GSSAs seamless partners in business
Local knowledge, global network and quality of service set general sales and service agents (GSSAs) apart and make them integral to the success of airlines who outsource their cargo operation to the experts.
For any business to operate in the current circumstances where there is extreme pressure to control costs and optimize returns, organizations are ramping up their core competencies offering unique value propositions. Growth in air cargo industry is in direct relation to the growth taking place in the global trade and commerce. As part of optimizing cost and leveraging the core competencies of specialists in the air cargo sales and services operations, airlines have been outsourcing their cargo operations to difference expert organizations in various markets and regions. Over the last few years the role and function of a general sales agent (GSA) for an airline for their cargo operations have evolved and they have added a new dimension to their function. It is that of service. Therefore, today they are GSSAs or general sales and service agents. Today the promise from a GSSA is expertise, infrastructure and financial support to offer a full range of cargo services. Airlines can benefit from a tailor made package to suit specific requirements in order to increase the potential revenue, reduce costs and improve the core competencies of airlines in markets around the world.
Today’s GSSAs come with a unique culture supported by entrepreneurial aspirations and they have the capacity to bring in equity investment to scale up operations around the world.
“The last ten years have been very exciting for our business, even though the 2008 financial crisis substantially reduced operations and had an impact on every business including air cargo,” said Stephen Dawkins, Chief Operating Officer, Air Logistics Group. The high-flying times of 2010 have lead to a disappointing back half of 2011, but for Dawkins, who founded Air Logistics in 1994 a slowdown in the market is not a stumbling block but a challenge and opportunity to innovate product and services.
Air Logistics Group works with the world’s airlines, selling hold space for cargo on their behalf, matching flights with those buying and selling goods around the world and managing cargo. The company currently has offices in 49 countries, with a yearly turnover of around $550 million.
Air Logistics endeavours to maintain the highest standard of customer service with strong brand recognition, while also being a transparent and reliable partner in the specialist field of air cargo sales worldwide. “We place great emphasis on local knowledge and understanding the local market. Air Logistics is fortunate to have some of the most experienced airfreight professionals managing its operations around the world,” Dawkins added. As globalisation and outsourcing took hold, there was more and more demand for the company’s services and it grew rapidly.
Paris-headquartered GSSA, European Cargo Service (ECS) has been expanding its global business considerably over the last few years. ECS had close to a billion dollar revenue for the year 2014 and the company sold 700,000 tonnes of airfreight to its mandate airlines such as Brussels Airlines Cargo, ANA Cargo, China Southern Cargo, Turkish Airlines Cargo and a considerable number of other clients. In comparison, ECS reported revenues of $920 million in 2013 and 585,000 tons of cargo respectively transported by partner airlines acquired by ECS group members like the Italian ADP, Germany’s Globe Air Cargo or the French GSA’s four Scandinavian subsidiaries Nordic, to pick only a few out of its member list.
Last year AirAsia India appointed Global Air Cargo India, part ECS Group, to manage its cargo sales. AirAsia India expects to earn nearly 10 per cent of revenue from cargo operations. “We left it to experts to handle cargo while we will concentrate on the passenger side, which we know better,” said Mittu Chandilya, CEO, AirAsia India, late last year while appointing ECS as its GSSA in India. “Cargo is critical for an airline though not been given due attention,” Chandilya added. “We expect India to contribute nearly 10 per cent of revenue in the next two years. The revenue is very small now,” said Bertrand Schmoll, Chairman and CEO of ECS Group, during his visit to India last year. ECS Group has been consolidating its position as the leader in the GSSA space with key acquisitions around the world. Last year it acquired Heavyweight Freight (HWF Group), a highly successful GSSA with offices throughout the Nordic region. Schmoll said it was the excellence of HWF Group’s management that had convinced him to make this acquisition. “ECS Group’s strategy is to strengthen its expertise and airline relationships by working with the best people in this business,” he added. “Putting flags on a map or simply gaining market share is not a satisfactory nor a sufficient goal.”
Transatlantic Airways is a GSSA specializing in the lucrative high-growth markets between the Americas and Russia, the Commonwealth of Independent States, Central Asia, Eastern Europe and the Baltic States. We provide the full range of air cargo sales, services, management and customized solutions which result in quantifiable results for our clients while providing unbeatable cargo services for the freight forwarder community.
The whole business angle of outsourcing cargo sales and services through GSAs is relatively new. According to Dawkins, organizations like his really started appearing in the late 1970s as a way for carriers, who had been accustomed to providing all the cargo-related activities themselves, to cut out costs. Business for GSAs picked up in the mid-’80s and ’90s because, as Dawkins says, officials were looking for help with cargo bookings, financial support and a host of other services.
Dawkins says companies like his simply have to adapt to new competition. Online booking portals that directly connect shippers and carriers present a new wrinkle in his business model, but one thing these systems can’t offer is the added bits of value he says GSAs bring to the table. He said today airfreight is a “commodity” and the value determined by the “supply and demand”.
There are also serious efforts by leadings professionals in the industry to improve the profile of GSSAs. Normally GSSAs work so closely with airlines that they are almost part of the airline they represent. Most often not having an identity of their own. It may take a couple of years to build things up, but the results are better in the long term. In fact a few years ago, many general sales agents started calling themselves GSSAs, with the emphasis on the service aspect of the operation.
Dawkins says the focus of Air Logistics is not just on sales alone. It is the global network and quality of service that matter most for GSSAs. Others include, for instance, capacity control, market reports, overlooking or supervising the warehouse handling company and ramp supervision during turnaround or after sales to freight forwarders, including advising them about new services.