PETER CONWAY LONDON
Forwarders have long been regarded as mere passive consumers. Now, they are looking for a say in where and how freighters fly
Are forwarders taking greater control of freighter capacity? The question is almost heresy in the air cargo world, where it is taken for granted that forwarders are the non-asset based purchasers of the transport services that airlines choose to provide. Yet, increasingly, it seems as if forwarders are crossing the line and seeking to influence the freighter routes that carriers fly, and even to create routes of their own.
The pioneer here was Panalpina. Since the late 1980s through its Air Sea Broker division, now absorbed into its SwissGlobalCargo joint venture with SAirLogistics, it has not only taken block bookings on carriers, as all forwarders do, but also had airlines such as Cargolux and MK Airlines start whole new routes, some on a shared-risk basis, some exclusively for its own use.
These days, SwissGlobal makes no bones about being a virtual carrier for Panalpina. It now handles half of the forwarder's air freight, with a target of 75% in a few years.
For some time Panalpina was notably alone in taking this step. But no more. In 1999 Danzas began operating a trans-atlantic freighter from Hahn, Germany to Charlotte, North Carolina, using an Airbus A300-B4F chartered from Turkish carrier MNG. In recent months, it has also been operating around 100 Boeing 747F charters from Asia to the USA, under the name Star Broker and based in Hong Kong, using Polar Air Cargo and Malaysian Airlines aircraft. In November, it hired staff in Basel, Switzerland, to develop the concept in Europe.
And that's not all. In a few years EGL, the hotshot US forwarder which went global last year by merging with Circle International, has built up an impressive network of point-to-point freighter flights in the USA, Mexico and Puerto Rico. Chairman Jim Crane insists that, like Panalpina's, EGL's flights are based on specific customer requirements on a specific route, and were started to meet a particular need that scheduled carriers could not. Crane admits, however, that "once you do a freighter for one customer, the others want to use it too".
Several US forwarders (Airborne, BAXGlobal, Emery) have their own US air networks, of course, but have shown little interest in extending the idea internationally. In October, however, EGL started a freighter service from Austin, Texas, to Taipei, using a Gemini DC-10. Crane has also said that he aims to find a European hub and set up a transatlantic freighter operation. A trend begins to emerge when this is added to other reports - Kühne & Nagel and Schenker sharing a Lufthansa B747-200F from Chicago to Atlanta since September, and Japanese-based global forwarder, Kintetsu, planning a freighter service from its home market to Liège in Belgium.
Emerging trend
This trend could have worrying implications for carriers. Danzas vice- president for product development, Thomas Christ, justifies the transpacific freighters by pointing to his company's recent merger with US forwarding giant AEI: "Once you reach a certain level of volumes, then the scheduled carriers can't fulfil your needs anymore."
Air freight consultant, Paul Jackson, chief executive of UK's Triangle Management Services, echoes this, suggesting that in a world in which global shippers demand increasingly tight transit times to serve increasingly complex supply chains, carriers that see cargo as a by-product of passenger business are not going to provide the services needed. This suggests more freighters, and implies that forwarders, with their door-to-door capability and direct relationship with shippers, are going to want to control them.
Forwarders have also learnt the lesson of express operators like FedEx and UPS which cornered the package market by offering guaranteed door-to-door service in a single company system. Both Panalpina and EGL have found that good yields are to be had by applying the same approach to ordinary cargo.
Set against this is the fact that, far from expanding its transatlantic freighter operation as it was planning to some months ago, Danzas has recently scaled it back to an occasional charter. The reason? "We found that we were able to get space on scheduled airlines. We only need to go into charters if carriers cannot meet our needs," Christ says. He even predicts that, with a recent burst of carrier decisions to buy new 747 freighters, charter needs might decrease.
On the other hand, Star Broker's recently appointed European co-ordinator is far from short of work: "His job is to negotiate with carriers, and create an in-house concept in favour of us and no one else," says Christ. "We aim to bundle our hundreds of consolidation services around the world more effectively."
In other words, whether or not they create their own routes, Danzas and other big forwarders are clearly looking to use their buying muscle to influence airline operations.
Source: Airline Business
