With geopolitical challenges always just around the corner in the airfreight industry, GSSAs have to be agile and ready to adapt.
This is particularly critical in the current climate, with a “high” risk to cargo operations at present amid a number of situations that have the potential to alter the industry; including the situation in Gaza, Russia and Ukraine, in the Red Sea shipping lanes and growing tensions between the United States and China.
“GSSAs have a pivotal role to play during current times offering carriers huge savings for outsourcing their cargo requirements,” Mark Andrew, Chief Executive Officer of AIA Cargo, stated.
“We expect to see more carriers switch to GSSAs and those who already outsourced are potentially looking for better deals from those GSSAs that have flexibility.”
READ: Adapting and innovating
Return to normalcy
Airfreight volumes are rebounding, as routes that were halted or hampered during the Covid pandemic restart. However, some regions still present more challenging environments for cargo operations.
In Asia, the pandemic brought in new freighters from local Chinese forwarders when there was a reduction in passenger operations. As airlines have returned to full schedules and freighter operations from local operators remain in place, an imbalance has emerged in the market, driving down yields and margins to lower than before Covid.
“We anticipated this market shift last year and budgeted for the lower rates and margins to Asia from Europe as one example of how our operation is streamlined to cope with the demands of a shifting industry,” Andrew explained.
READ: AIA Cargo seeks to build on impressive year of growth
Future-proofing operations
Given the changing airfreight industry, AIA is setting out a clear path, not just in 2024 but beyond. These plans include, but are not limited to, creating sustainable initiatives, how the use of drones will impact our industry, plus how AI and automation integration can help GSSAs and their clients.
“Airlines are increasingly demanding of GSSAs and the roles they need to be covered. We have seen an upturn in requests for technology platforms, further assistance in their higher yield products and requirements,” Andrew highlighted.
This introduction of technology across its operations comes despite the industry’s “sluggish” approach to innovation, with things like paper still slowing things down and cutting into efforts to bolster sustainability.
“GSSAs are embracing the challenge of digitalisation by providing platforms for forwarders to check capacity, rates and book space faster than ever before,” he outlined.
AIA’s new inhouse system was launched at the start of 2023, providing a “fast track” solution under the “one-stop shop” idea, starting from the first enquiry of checking rates and capacity to booking the space required all from the start of receiving one email from the forwarder.
“We provide a full vision for our forwarders as they are able to follow all milestones on their bookings journey once delivered in, until collected from the consignee,” Andrew said. “Our digital process will continue to evolve over the coming months/years as we look at how AI can assist our requirements in the future.
“Technology is here and has vast capabilities to fast forward our industry to be bigger and better, he continued. “We hope that, sooner rather than later, we can embrace and achieve much more as an industry.”
