Forwarders look ahead in air cargo market
Richard Fisher and Ross Bacarella joke like old friends.
“We don’t want to tell everyone our secrets,” Bacarella, president of BTX Global Logistics, says when talking about the air forwarding market.
“No, and I don’t want him to know my secrets,” Fisher, president of Falcon Global Edge, responds.
“I already know his secrets,” Bacarella says.
“He thinks he does,” Fisher counters.
But Fisher and Bacarella agree on some points in a conversation at AirCargo 2014, an annual gathering of airfreight forwarders, in Orlando, Fla. For one, air cargo needs to expand its thinking.
“We’re going to have to look at all-new ways of moving product that may not be as expensive as air, not quite as cheap as ocean, but faster and between both of them,” Fisher says.
He mentions the possibility of cargo airships.
“Who knows where the blimp market can go?” he says. “At 115 miles per hour, you’re not going to set any speed records, but you’re going to be faster than a truck, faster than a boat, slower than airplane, with a price point somewhere in between. We have to investigate those types of possibilities.”
Bacarella says BTX, which is based in Shelton, Conn., is focusing more globally.
“The domestic transportation of airfreight is almost extinct [compared to] what we used to handle. We’re in the heavyweight sector of the business, and there’s not a lot of planes that can handle heavyweight freight anymore in the U.S.,” he says. “On the airfreight side, my company is looking for more global import-export air opportunities, so we’re focusing more globally than we have been in the years past.”
Pilot Freight Services is also looking for more international development, says Terri White, corporate field operations project manager. The company recently opened an office in Spain and has had an office in Amsterdam for a few years.
She sees a bumpy year ahead for the air forwarder market.
“I see it contracting again, so it’s going to be more challenging to develop new products and create solutions for the customer,” White says.
Meanwhile, C.F.I. Delivery’s next step is to begin air cargo operations. The San Antonio, Texas-based forwarder covers Texas, Oklahoma and Louisiana, but hasn’t entered the airfreight market yet.
“We’re just trying to open our doors,” Rick Shelton, president of C.F.I. Delivery, explains. “It’s just something we need to be a part of. We like to meet the needs of all of our customers.”
Fisher says more freight forwarders are giving their attention to trucking rather than air.
“A lot of forwarders are concentrating on domestic trucking,” he says. “It’s something that we do and we have to, but we don’t look for it because there’s so many factors influencing what goes on in the trucking industry right now – regulatory stuff, the hours of service kicked in last summer, now we’ve got the new [U.S. Federal Motor Carrier Safety Administration] requirements that are on the table. All of that’s going to drive trucking costs up, so if you’re engaged in domestic trucking as a forwarder, it’s kind of a race to the bottom in terms of profitability and margin.”
But Fisher seems more hopeful when he talks about air cargo and technology. Falcon Global Edge caters to clients transporting high-value goods, so his company is looking at tracking devices that can be embedded in shipments in order to transmit real-time information.
“You’re not tracking with an airline anymore or with a trucking company. You’re getting direct information from the shipment itself about where it might be,” Fisher says. “A lot of the high-value shippers like that idea because they have real-time visibility.”
White mentions technology several times, saying the use of it will increase significantly on the operations side.
“The cost of operating has gotten more expensive, and the personnel needed can be somewhat reduced by the use of technology,” she says.
Pilot Freight Services is also handling more e-commerce.
“As a result, there’s a totally different profile of how those shipments are handled, and it has its own subset of issues and problems,” White says.
Bacarella says BTX is getting into more brass tacks with clients.