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GSSAs share winning form to achieving cargo success

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GSSAs share winning form to achieving cargo success

March 4, 2022 by PLA Editor

“To each his own” an old saying goes, and this rings true for every business model across the myriad of airlines and aircraft operators across the globe. For GSSAs, the need to customize and be flexible with their clientele’s needs come along with the ever-changing rules and regulations that could have an impact on the flow of cargo and the continuity of supply chains. If you want to know the overview of the air cargo in a specific territory, you can ask a GSSA and they will tell you.

Constantly evolving
Alvin Tam, commercial vice president for TAM Wing Kun Holdings (TAM) believes the role of GSAs will constantly evolve and become more critical given the ever-changing needs of the cargo industry. The Hong Kong-based group, established in 1977, has an established network of offices with key presence in China, Philippines, Malaysia, North America and Chile. Most recently, it partnered with Saudi Cargo to represent the airline in the mainland.

“Today, only filling capacity is not enough. Our role has expanded to contributing in various areas, including providing better service levels, optimizing the airlines’ network, market intelligence, efficient ground handling, seamless and related operations and, most importantly, reducing operating costs while focusing on sales and profitability to maximize ROI,” Tam added.

Adrian Thominet, CEO, ECS Group

Rethinking its business model to address these issues, leading GSA, ECS Group, last year introduced an ‘augmented’ concept built on four pillars: commercial, new abilities, technology, and sustainability. Earlier in February the company launched a new set of à-la-carte products, accessible to all, with or without an existing GSA contract. Our abilities are a prime example of our ability to respond to these new paradigms,” Adrian Thominet, chief of ECS Group. “They are ten unique products that have been specifically designed in-house to meet the needs of our customers, whether they are regular or occasional needs,” he noted.

Digitalisation and sustainability
As keen observers of the aviation and transport industry, successful cargo agents are sharing the same vision with their partner airlines, particularly when it comes to digitalisation and sustainability. Thominet, chief of ECS Group, said awareness and adopting any new technology have been the biggest challenge amongst various stakeholders.

“With changing times, it becomes important for stakeholders to invest in adopting and upgrading technologies to make them smarter and efficient. There is also a growing interest in the ability to innovate, to think of new services and solutions to respond to paradigm shifts that are sometimes sudden but with a strong touch of sustainability concern.”

At Tam Holdings, the company is preparing for the future by constantly evaluating how it can better represent the interest of its partner airlines, particularly because expectations have changed. Previously, an airline would seek a partner with local expertise, experience, professionalism and reliability, but given a more competitive landscape, Tam says airlines are looking for a partner who can fill the cargo capacity and provide end-to-end services, including customs, regulations, safety, security, quality, network, promotions, pricing and revenue management; in other words, all the principal activities of the airline.

“The ongoing global pandemic crisis has fastened the speed of the digitalization, technology and automation across all industries including aviation and logistic industries. Hence, the airlines will prefer a partner who can adapt quickly to digitalization, technology and automation, as well as social media and digital marketing,” Tam added.

Asia Pacific
This holds true for Asia Pacific, where e-commerce has accelerated the need for more capacity and digital tools to optimize networks and operations to ensure efficient supply chains.“Agility in terms of network and aircraft deployment will also play a key role.” Tam said. “Carriers need to optimize their fleet to ensure they have the right kind of aircraft to cater to the kind of cargo and market they want to cater to.”

Saudia visiting its GSSA in Hong Kong

TAM Wing Kun is currently selling the freighter capacity of Saudia, including five weekly passenger-freighters added to the schedule from Q3 of last year to meet strong e-commerce demand. Given the current environment of high demand and low supply, ECS Group’s Thominet predicts a very strong increase in yields in Asia Pacific.

“There is disruption in logistics in Asia in general. The strict measures in China and Hong Kong have a direct impact on operations and capacity… But at the same time, congestion and delays are currently occurring in central and southern China. We can observe the multiplication of blank sailing from the main Chinese ports on the flows to Europe and North America. This is currently causing delays, ranging from 1 to 3 weeks, associated with the lack of equipment that persists. This leads to the conversion of sea freight to air freight, although capacity is limited.

“In India and Bangladesh, the space and container crisis is continuing for sea freight, leading to a shift to air freight, so that demand is greatly exceeding available capacity. This demand is reinforced by the disruption of handling solutions and the difficulty of accessing the Chinese market,” explained Thominet.

Toughening the competition
ECS said it has made agreements with e-commerce players on certain routes, and in Asia Pacific the company is eyeing major exporter Vietnam in Southeast Asia and the Indian sub-continent for expansion. Tam Wing Kun, who represents Chinese airlines and pure cargo carriers based in Turkey and the UK, considers the entry of overseas GSAs as a positive sign that will ultimately benefit the cargo sales industry.

“The GSA/GSSA market in Asia is already rather competitive given the increase in number in the region. We also witness a trend of global/overseas GSAs expanding their network to the Asian market through acquisitions and self-set-up. I consider this a positive trend as this competition would ensure that GSAs will need to constantly improve and evolve which will benefit the industry,” Alvin Tam noted.

The ‘e-commerce effect’
According to Thominet, what is clear is that the demand for air logistics will remain strong (just like in the maritime sector), supported by growing demand in e-commerce. And ECS is responding with investments in tech and digital transformation to create new multiple services and offerings.

“More globally, logistics will be more focused on e-commerce needs. We 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,” he noted.

In TAM, the team is working on its digital presence and now represents (Saudi Post) in the Chinese market to cater to this growth. “Saudi Arabia is the key e-commerce hub in the Middle East and is now focused on infrastructure projects aiming at diversifying the economy beyond oil and positioning the kingdom as a global hub for investment and logistics projects,” Alvin said.

When asked what airlines consider if they want to be successful in cargo, Tam said: “airlines will also need to ensure a high service level. On-time performance is as critical in cargo as on the passenger side.”

Other Topics: cargo brokers, cargo sales agents, GSSA, Saudia Cargo, TAM Wing Kung Holdings

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