Air freight forwarders, who traditionally rely on their independence and savvy to negotiate low carriage rates, soon may align with foreign-based airlines, some industry officials say.
Such a switch would allow forwarders and scheduled flag carriers to combine strengths and better compete with all-cargo airlines like Emery Worldwide and Federal Express Corp. Efforts would be directed at enhancing door-to-door service, forwarders say.Arrangements likely would vary in scope. But essentially, forwarders would
serve as retailers, buying guaranteed space at a discount from a preferred wholesaler airline, said David L. Marshall, chairman of Burlington Air Express Inc., a large freight forwarder.
Ideally, forwarders would feed outbound shipments to the preferred international carrier at various gateways, he added.
And with internal barriers falling in the European Community in 1992, individual flag carriers will be better able to carry a forwarder throughout the entire trading bloc, officials say.
In addition, a forwarder could act, for a fee, as a foreign airline's domestic agent. It would clear inbound freight and distribute it to the consignee's doorstep, Mr. Marshall said.
Things, however, remain murky.
"There are quite a few unanswered questions at this time," said John J. Cella, executive vice president of Airborne Freight Corp.'s international division,
Still, "what they (airlines) have is lift," Mr. Marshall said.
Forwarders, in fact, are in the driver's seat, he said. They control U.S. originating traffic and handle drayage. "There aren't a lot of us, there are a lot of them," Mr. Marshall added.
No longer, then, would forwarders prowl the market, seeking the best deal among airlines, in terms of price and service on each lane segment.
But strategic alliances aren't the way to go, said Larry Rodberg, president of Eden Air Freight Inc., a forwarder based in Irvine, Calif. By aligning with an airline, the forwarder surrenders its birthright, flexibility, Mr. Rodberg said.
Flexibility to chose among competing carriers is a forwarder's most valuable asset, he said. While a forwarder may cut deals with specific airlines, it must reserve the right to shop the market, Mr. Rodberg said.
"We still have to have our freedom," Mr. Rodberg said.
Exercising that freedom also reduces the forwarders risk of working with a single carrier, said Mel Williams, British Airways' new cargo director, in a recent speech.
To date, airline/forwarder partnerships remain pure talk. Forwarders and airlines recently have aligned with each other, but haven't crossbred.
But "at meetings and association get-togethers, (discussions about) strategic alliances between forwarders and airlines are the rage," Mr. Marshall said.
And "by 1992, the national-flag carriers and the big forwarders like Burlington will have deals in place," according to Mr. Marshall.
Alliances and partnerships would avoid a great deal of duplicate investment, particularly in the area of computer technology, BA's Mr. Williams said.
"Personally, it (such an arrangement) scares me. I am not sure that an alliance with an existing forwarder is the way to go," said Peter M. Diefenbach, marketing manager of Nippon Cargo Airlines.
Preferable is an alliance with an independent airline, a carrier not tied to particular forwarder, Mr. Diefenbach said.
Such an arrangement, however, may be wishful thinking. Currently, there is a paucity of domestic freighter capacity. Much available space belongs to integrated carriers, airlines controlled by forwarders. Two such companies, Airborne Freight and Burlington, operate aircraft only domestically.
To date, Airborne has looked to establish alliances only for inbound express shipments, Mr. Cella said.
Under Mr. Marshall's probable scenario, forwarders would be responsible for customer service, ground pick up and delivery and customs clearance on inbound shipments.
Overseeing domestic carriage is of particular importance to foreign flag carriers, most of which limited under bilateral agreements from directly arranging the routing.
The bottom line is that each partner concentrates on what it does best, ultimately to improve service.