Digitalisation could see air cargo winners and losers

Winners and losers could emerge as digitalisation’s role in air cargo develops, says the head of Global GSA Group.

Speaking to Air Cargo News, chief executive Ismail Durmaz says digitalisation will disrupt the industry, but it’s not yet clear which part/s will be impacted, and how.

“We don’t know what digitalisation will do to the supply chain. We don’t know whether it will harm something or will break down something in our industry.”

“Are we going be having less business or is the forwarder going to lose some profits? I think we will know it within maximum two-three years.”

According to Durmaz, one of the biggest challenges that digitalisation brings is the impact of increased transparency.

If all the stakeholders involved in a particular business activity know the prices being paid by each business it adds a new layer of complexity, he points out.

“Transparency can kill your business or it can make it. In the short term, transparency means lots of changes.”

Many companies are still suspicious of the changes digitalisation is bringing to the industry, Durmaz stresses.

He says one of these concerns is that companies will grow to become dependent on technology.

“Companies are concerned about control by portals. Because first they use you – you are part of it. So you bring them up, you make them big, but then it’s like drugs, then you need them to stay alive.”

However, while he says further digitalisation is inevitable, the industry won’t be receptive to technology that doesn’t offer clear benefits. “The e-bookings portals have to show that they have add value as well. So it’s not it’s not a done deal.”

Accelerating acquisitions

Equity fund-owned Global GSA Group is on a rapid path to growth now.

In February last year it acquired Aircargo Italia, Worldair and Star Cargo Italy.

The Group now plans to undertake three to four acquisitions over the next 18 months approximately.

These acquisitions are planned for “South America, the US and the Far East”, says Durmaz. 

The company’s existing network in South America spans Argentina, Brazil, Chile, Colombia, Equador, Mexico and Peru.

Global GSA Group has already signed the LOI for the acquisition in South America, confirms Durmaz.

“We are in the last phase. Hopefully, we will announce it within two-three months.”

Two more of the acquisitions will be in the US. These will be merged into one operation, and add to Global GSA Group’s existing US network, including New York, Chicago, Los Angeles and Miami.

Now that the Group is owned by an equity fund, the growth strategy has been accelerated.

“In the past we did natural growth, based on opportunities,” Durmaz says.

“But now we are owned by an equity fund and the timeframe to come to a result is much, much shorter. So we are doing much more acquisitions than with natural growth.”

Durmaz believes there will be more consolidation in the sector, but also opportunities for startups in the GSA sector.

“On the one hand GSA groups are growing and there will be more consolidation, but at the same time, there are new GSA startups popping up.”