It looks as if there is a touch of mud-slinging going on in the competitive area of charter brokers. The announcement by three small companies, NEO Air Charter, The Charter Store and Pacific Airlift, that they have formed the Global Charter Alliance came with a punchy dig at the big boys in the market, aimed squarely at placing distrust among forwarders.
Harry Steiner, formerly president of Chapman Freeborn Airchartering, and now senior partner of The Charter Store, failed to pull his punches when he said: “The larger brokers increasingly conduct business with shippers and government entities directly, and so directly compete with freight forwarders. We take a different view: freight agents play a vital role in the supply chain, which we absolutely respect. So we work with them, not against them.”
NEO Air Charter, a recently formed Germany-based broker, which also boasts former senior management from Chapman Freeborn, has set out its stall on the basis of working with forwarders, not shippers. Paul Siegl, NEO’s project air charter expert, explained: “We have been the first to say that we respect the role of the forwarder in the supply chain, and we see them as out clients. We’ve noticed brokers going directly to the shipper and know it’s going on. They try to cut someone out so they can up the rates.”
But one source from a large broker told The Loadstar: “It’s quite amusing how you get managers from big broker companies who often dealt directly with shippers. They then leave the company, set up their own small brokerage and then sing out to the press that they never deal direct with shippers. It’s what the forwarders want to hear, but I hope they can see through it.”
The Global Charter Alliance spoke of “the larger brokers”, perhaps a little unfairly tarring them all with the same brush. Because fingers seems to be pointing rather specifically at one company in particular, which “got so powerful in the market it went direct to shippers and got on some forwarder blacklists,” revealed one source.
In a market which has been suffering from overcapacity, however, it is not only the forwarders who are feeling the pinch. Brokers too, complain that forwarders are cutting them out of the deal.
“More than ever deal directly with the airlines, and airlines, when they can, deal directly with the forwarders, so the broker position can feel like a diplomatic minefield. Both brokers and forwarders need to protect their positions, and share mutual respect,” added the source.
Most brokers agree that forwarders are an essential part of the chain, both because of their relationships with shippers and ability to deal with onward transport.
Meanwhile, Siegl added that the new alliance would help expand the networks of the smaller brokers, and that it hoped to extend it further with the addition of new partners. He preferred not to comment on any antitrust implications the alliance could bring.