GSSA Cargo Sales Agents in India and Asia Making a Killing in Air Logistics

To begin with India jumped 19 places and ranked 35 in 2016 as against 54 in 2014 in the latest Logistics Performance Index by World Bank. Better performance in logistics not only boosts initiatives like Make in India, by enabling India to become part of the global supply chain but also helps to increase trade.

According to the 2017 Agility Emerging Markets Logistics Index, India climbed to the second position in the 2017 Index, switching spots with UAE; China was once again numero uno.

The Indian air cargo sector is poised to undergo significant growth in the coming years. The international and domestic freight traffic have shown growth of 10.8 percent and 7.0 percent respectively resulting in overall increase of 9.3 percent in total freight traffic during the period (April-January) 2016-17 as compared to (April-January) 2015-16.

Across the world, according to IATA’s forecast, there has been a rise in cargo carried in 2018, which stands at 62.5 million tonnes, up by 4.5 percent to 59.9 million tonnes in 2017. GSSA (general sales and service agent) and GSA (general sales agent) play a large role in facilitating this growth. According to WorldACD, a leading data provider of air cargo markets, around 23 percent of air cargo volume is sold by GSAs. Stephen Dawkins, chief operating officer, Air Logistics Group, a leading GSSA in the UK is cited in media, “the size of the worldwide cargo airline market in 2017 stood at 55 million tonnes, of which the GSSAs controlled 20 percent.”

Adrien Thominet is chief executive of the largest GSSA in the world, ECS Group. In June 2018, ECS was acquired by investment firm Naxicap Partners to help continue the GSSA's acquisition strategy which factors in Asia in a big way.

ECS manages 900,000 tonnes of air cargo on behalf of airlines, representing an annual sales volume of over one billion euros. It offers a worldwide network of 137 offices across 47 countries, with over 1,000 staff working as a fully integrated organisation. Thominet had said the European market was largely consolidated already, which explains why ECS and every other GSSA is very bullish on Asia.

Thominet explained that Asia’s GSSA market was still very fragmented with lots of ‘local hero’ companies and there was a need for market consolidation. The company has already made two acquisitions in Asia.

“The big ambition is to grow massively in Asia…and also means that we are delivering the necessary organisation and services in the region,” Thominet said.

One such local hero is Delhi based Zeal Global Services. It offers a host of services to its partnered airlines which include the sales, marketing, and distribution. Launched four years ago, the GSSA arm of the company has formed exclusive deals with airlines like Air Asia Indonesia, Copa Airlines Cargo, Miat Mongolian Airlines and ASKY Airlines to transport consignments from Indian companies to destinations across 164 countries. 

"By 2020 we hope to grow the cargo out of India of pharma products by up to 30 percent or ten million tonnes. We have been growing our revenues at 40 percent CAGR since inceptions. The routes involving Middle East accounts for a substantial part of Zeal's revenue",said Nipun Anand, director at Zeal Global Services.

Other Indian GSSA firms are Flywell Aviation, Delex Cargo India, Minar Aviation, Global Aviation Services, Allied Aviation. M&C Aviation, Group Concorde are international GSSAs present in India.

Potential low-cost carrier customers, which often look to completely outsource their cargo operations, are also in abundance in Asia, making it a good area for investment.

In conjunction with its expansion in Asia ECS Group, and even home grown cargo firms like Zeal Global will look to  invest in its IT offerings due to rising demand from low-cost carriers as they increasingly ask for more business intelligence information and visibility of their cargo revenues.

According to industry reports Thominet is quoted: “There are a lot of low-cost carriers in Asia and they all want big GSSA that have a network, we can give them financial guarantees and an IT platform. In addition we would like to develop new tools with them because they will love it if we start to explain to them all the digital applications they can have because it matches with their passenger activities.”