from reality. All parts of the logistic chain are depending on various key factors. The human factor is needed to come with key and creative solutions on the spot. For the time being AI will only play a role as a supporting tool. “As for the long run, the successful implementation of AI as a total solution provider depends on the total adaptation and co-operation of all parties within the logistics chain. “We started investing in AI technology since 2019 and aim to be a major player in this movement, therefore it has a very important role.”

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Belly-hold The majority of cargo, of course, goes in the bellies of passenger flights. What can cargo GSAs do to help their principals recover from the pandemic? How can they help to build back better? Aggunduz says: “It’s essential that GSAs take lead in this matter and steer passenger carriers. Providing them the necessary market intelligence allows carriers to adapt their products to the needs of the market. Carriers are depending on their cargo income more than ever. Therefore, it’s crucial to generate capacity on high demand routes, in order to increase their revenue. We do not only execute PAX freighters as charter operations anymore but implemented them in the seasonal schedules to the destinations in demand. This allows the carrier to make optimal use of their passenger fleet.” At the same time, Aggunduz is certain another key market development is in existence: Merger & Acquisition (M&A) of mom-and-pop GSAs over the next few years as consolidation takes place. He says: “Doubtless, the major GSAs will take advantage of the struggle SMEs (small & medium enterprises) endure. Merger & Acquisition had a huge role in the expansion of the current players in the market and this will continue. Carriers are more and more demanding and shifting their financial risks also more to GSAs. SMEs within our industry struggle to cope with these requirements. Carriers prefer to have partners with a strong financial background. Furthermore, they prefer to deal will one party for multiple regions. “In the long run it will also be more difficult for SMEs to cope with digitalisation as they do not have the resources to develop this.”

Fifty-four countries Living up to its name, Global GSA Group currently represents 62 airlines worldwide with approximately 350 employees based in 54 countries. This year they have plans to expand to another three countries with approximately 80 employees. Global GSA Group always has a need for qualified staff. Hiring is done locally when required. The growing portfolio of airline clients reflects the directions the

agency is travelling. Aggunduz says: “We have recently added some new airlines to our portfolio, but main developments are that we have expanded the regions of representation with our current airline portfolio. Depending on the airline and region, we have both country- and region-based representation contracts. “Global GSA Group was established in 1995 and started with the representation of two airlines. More than a quarter of a century later, we still have them in our portfolio as one of our biggest customers. Our vision towards partnerships is always to make it beneficial for both parties. This healthy approach is needed to build long-term cooperation.” The nightmare where a client takes its sales activity inhouse is not a great worry for Aggunduz. He says: “More than a decade ago, we experienced this in a specific region, but still have GSA contracts in other regions with the relevant carrier. Moreover, we experience it more the other way around as carriers are facing too many difficulties. Dealing with worldwide legal, compliance, tax, personnel issues and furthermore not having the market knowledge and network to make the operation worthwhile. “As we already have most global airlines in our portfolio, it is not the question of seeking new principals, but more the question, can we expand with the current airline portfolio? Despite this fact, we are always seeking but also have the advantage as a major GSA company that carriers approach us. “Our most important added values are extensive market knowledge, great freight forwarder network and relationship with key persons, fully dedication team with key account managers and tailor-made services according to the needs of our partner airlines. Every carrier is unique and therefore we adapt and execute our services accordingly.” Outside of the GSA business activity, there is an element of Global GSA Group’s development of which Aggunduz is very proud. He says: “We are proud that our organisation is successfully implementing sustainability and diversity strategies. A key factor we are proud of is that we have 43% women and 57% men ratio in our offices worldwide.”

“In the long run it will also be more difficult for SMEs to cope with digitalisation as they do not have the resources to develop this”

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VAN DER LAAKEN: ‘HUMAN FA WILL ALWAYS HAVE A PLACE Hubert van der Laaken, CEO of independent Dutch GSA Euro Cargo Aviation, points to his staff and personnel, the human factor, as the 25-year old operation’s “most valuable asset”. These people are set to help ensure van der Laaken and his team prosper well into the post-pandemic world. Going forward, what sort of future will there be for GSAs and GSSAs? How might they look in ten years time? He says: “GSSAs will,

for sure, continue to prove their added value for airlines and forwarders [into] the future. To survive it will be vital to offer a full range of custom-made services, from basic to Full Cargo Management.” While AI is now often in the thoughts of headline writers and those who gaze into crystal balls, there will always remain an important place for the ‘human factor’ in GSAs and GSSAs, he considers: “We consider the human factor as our most valuable asset. AI is already

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Merger & Acquisition

ACTOR’ integrated in our industry and has to be extended to be able to deal with growth and to be future-proof. “You must consider around 75% of the world’s airfreight shipments are under 1,000 kg, representing 20% to 25% of the total revenue. AI already is and will become more and more essential for this segment. For shipments over 1,000 kg the human factor will continue to have a vital role.”

While there are many global, multi-station GSSAs who have international networks which give them a foothold in many of the key airfreight markets, there are a great number of smaller, GSSAs. Does van der Laaken consider that these may continue to survive, remaining independent in the face of pressures to succumb to mergers and acquisition over the next few years? He says: “We believe that an independent and financially strong, medium-sized and flexible GSSA organisation, such as Euro Cargo Aviation, offering a regional coverage, will be able to focus on the cargo business and deliver the very best quality of service to their customers. “Consolidated groups focus more and more on cost reduction and creating additional value for their shareholders instead of focussing on the customers. Their ultimate goal is to find the next private equity company for a takeover and maximise their profit.” Euro Cargo Aviation Group currently represents 23 airlines. Last year, despite the pandemic, the group added eight new airlines with three new contracts with existing carriers. Van der Laaken says: “We actively seek new principals. We are also approached by actual and new customers that want to work with us because they are unhappy with the service they get from their existing GSSA. It could also be that they are a new airline or existing airline starting new routes. This is, of course, as long as they are not in conflict with any of our loyal existing customers.” He is excited: “We are actually in the final stages of a few very exciting new airline customers and expect the final decision for this during the coming weeks.” The longest airline client represented by Euro Cargo Aviation Group has been in its stable for more than two decades, almost since the launch of the company. It has stations in 20 countries, with 25 offices in Europe, Africa, USA, China and Hong Kong. The company has a staff of around 178 people. It is a matter of pride for Van der Laaken that none of his airline clients have ever taken their business in-house.

“We are actually in the final stages of a few very exciting new airline customers and expect the final decision for this during the coming weeks”

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DIGITALISATION WILL TRANSFORM THE BUSINESS In a decade’s time, GSAs and GSSAs will not exist as we know them now. That is the prediction of Ingo Zimmer, CEO of Frankfurt-based ATC Aviation Services. Zimmer says: “They will probably not be as we know them today. Digitalisation will transform the business. ATC Aviation is already about to launch a digital GSSA platform. We also see the trend of concentration in our industry. The bigger GSSA groups will further expand their market share. Smaller companies cannot keep up with the pace. It’s going to be like the ground-handling business; airlines will award contracts for regions rather than for countries. “The traditional role of the GSSA has changed already. What we are doing and will do is much more than the traditional sales of airlines capacity. New business segments are for example the charter and solution business. We even started to represent onboard courier companies to round up our portfolio. The customers are the same. It’s a one stop shop. “As a neutral GSSA, under our solutions umbrella we started selling the surplus capacity from agent charters, integrators and e-Commerce companies’ capacities.”

Pandemic recovery Now the pandemic is receding, the whole aviation and logistics supply chain is hoping to build back better? How can a GSSA like ATC Aviation help? Zimmer notes: “To cater for the capacity demand in times of drastically reduced belly capacities, we helped our airline customers to sell passenger to freighter charters. Together we established new routes. It is interesting how many former pure passenger aircraft operators are now going to expand their cargo business and purchase freighters. We work with them on the right Origin and Destination (O&D) and their business plans.” The agency represents some 70 airlines, employing around 220 staff from 34 nations, speaking 32 different languages, in 33 countries from 54 offices. ATC Aviation is hiring at the moment. Zimmer says: “We have got a couple of new contracts and yes, we have got to hire talented staff for these. “We have never been as busy as we are right now with tenders. A lot of airlines are outsourcing or looking for a new partner. It is interesting that some of the last contract wins have been regional or even global contracts. For ATC Aviation to have 32 own entities, it’s an advantage to have the global presence.

“Some regional contracts have recently been awarded by Kuwait Airways and Sichuan Airlines to our organisation, but we still get many contracts covering one or two countries. “With many of our global airline partnerships we can look back on long-lasting, successful collaborations with some of them 20 years and longer.” QR Cargo move The taking back of GSSA activities in-house must be a headache for any GSSA. ACW recently reported that Qatar Airways Cargo recently did just that in Spain. Is ATC Aviation worried? Zimmer says: “This can happen to a GSSA, but it happens not that often and the good thing is we win more often than we lose. We have done a fantastic job for QR in Spain and meanwhile QR is the biggest capacity provider there. We have been in discussions with QR management for quite a while. If you have a few thousand tonnes of airfreight every month from a market like Spain insourcing could be an option. We continue being the partner of QR in Austria and Switzerland. “Most of the contracts we win whilst participating in tendering but of course we are scanning the market for new business opportunities, especially if we feel we have the right solution for a customer. “We are the leading GSSA when it comes to digitalisation. We implemented e-booking platforms, data lakes, Windows 365 cloud solutions, Power BI, and yes, we do work with bots readying and transferring information from emails, paper documents and other systems into booking requests, bookings, or the full data capture. “We have mentioned a few of our new services and of course we still offer in full, or modules services ranging from field and marked studies, research and consultancy, sales, customer service activities, space control, to cargo load and flight planning and operational support. CASS billing procedures as well as reporting, supervisory of online flights and trucks complete our service portfolio. All these capabilities form an integral part of our partner’s success and set us apart from other GSSAs.”

Right way The good news for ATC Aviation is that in 2021 its tonnages have been in the region of 300,000 tonnes. This puts the agency back to pre-COVID 19 levels, with tonnages 26% above 2020’s total. Zimmer concludes: “We are on the right way forward!”

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HAE GROUP: MIDDLE EAST REM For Peter Kerins, vice president Middle East and Africa, HAE Group, the location of Gulf Co-operation Council (GCC) countries over the years has made them obvious international aviation hubs positioned between the major economies of the East and the West and some other surprising connections. He says: “Given the central location of the Middle East hubs, particularly the UAE, we easily connect between Europe, Asia and Africa. It

is not just East and West, it’s South also. It is also multimodal, Air to Air, Sea-Air, Road-Air and Road-Sea. There is significant regional fulfilment also. As a consequence, it has been and will continue to be a key transit point for our group.” The UK-based HAE Group have been heavily vested in the Middle East region for many years. “It gives us key outlets into the region, but also Africa which is one

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REMAINS A KEY TRANSIT POINT of our fastest growing locations. From the Middle East HQ, we control all activity for HAE in the Middle East and Africa but also provide essential support on our global solution services.” The organisation’s headquarters the Middle East and Africa is based in Dubai, UAE. “We support and manage both our Middle East and African offices through there. In both Middle East and African markets, it is essential to find locations where there is an ease of access and friendly business environment. We are working on a number of new initiatives including Egypt and further expansion in Africa.” HAE is always looking to support value added carriers where it can make a difference. “In addition,’ he says, “we are evolving our products so that they continue to remain relevant in the new market place where a GSSA+ is required. We believe this is what makes the HAE Group unique. For example the latest version of our self built ‘QMS’ web portal will be rolled out to our forwarding customers shortly for them to get an even quicker quoting service than before.”

plications on crossing borders, we do see this changing in years to come. With rail projects in Saudi Arabia, the UAE and so on, there is a sense of optimism that this may become a vital outlet for cargo in the years to come.”

Uncommon market Even though the GCC has trade agreements in place, it is still not one common market. There are various requirements based on each individual country. This makes it quite unique. He says: “With our level of experience in the region, we know the capabilities and possibilities of shipping within the region, which allows us to confidently offer premium services to our customers. Also with the growth of the Middle East carriers and their networks there is fierce competition. “We are always surprised, but our long standing working relationships in this region continues to find entrepreneurial spirit in the GCC/African regions. Genuine hard working people who want to do

Pandemic impacts “We think COVID-19 will have a long lasting effect globally, and the Middle East markets are not immune from these effects. Capacity on carriers is believed to be back and between 40-60 %, based on the individual markets, from pre-COVID-19 levels. In addition volumes are lower through the region since COVID-19 struck. Capacity Recovery is is hard to estimate, we have learned that flexibility and creativity is key. “We have decided to fast track our expansion of the digital systems we have at our disposal so that our customers and airline partners can react quicker to their opportunities.”

Oil change The region’s 20th century dependence on oil and gas is going. Has HAE Group noticed this in the cargo it is involved with moving to and from the region? “The oil and gas business has been consistent and an integral part of the cargo business in the region for many years. We don’t see major changes, but with the introduction of technology on all sectors of business, we have adapted our business in line with the demands from our customers. Speed of movement, particularly with downed rigs, machinery and so on is vital, but speed of information is equally important to our clients. This is what we have devised with our own bespoke IT that meets those demands.” Road freight has always been an essential part of the regional infrastructure. Over the past 18 months, this has been hampered by border closures, differing procedures for various countries. He says: “In order to access some GCC countries from the UAE, you would need to transit Saudi Arabia, so when their border closed it not only cut off road networks to Saudi, but beyond to Bahrain, Qatar, Kuwait and others. This has been a testing time for road freight. Whilst rail isn’t developed completely in this region, due to the com-

“We think COVID19 will have a long lasting effect globally, and the Middle East markets are not immune from these effects”

business “We always remain open to new ideas. The GCC for us is still an aggressively developing market place. What we have brought to both our airline clients and customers by way of innovation is always welcomed. Whilst some markets are still a little traditional such as the Sea/Air market, there is still plenty of scope for development which will enhance the local markets.” The region’s market is a little different when it comes to workforce. “Due to labour sponsorship requirement and visa rules, we have been lucky enough to have a very minimal turnover in staff. We provide an inclusive working environment and our staff welcome this. The region will have the same, although the last 18 months or so have seen some turnover within the region. COVID-19 did have a major impact but there is more optimism now appearing in the market with jobs returning,” says Kerins. HAE will continue to invest in the region: the availability of highly trained staff, the working environment and the location allow HAE Group to ensure that its ME/GCC office remains the key link for its global offices in the GCC and African regions. “We do feel the region and industry moving more and more to digitalisation which we welcome,” concludes Kerins.

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NEXT MONTH’S SUPPLEMENT WORLD AIRLINES World Airlines have undergone a shock like none other since 1945 in the last two years. Legacy passenger carriers have saw traffic numbers plummet instantly and alarmingly, immediately grounding thousands of aircraft that robbed the airfreight supply chain of invaluable belly-hold cargo space. However for freight airlines, the opposite has been the case. Demands for PPE and other sanitary equipment quickly replaced the commodity cargo lost to the fall in consumer and business demand and confidence. This means that freight gained an importance it had never en-

joyed before. Suddenly, global airlines flying around their networks were bringing health and safety to communities to help them fight the pandemic. Airline managements were quick to discover that freight, once a Cinderella of the aviation business, was now the only serious source of revenue. The black ink of airfreight operations diluted the red ink from the passenger side. World Airlines are now looking forward to an easing of the pandemic restrictions in many aviation markets that should herald new opportunities for growing networks and creating demand for air-

freight services. The major concern for international belly-hold capacity providers is how quickly mass passenger traffic will return. Cargo follows cabin traffic so airfreight growth may yet depend on how confident and safe passengers will be in taking flights across the planet. Contact: James Graham, Supplement Editor james.graham@azurainternational.com

GENERAL SALES AGENTS

GOODBYE TO THE MIDDLEMAN, HELLO TO THE PROFESSIONAL “Just ten years ago, who would have heard of bots and AI but these are very much the present”

If there is one comment you can make about the GSA business guaranteed to rile Steve Dawkins, CEO of Derby, UK-based Air Logistics Group, just ask him what it is like to be a middleman between a forwarder and an airline client. Down the telephone line you can hear him almost splutter his disdain at such a suggestion. He says: “Journalists always say we are middlemen. It is a lazy and out-dated description. We have changed into professionals, giving a service to our clients that go well beyond simply selling space.” Dawkins, who has spent his entire four-decade career in freight, 28 years of them at Air Logistics Group, is passionate that his sector lose the image of just taking a percentage on cargo booked and instead be represented as freight professionals whose repertoire of skills and knowledge lend added-value to the air supply chain. That is why the agency promotes itself in its promotional material as Air Logistics Group, the world’s leading cargo GSSA. Air Logistics provides a variety of innovative outsource solutions to airlines, enabling them to achieve a cost-effective presence in the airfreight market. With a comprehensive network of 88 offices in 48 countries across six continents, Air Logistics has the ability to provide customised cargo solutions across the globe, including expert sales, creative marketing, efficient operations, exceptional customer service and dedicated accounting all supported by advanced business intelligence tools.

Platforms When Dawkins was in at the start of Air Logistics, messages were sent by telex. These were then superseded by the telephone, which in turn were replaced by emails. Now, they in turn are likely to be replaced by business platforms. Dawkins, who embraces change happily, considers that the role of the GSSA is to facilitate sales for the principals but secure the most satisfactory deal for the forwarder. Airlines are themselves changing their perception of the role of the GSSAs. Both sides see the importance of data to the air supply chain. He observes that business is being undertaken differently now to how it might have been just a decade ago. He says: “Just ten years ago, who would have heard of bots and AI but these are very much the present.” That is why the GSSA role is less about selling and more about data. “It is important now to get the data from the forwarder’s email as quickly as possible,” says Dawkins.

Exciting times As Bill Clinton never said, it’s all about digitalisation, stupid. Already Air Logistics have digitalised sub-250 kg shipments. This is one of the future technological developments that is exciting Dawkins. That is why the agency has invested heavily in its IT eco-system. It is also one of the ways that the agency can help its airline clients to recover from the pandemic.

A GSSA can help belly-hold capacity client airlines build back better using this very professionalism to help profitably fill the aircraft bellies. According to Dawkins, Air Logistics is always seeking to achieve the highest yield for the cargo they secure. This is the best way to help its clients to build back better. “This is an exciting time for the industry,” he considers. Airlines are no longer willing just to hand over the selling of their space to a third-party GSSA and walk away from oversight of the agency’s work. This stems from the fact that the very data that the platforms are providing GSSAs is now available to the carrier. In cyber-space, no-one is in the dark. Another development has been the airlines’ reluctance to hand over all the selling function to an agent. Instead, depending on the precise inclination and business model of the airline, a GSSA may be asked to provide just a few functions or many or even all selling functions. “It’s no longer all or nothing for an airline,” he says. Asked whether he considers there will be many consolidations by GSAs in the way there has been with forwarders, airlines and GHAs, Dawkins points to a likely development. He sees less likelihood of consolidation between smaller operators and more of these agents joining GSA networks.

80:20 rule Air Logistics has managed the pandemic without losing any significant staff members. This pleases Dawkins and celebrates the positivity the company has in retaining staff. There are 365 employees – one for every day of the year, laughs Dawkins – across the globe. The company is actively looking to recruit more logistics staff but it is a difficult time to find suitable staff. Dawkins and his management teams look to keep their units together as it remains “tough to get good people”. The loyalty and concern that Air Logistics has towards its staff is reflected in the loyalty and concern that it has for its airline clients. There are currently 176 airlines on the agency’s book. In a curious manner, this total reflects the famous business maxim of the ‘80:20 rule’. He says: “The top 25% of our portfolio of clients represents 80% of our business.” One airline has remained with Air Logistics for 27 years almost since the company started, a relationship longer than many modern marriages. There has been another development in the industry that Dawkins and Air Logistics must navigate; the modern tendering process. While once it might have been a simple process, the tender today might require ten senior managers from an airline to scrutinise it for a whole range of compliance measures. It is a box ticking exercise now, with issues such as compliance, health and green aspects being raised in a way they were not once.

SUPPLEMENT

IT IS ABOUT ADAPTABILITY IN ALL THINGS Aviacargo president Michael Cox shares with ACW his thoughts on why the future is bright Customer-centricity has been king for the last two years. It’s an old term and much overused but it’s never been more needed than over the course of the global pandemic. Being able to reassure the customer that their freight is going to move has become vitally important. There were so many cancellations, airlines were forced to do things at short notice so we had to be able to undertake all manner of new and different tasks and communication was at the heart of it. Before Christmas 2021 you were hearing horror stories, be they in the US or the UK, about lack of staff at airports, lack of forklift trucks, no trucks and massively increased dwell times in some locations. It really didn’t bode well if you were a GSSA working on behalf of an airline. And that’s perhaps where size matters, because when your organisation is small and nimble you can be truly flexible in an instant. In December my team came to me and said customers are just complaining and complaining. They were complaining to us because of slow delivery due to lack of warehouse staff in the handling agents, and the breakdown was taking longer than usual but as soon as we picked up the phone to them. It was the human touch and the speedy intervention that made the difference. The complaints stopped and the team was praised for its proactive approach.

Below the radar As a company Aviacargo likes to stay below the radar. And what has really, really proven strong in the last two years is the value of great people skills. For me there are too many airlines where you put the booking in the system, you file it in the system and the whole process is automated. On the surface it looks great and seems very efficient but cargo doesn’t talk and that’s where the issues often start. It’s about adaptability in all things. If you swim against the tide constantly you are going to drown. We have had to adapt, change and reinvent ourselves like any business and if you don’t Carpe Diem, (seize the day) you are going to get left behind. You need to go with the rhythm of the city where you are to make things work; don’t rely on what comes to you. One of the things we have done recently is added to our team in the UK to support our operations from Bournemouth Airport. In the US we have also added team members to cope with demand for our client airlines services. One of the hardest things was finding the right people: people with experience and the will to work because there were so many incentives for people not to work on both sides of the Atlantic. And then we have this situation in the US where people are

just leaving jobs in droves. There are certainly differences between being a GSSA in the USA and a GSSA in the UK – I think one of the things people don’t understand is that in the UK a GSA’s market is surrounded by five or six different cities but in the United States you are surrounded by 15 or 20 major cities. That in turn means one of the things that is different is the number of markets where you have to negotiate the trucking we have so many markets in the US where we are co-ordinating the trucks. If a passenger has a problem he goes to a counter; if the freight gets delayed because of trucking shortages we have to go and find out what’s going on. And our play to strength is our ability to do just that. Solutions creativity is another requirement when you are a GSSA. For example Kenya Airways had been online to New York and of course it went off line at the start of the pandemic so then we went straight to developing an offline product. Kenya Airways now has an increased schedule and are operating a minimum of three times a week to New York, JFK and Air Mauritius has returned with the opening up of Mauritius, Madagascar and Reunion which in turn means we can now sell a lot of the African niche markets. Some of the African destinations such as Bamako have not returned but all the main African destinations are now back. And out of here we are strong to Johannesburg because of the demise of South African Airways. You give it to us on a Sunday and we can have it in Johannesburg by Wednesday. Then there was freighter operation ex-Bournemouth where we were four flights a week before Christmas; currently we are on one flight a week and that’s now the same level as we were last year. In fact in January of last year we operated one flight and this year we operated five. Year on year it continues well. We created a new solution and the beauty of our flight terminating in Polar Park is that we are not on-airport. You can get your freight within the hour; you are not sitting in the horseshoe at Heathrow for eight, nine, ten hours. I think of the opportunities of being the size that we are is that we are lean and we don’t have a hierarchy or pyramid and therefore we can react and make decisions very quickly. One of the other things that is very clear with a GSSA like ourselves is the complete transparency, with our airline customers, they like that and we don’t hide behind multiple brands. I think the future is bright for niche market and for independent GSSAs there are plenty of opportunities in the coming years. But I do think we all need to recognise we are going to be living with the pandemic for some time to come and realistically it will be 2023 and even 2024 before the industry gets back to some kind of normal.

Editor:

James Graham

Deputy Editor:

Yasmin Turner

Director of Operations:

Kim Smith

International Sales Director:

Rosa Bellanca

Finance Manager:

Rachel Burns

Video Director:

Michael Sales

Design & Production Manager: Alex Brown Website Consultant:

Tim Brocklehurst

Directors: Norman Bamford • William Carr • Dawn Jolley

The views and opinions expressed in this publication are not necessarily those of the publishers. Whilst every care is taken, the publishers cannot be held legally responsible for any errors in articles or advertisements. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by electronic, mechanical, photographic or other means without the prior consent of the publishers. USA: The publishers shall not be liable for losses, claims, damages or expenses arising out of or attributed to the contents of Air Cargo Week, insofar as they are based on information, presentations, reports or data that have been publicly I N T E R N AT I O N A L disseminated, furnished or otherwise communicated to Air Cargo Week.

AZURA

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