The US is something of a terra incognita as far as general sales agency is concerned, says local country manager at ECS Group, Francisco Hernandez.
“In my eyes, the GSA markets in the US are in a very primitive stage compared to the rest of the world. There are still many untapped opportunities for airlines to utilise the GSAs’ full potential,” he explains.
They can offer much more than a simple sales outlet: “The GSA industry will continue to expand as we see airlines lean on their partners for market-specific intelligence and technology. Airlines will continue to focus on their core business and utilise their partner’s expertise to guide them and properly manage capacity, consistency, and profitability. And airlines continue to outsource more and more services.”
Many possibilities for cargo and agent expansion are available away from the main traditional gateways, Hernandez believes. Airlines and GSAs with strong road feeder networks have been able to expand away from major airports and use less expensive options to benefit both the carriers and the agents providing new route alternatives at lower cost. “We would like to see this trend expand and continue its development,” he adds.
The US market still has a lot of potential, not only for the GSAs but for forwarders, says Hernandez: “Worldwide consolidation of forwarders and offices continues as top players look for expansion and growth.” Furthermore, forwarders will look to GSAs as an option, not only for excess capacity, but as the main source of incremental revenue opportunities.
Prospects for the ECS group are exciting, he adds: “We have invested heavily in a robust team to cater those individual needs and feel very much ready for the future ahead.”
There are some clouds on the horizon, though. Trade wars remain “a very, very sensitive subject” as they have been throughout 2019 and US to China trade airfreight is down by almost 25% in the year to date and it remains a very volatile market. With China being such a strong part of the airfreight business in recent years, any shift in demand has a major effect on the market’s overall strength and on yields.