Polarised market will create a new age of global brokers

THE cargo charter broker’s market is going through a current phase of “polarisation”, accelerated by the current market conditions, according to Air Charter Service’s commercial director, Justin Bowman (right).

“The freight forwarding business has matured, with a group of true multinational players – and this business is now going the same way,” he said.

Bowman believes that the current stress caused by the global downturn has prompted companies to seek  companies with a sound financial footing. “Cargo is mainly a cash up-front business. If a company has good financial stability and can easily be credit checked there is less risk involved. So many companies are moving towards where they know their money will be safe.”

The fact that Chapman Freeborn, ACS and Air Partner take over US$1 billion of business is because of their size and security, according to Bowman, and he believes this dominance will grow in the future.

Although there has not been any drop off in business that ACS has experienced in the current downturn, Bowman believes there is a real and worrying current risk with operator insolvencies. “If an operator goes bust it could be very costly. Our job is to choose the right carrier to negate any risk. We run careful credit checks with all the operators we use and have adopted a policy where we don’t over-expose ourselves.”

He added that ACS spends $130 million on cargo charters each year and to mitigate the risk now refuse to pay upfront with any carrier they have any doubt about. “It is certainly challenging to be a cargo charter broker at the moment.”

For the full story, please read the latest issue of Air Cargo News, dated 16 October.

Share this story