News / Forwarders: can an airline do without them? An age-old debate airs

© Yanik Chauvin

The age-old debate about whether airlines need forwarders started up again at CNS in Dallas this week.

One senior airline executive  – very much off-the-record – said he was tired of asset-owners not making the most money, while the forwarders continued to reap rewards, adding: “We can do without them.”

Forwarders were quick to react.

“You would typically hear that from an airline who’s never met a customer, or never interacted with a customer directly,” said one senior forwarding executive.

“There are a lot of complexities managing customers today. If I have 100 customers, I have 100 different ways and expectations of handling the business. Airlines just fly routes, line-haul routes from one area to the next. But the business is never the same, and I think that’s the value in the forwarder, in providing different types of service.”

Airlines are increasingly dealing directly with shippers in the e-commerce world, perhaps giving them more confidence in their ability to work with the end customer. The frustration may also have been particularly prevalent during CNS, where forwarders and airlines conduct continuous meetings to discuss agreements for the rest of the year and 2025. Few shippers were present, with the exception of Apple and some pharmaceutical companies.

Brandon Fried, executive director of the Airforwarders Association, said: “It’s certainly an antiquated and, I would say, myopic perspective.

“Airlines do what they do best – transporting boxes from one city to another – and they do it well. But the reality is that the shipper comes to us with complex logistical challenges that often  require many modes, not just air cargo, as well as a plethora of concerns that airlines don’t engage in on a routine basis.

“Perhaps this airline didn’t understand that forwarders manage 80% of the cargo on an aircraft, and to boot us out of the door would make life a lot harder.”

One airline executive, who agreed the carrier did need forwarders, did however say they were tired of seeing forwarders promise low rates to customers, and then take that rate to the airline, which would often be below cost.

The senior forwarding executive responded: “We’ve seen that same behaviour from other forwarders to our customers. But that is not what we do.

“We have a good idea when we go out for a piece of business, what our expected market costs should be. That may differ from one carrier to another. And it may differ for forwarders, depending on their business, network and area of expertise.

“We use that as our best estimate to provide pricing, because, from our perspective, we still need to ensure profitability and won’t risk that in the hopes that a carrier gives us a rate it can’t manage.

“We want the carrier to be able to service the business – and if it can’t be profitable in the long term, it won’t be able to. And eventually, we all lose.”

You can hear more on this story on The Loadstar Podcast, at 26.07mins.