How The Industry Has Changed Over The Past 25 Years
This week I was corresponding with an old “Kiwi” mate, whose friendship spans the thirty-eight years I have been in the industry. We both started in transportation around the same time in Auckland. He was lamenting how the industry has changed and not for the better. It started me thinking of the good ol’ days of the late sixties and early seventies when in New Zealand. if a customer needed something airfreighted out of the U.S.A. there was only one forwarder, Emery, to whom he would entrust to handle the shipment. Out of England, it was either MSAS or Lep and from Australia it was Maynair and Brambles, who enjoyed the market share. Today these companies do not exist.
Here’s my list of multi-nationals of the eighties:
1. Airborne
2. AEI
3. BAX Global
4. CF Airfreight
5. Circle
6. Danzas
7. Expeditors
8. Fritz
9. Jardines
10. Kuehne and Nagel
11. Lep
12. MSAS
13. Panalpina
14. Pandair
15. Schenker
16. WTC
17. Union Transport
Fast forward to 2008:
1. Agility
2. Ceva
3. DHL
4. Expeditors
5. Kuehne and Nagle
6. Panalpina
7. Schenker
8. Union Transport
9. UPS
My real involvement in global international airfreight started in the eighties. Every country had an indigenous forwarder who enjoyed large local support. Today, that is not the case at all as multinationals extended their tentacles. I drew up a list of the multi-national forwarders of the eighties and did the same for 2008. My buddy is quite right how the industry has undergone huge change, but unlike him, I see the change as the best opportunity for forwarding returning to its true roots of personal service, where small is better, way better.
In less than twenty years the list has halved with DHL alone absorbing Danzas, AEI, Airborne and Excel (MSAS). Many old salts took early retirement because they were forced to and other younger executives simply disappeared with their old companies to that hanger in the sky. Some in order to stay in the business moved over to smaller forwarders and took huge pay cuts just to keep their jobs. A few have set up their own corporations such as Hank Hartong of AEI fame in establishing IJS Logistics.
To me, Hank and his team are on the money. Their goal is to grow internationally as a mid-sized forwarder with revenues of around $500 million. The new big boys are ripe for the plucking. They have used their so-called buying power to send many cargo operations of carriers to the wall and definitely have shrunk all cargo carriers into marginal or loss situations. They have become the enemy of the airlines, not their partners. Customers of large multi-nationals are finding it difficult to maintain close relationships as service levels (principally because of merger/takeover upheavals) over the past few years have been on the decline. Enter the small to mid-sized forwarder armed with all the tools, including good airline relations, to provide great service with the flexibility to match. His future is now assured.
As a wholesaler, I was tickled pink to negotiate a deal with a large multi-national at destination to look after their “expedited” shipments ex the States. The company received head office approval to allow for this change in order to compete in the marketplace. To date the service we have provided has been exemplary compared to the previous in-house situation. When it comes to satisfying the customer, small, not big is beautiful. I believe in order for the large multi-nationals to compete against the rising tide of the small to mid-sized forwarder they will have to break themselves up into smaller units and operate exactly as the small guy does. If the big boys don’t, then their future is at peril.
So to my mate, Pat down under: It is not all gloom and doom. This airfreight industry is still full of exciting opportunities, just as it was in its infancy forty years ago, when you and I were both schoolboys in shorts!
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entewantJoina
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entewantJoina
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