Air Cargo Management

How the role of agents in cargo is evolving with the needs of the industry

cargo agents

The role of general sales and service agents is evolving with the ever-changing needs of cargo airlines and the industry. Keith Mwanalushi examines how they are responding to the current environment

Lately, the performance of the air cargo industry has been relatively grim. The picture painted by IATA recently shows that 2019 was the worst year for air freight demand since 2009. Full-year figures for 2019 showed that demand, measured in freight tonne kilometres (FTKs), fell by 3.3 per cent compared to 2018.

In the four weeks to 2 February 2020, analysts at CLIVE Data Services saw a four per cent year-on-year decline in the global air cargo market. There are signs that confidence will return, but it’s still far too early to say what long-term effects will be seen from the impact of restrictions associated with combatting the coronavirus outbreak.

General Sales and Service Agents – GSSAs – will normally represent air carriers in markets where it may be uneconomical for an airline to maintain its own sales force and premises. Many of these GSSAs would have had to manoeuvre accordingly to help airlines achieve a cost-effective presence in what is a very challenging air freight market.

Director of GSA Development for Europe at HAE Group John Ward believes a good GSSA will ensure best possible returns for the airline in any economic climate: “In 2019, our UK and Ireland sales team bucked the trend and achieved double-digit growth in trader count, number of quotations, conversion percentage, shipments, tonnage and total retained carrier revenue.”

Ward says HAE achieved this through aggressive KPIs, a motivated salesforce, improved and increased e-marketing campaigns, the use of a world-class QMS (Quote Management System), and by leveraging big data to identify opportunities to grow or improve. “Our airline partners inherit these developments with no fixed costs, they simply remunerate us for what we achieve on their behalf.”

Developing digital tools

At the ECS Group, one of the main drivers to ensure airlines they represent can enjoy a profitable cargo market presence is digital performance – digital tools developed with performance in mind. “To maximise performance and business opportunities, we have developed innovative tools at every level of our group to support our growth and that of our clients as a result,” states chief executive Adrien Thominet.

“For example, because of our business intelligence tool, Apollo, we can conduct extremely detailed market analysis, so we can offer competitive and truly optimised rates. Using data analysis, we optimise airlines’ results and revenue.”

Thominet says to ensure airlines’ profitability, he also relies on having solid sales teams, who allow the company to create opportunities in new markets for the airlines they represent. “Because we represent more than 130 airlines, we can offer interline solutions, for example, and therefore new routes.”

Changing business models

GSSAs have had to adapt to market changes in the aviation industry and reinvent themselves to embody a new business model. “Selling capacity is no longer enough. We need to align ourselves with the model adopted by airlines and offer them symmetrical services; in short, we need to speak their language. And that’s what we do at ECS Group, by becoming a new kind of GSSA,” stresses Thominet.

Clearly, airlines’ requirements have evolved with the increase in competition and growth in cargo capacity. To stay competitive, Thominet feels calling on a traditional GSSA is no longer enough. “Airlines need us to provide them with better services at a lower cost than they could do themselves. And they need us to adapt to what makes them unique and distinctive; every airline is different.”

He continues: “They need innovations in order to be more appealing than their competitors and they need to be more flexible and to have the ability to delegate the activities they want.” He explains that this applies not only to the commercial and operational aspect, but also managing claims activities, customs, safety, security, quality, interlines, promotions, pricing and revenue management; in other words, all their principal activities. And the client wants to be able to delegate either part (bespoke service) or all of these activities.

“That’s exactly what we offer airlines: managing services that are traditionally provided by a GSSA, or offering bespoke management of cargo activities. We offer a multitude of possible combinations, or all-inclusive Total Cargo Management (TCM),” comments Thominet.

Ward from HAE Group echoes the sentiment that, should industry forecasts play out, some GSSAs will need to reinvent themselves. He says several have already realised efficiencies, but could feel more strain this year as a contracting market is met by the airline’s demand for increased activity – which comes at a cost – and market share.

“At HAE we have embraced digital transformation as our differentiator and made significant investment in our QMS which allows us to realise efficiencies in the back office, increase quality and accuracy, while maintaining the largest and most local GSSA field sales presence throughout the UK and Ireland.”

Technology meets business insights

Airlines are increasingly calling on GSSAs to improve digital technology and business intelligence strategies that will propel their airline clients forward. HAE Group employs a team of developers to build, maintain and enhance their QMS system. Ward says QMS allows his team to inherit data from clients or simply key it in once. From there, with process automation, a potential shipment flows between all stakeholders (staff, offices, airline partners and freight agent customers) and through all stages of its journey (quote, follow-up, booking, postflight, invoicing).

“QMS allows our internal sales and reservations team to be first responder to our agent customers, to maximise yields for our airline partners, and to optimise load factors. By closing every quote, we gain invaluable insights from what we do not win and together with our airline partners can shape our strategy in order to win more often,” observes Ward.

All the while Ward notes that the field sales team can stay abreast of every opportunity in real time, as the QMS system is web-based and adaptive to mobile devices. “This allows the salesperson – as the client relationship holder – to provide critical inputs in real-time, which may be the difference between winning or losing a quote.”

Chief strategy and digital officer at ECS Group Cédric Millet believes enhancing digital technology and business intelligence strategies starts with what the airline partners are looking for. “All airlines are primarily looking for revenue optimisation and this is exactly what we offer, besides the commercial activities we are focusing on.”

Millet says ECS have designed tailor-made commercial planning processes (pricing, revenue management) combined with performance management processes (sales steering, destination-mix optimisation), supported by digital
tools developed in-house.

“We are really proud of our state-of-the art business intelligence and reporting system allowing us to have real-time visibility of the results and constant performance monitoring. Our Apollo system also helps us identify the performance improvement leverages, a key factor in improving the results of our airline customers,” indicates Millet.

Another example supporting the optimisation of the airline capacity that Millet speaks of is the implementation of the Skypallet system (developed by Wiremind) across the entire ECS Group. He says Skypallet helps determine the operational volume of a shipment, together with the optimum way to build it up. “In other words, it maximises the utilisation of each ULD, and consequently improves the load factor of the flights.”

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