News / MSC Air Cargo ends deal with GSSA ECS and strengthens in-house team

© Dipankar Bhakta

News that MSC Air Cargo has split from ECS Group, the French GSSA company, has shone a light on recent moves to shore-up its staff and potentially go it alone.

Jannie Davel, SVP air cargo for the shipping line, noted: “We are strengthening our commercial capabilities and bolstering the presence of MSC Air Cargo commercial teams worldwide, reaffirming our commitment to meeting evolving client needs globally.

“We have decided to terminate our partnership with ECS effective February 15th, 2024.”

Mr Davel continued: “Change brings opportunities, and we’re confident this transition will lead us toward greater success.

“Looking ahead, we are dedicated to delivering enhanced value to our partners and clients.

“We believe these changes will position MSC Air Cargo as a key player in the industry, capable of meeting the dynamic demands of the global market.”

Last month MSC took delivery of its fourth 777 freighter, operated by Atlas Air. It follows its acquisition of a majority stake in Italy’s AlisCargo Airlines in August, an airline in which it has said it intended to place more 777 freighters.

But while MSC has shored up its commercial team, does it have sufficient expertise to run its own airline?

It is likely to appoint GSSAs – but Mr Davel’s statement indicates a desire to bring more sales in-house.

Not only is Atlas Air a partner, but it appears the line has been banking up experienced staff – many from the now-defunct AirBridgeCargo Airlines. A quick glance at LinkedIn shows some 10 staff have joined MSC Air Cargo in past months, many of with experience at ABC and/or Emirates SkyCargo. MSC appears to be taking quietly confident steps towards its own operation.

One senior air cargo executive told The Loadstar: “MSC wants to build something. I understand that eventually it may even want to separate from Atlas and go it alone – although it will take a few years to achieve that though.”

It’s the second time ECS Group has been hired by a shipping line trying to get into air operations: CMA CGM began its air journey with ECS Group too. But industry sources say ECS’s services, which can include total management of a carrier’s cargo operations, can be expensive and airlines may prefer to run their own operations more profitably.

The source said: “ECS charges a lot, but delivers a low yield. It and Air Belgium were the only ones making money on CMA CGM.”

ECS Group this year announced it was acquiring its Moroccan partner, Efis Maroc. It follows December’s acquisition of Americas GSA, as well as November’s purchase of International Airline Marketing.

The source added that private equity owners were starting to be concerned over earnings at GSSAs.

“There is a short lifespan left for GSSAs if they don’t move on from the model they have now. ECS is trying to buy everything it can to boost earnings, and then try and sell.”

ECS reportedly made revenues of some $530m in 2023.

Meanwhile, MSC is also in acquisitive mood and therefore unlikely to need outsourced sales staff via ECS Group. In 2022 it bought Bolloré Africa Logistics and in December made a bid for French forwarder Clasquin, bringing it into line with rival CMA CGM, which is integrating more forwarding companies into its Ceva subsidiary, as well as integrated Maersk.

Whether MSC Air Cargo will fall foul of other forwarders, which sources say is a problem at CMA CGM, is as yet unknown. MSC is also investing in port and rail infrastructure.

For now, MSC’s four aircraft are certainly busy. One is operating between Dallas and Hong Kong, another between Liege, Atlanta and Indianapolis. The other two are flying between Europe, the Americas and Asia, with the latter’s destinations including Xiamen, Tokyo, and Incheon.

Mr Davel noted his “sincere appreciation for [ECS’s] dedication and valuable contributions throughout our collaboration”. he added: “Their commitment has played a crucial role in our journey, and we extend our gratitude for the growth experiences shared together.”