Adaptable, flexible, valuable: Changing roles of GSSAs in digital age

Traditional roles of GSSAs and their relationship with airlines are challenged by online air cargo booking platforms. However, there are opportunities for those prepared to adapt.

“When they started their aviation journey, they were working with us. We have been helping them from the very first day to implement the very first flight. They naturally came back to us because the first experience together was fruitful and we never ended up in a negative tone.”

These are the words of Adrien Thominet, executive chairman of one of the prominent global General Sales and Service Agents (GSSAs) ECS Group, as he spoke to The STAT Trade Times after winning back the GSSA contract from the three-year-old French cargo airline CMA CGM Air Cargo which ended its partnership with Air France KLM recently.

These comments speak a lot about the GSSAs, the nature of their business, how closely they work with airlines and the importance of maintaining good relationships.

As a crucial stakeholder in the air cargo business, GSSAs are often positioned between the airlines they represent and freight forwarders with whom they do business.

Thominet also noted that the relationship between airlines and GSSAs has significantly evolved, reflecting a shift towards highly customised and flexible business models that cater to airlines’ specific operational and regional needs.

He thinks ECS Group's partnership with CMA CGM is a prime example of this evolution.

“In this collaboration, ECS Group has crafted a unique business model where we operate as a total GSA in some regions, while in others, our teams work in tandem with CMA CGM's teams. This dual approach allows for a seamless integration of services, ensuring that operational efficiencies are maximised and that each region's specific needs and challenges are effectively addressed,” he said.

“Rather than being threatened, ECS Group views digital transformation as an opportunity, ensuring that we remain indispensable partners to airlines by providing value that far exceeds the capabilities of any automated system.”
Adrien Thominet, ECS Group

Indeed, GSSAs throughout the world are reporting relationships changing from financial dealings to trusted alliances and from traditional collaborations towards more commitment and flexibility.

Praveen Narayanan, vice president - business development, Group Concorde, reported that airlines are moving away from transactional relationships with GSSAs towards long-term partnerships based on trust, transparency, and mutual benefit.

“This shift allows both parties to invest in building sustainable business relationships and driving continuous improvement and innovation in their operations,” he said.

“Airlines and GSSAs are increasingly aligning their business objectives and strategies to achieve mutual growth and success. This includes closer collaboration in sales and marketing efforts, route development, capacity planning, and service innovation. Airlines are seeking GSSAs that can provide integrated and end-to-end solutions across the entire air cargo supply chain. GSSAs are responding by expanding their service offerings to include cargo handling, warehousing, trucking, and value-added services, creating a seamless experience for airline clients and their customers,” he added.

Joe Lawrence, president, Airline Services International, noted that airlines are putting a lot more pressure on their GSSA partners than they used to.

“They are looking for more commitment than before. In some markets that works, in others, it won’t. Airlines are looking for partners that not only provide the services they need, but also go over and above, they are looking for reliability, integrity, and commitment,” he said.

Regarding GSSAs’ communication with partner airlines and how it has changed in the recent past, he pointed out the single most important factor affecting it: performance.

As he puts it, “We have been in the business for 35 years and it always comes down to performance, that hasn’t changed. It is also about demonstrating what we are doing differently to increase market share.”

“Accepting booking is only a small part of our activity. Market studies, customer services, load planning, coordination of trucks, handling and ULDs and after-sales services make the product.”
Ingo Zimmer, ATC Aviation

Julia Knecht‑Ostwaldt, chief operating officer for Europe, Strike Aviation Group also reported that airlines require more and more services from its GSSA providers.

“Carriers are requesting the GSSAs to step into the human factor for assisting the digital AI systems environment at little or no commission levels,” she said.

“The world of air cargo is constantly changing, but the desire by the carrier to outsource previously fixed overheads to commission-based sales and services remains extremely strong. The advent of technology may assist this process but is only a tool, not a service,” she added.

Strike is in the middle of rolling out the participation of the TRICARGO.aero rate window which is offering a free-to-use rate-showing website for the freight community.

“Carriers would like to eliminate the GSSA component using the different platform providers on the market but it already gives hurdles that they have to open up their own system gateways and therefore weaken the security standards. Also, they are asking for customer support for shipments which have been placed via those platforms but no person is behind to help them so GSSAs are starting to ask the overall commission for the services they are providing,” she added.

Ingo Zimmer, chief executive officer, ATC Aviation points out that airlines are more than customers and are partners having the same goals.

“Budget and sales meetings are taking place regularly and because of the digital communication tools, exchange of ideas and virtual meetings have increased a lot,” he said.

Having a GSSA working along also brings several advantages to airlines. For instance, Zimmer noted that working with a GSSA keeps the airline's fixed costs low. “Commission is only paid for the generated revenue; it's a flexible cost,” he added.

ATC Aviation recently signed a new contract for Europe with the Korean carrier T’ Way Air, starting in June with the service to Zagreb followed by Rome, Paris, Barcelona and Frankfurt this year.

“We as a GSSA are established for 30+ years covering the whole area and can take over the sales and marketing part for the cargo products as from tomorrow. We have the offices, experienced staff and trucking and handling partnerships already in place. We have a European control tower at the HQ coordinating the space and yield management,” he said.

ATC handles many regional contracts for airlines including Sichuan Airlines, Air Astana and Kuwait Airways. However, it is essential to have the know-how in the local markets to offer such solutions.

“To offer the airlines the trucking services wherever needed to connect the offline with the online station, it is imperative to have the right talents on board. In ATC there is a saying “People are our biggest assets” We have dedicated teams for our airline customers as well as single points of contact and sometimes even separate offices,” he added.

“To prepare for the future, GSSAs could invest in technology to streamline booking, additional services such as cargo tracking and documentation, and strengthening relationships with airlines and customers.”
Praveen Narayanan, Group Concorde

One of the important roles of GSSAs is to sell the capacity offered by airlines and help them achieve maximum revenue out of those. However, with the rise of digitalisation and the emergence of online air cargo booking platforms, many doubt if GSSAs will exist in the future at all.

Narayanan pointed out that the notion of booking platforms replacing GSSAs raises a valid point about the potential impact of online booking marketplaces on the traditional role of GSSAs in the air cargo industry.

In fact, online platforms have been disrupting various industries by providing more efficient and convenient ways for customers to access services.

However, he also noted that GSSAs offer more than just booking services.

“They often provide specialised knowledge, personalised support, and comprehensive logistics solutions that may not be easily replicable by online platforms,” he said.

Knecht‑Ostwaldt agrees that in the evolving air cargo industry, digital platforms are transforming processes; however, points out that the human touch remains crucial.

Lawrence also agrees that booking sites do have a part to play in the industry, but noted that they will not take away from the full service provided by a GSSA to an airline.

“Airlines are not just looking to us only for booking, they want the whole nine yards and they like dealing with people, whether it’s a phone call or an email,” he said.

In Zimmer’s opinion, the digital marketplace is only an additional sales channel complimentary to the sales and marketing offered by the GSSAs.

“Accepting a booking is only a small part of our activity. Market studies, customer services, load planning, coordination of trucks, handling and ULDs and after-sales services make the product,” as he puts it.

“The world of air cargo is constantly changing, but the desire by the carrier to outsource previously fixed overheads to commission-based sales and services remains extremely strong.”
Julia Knecht‑Ostwaldt, Strike Aviation Group

Meanwhile, Thominet strongly disagreed with the notion that online booking platforms could replace GSSAs.

“These platforms, while useful for straightforward booking tasks, handle only a fraction of the comprehensive services provided by a full-service GSSA,” as he puts it.

He pointed out that the GSSA role extends far beyond mere sales and bookings.

“It involves intricate operational tasks such as freight supervision, flight preparation, manual processing of bookings, and crucially, the management of financial transactions—areas where automated systems cannot fully replicate the nuanced decision-making and expertise of human operators,” he said.

“We have been in the business for 35 years and it always comes down to performance, that hasn’t changed. It is also about demonstrating what we are doing differently to increase market share.”
Joe Lawrence, Airline Services International

But what should the traditional GSSAs be doing with platforms and marketplaces altering their role in the air cargo business?

For instance, Stephen Dawkins, chief executive officer, Air Logistics Group, pointed out the influence of digital platforms as a motivation for his business.

“Because,” as he puts it, “we continue to strive to evolve and change, and have done so over the last 30 years.”

“Our dynamic industry is once again undertaking a significant positive change in digitisation, but we must not forget that there is still a need for a significant degree of manual intervention after an online booking has been secured it requires skilled and experienced employees to manage the processes and maximise airline revenue for each departing flight – revenue optimisation is the key,” he added.

According to him, the industry has six core pillars - complexity, security, compliance, sustainability, knowledge, and risk. And GSSAs that provide a service that covers all these elements, which cannot currently be transacted with technology alone, a mix of both elements continues to drive our dynamic industry, as he puts it.

“Customer relationships are still an essential part of the cargo business. Forwarders need to feel confident that their cargo is being treated with the required care and attention. For ‘standard’ general cargo, new booking technology can provide a simple, efficient solution for both the forwarder and the airline, however for specialist cargo – pharma, DGR, outsized – there will always be the requirement for additional support,” he said.

According to Knecht‑Ostwaldt, “GSSAs must strike a balance between automation and maintaining strong relationships to thrive in this changing landscape.”

Narayanan also opined that adapting to changing market dynamics is crucial for any business to thrive. According to him, to prepare for a future where online booking marketplaces could become dominant, the GSSAs should focus on enhancing their value proposition.

“This could involve investing in technology to streamline booking processes, providing additional services such as cargo tracking and documentation support, and strengthening relationships with airlines and customers. Furthermore, GSSAs can differentiate themselves by offering tailored solutions for specific industries or regions, leveraging their expertise and networks to provide added value. As for preparation, it might involve ongoing assessment of market trends, investing in technology and training to stay competitive, and continuously refining the service offerings to meet evolving customer needs. Building strong partnerships with airlines and other stakeholders can also be instrumental in maintaining relevance in a changing landscape,” he added.

“There is still a need for manual intervention after an online booking has been secured. It requires skilled and experienced employees to manage the processes and maximise airline revenue for each departing flight.”
Stephen Dawkins, Air Logistics Group

Meanwhile, Thominet gave an example of how ECS Group does it as he believes that the value they provide goes much deeper than what any automated platform can offer.

“Our suite of abilities demonstrates the breadth and depth of services we manage, which include not just handling cargo but also optimising logistics, managing revenue, and ensuring that every aspect of cargo transportation is conducted seamlessly. Each of these abilities is supported by real teams with real expertise, ensuring personalised service and attention to detail that automated systems simply cannot match,” he said.

ECS Group has been investing in technology and partnerships, such as those with CargoAi and Rotate, to enhance their digital capabilities.

“However,” as Thominet points out, “These technologies are used to augment our human expertise, not replace it. We leverage digital tools to enhance efficiency and decision-making, but the core of our service remains deeply rooted in the professional acumen and personalised engagement of our teams. Thus, rather than being threatened by online booking platforms, ECS Group views digital transformation as an opportunity to further enhance our service offerings, ensuring that we remain indispensable partners to airlines by providing value that far exceeds the capabilities of any automated system.”

While online booking marketplaces pose a challenge to traditional GSSAs, there are opportunities for those willing to innovate and adapt. It's a matter of leveraging strengths, embracing change, and delivering value in ways that resonate with customers in the digital age.

This was originally published in the May 2024 issue of The STAT Trade Times.