ECS Group Breaking new grounds in tough times
This pandemic has created an era of unprecedented disruptions and uncertainties colliding with possibilities and innovative solutions never before seen in history which many hope will lead to better times.
While uncertainties are still very much felt anywhere with poverty and unemployment rising, more than 135 million infected with COVID-19 virus and related deaths rising to nearly 3 million worldwide, new possibilities and opportunities are also abundant.
There are the mRNA COVID-19 vaccines that took less than a year to develop instead of years had traditional methods been used, virtual work and business, social distancing, the rise of touchless & contactless buying thru e-commerce, use of passenger planes for air cargo, ebooking on air cargo and trucking, digitalization in the manufacturing industry and so on.
And while the global recession lingers on due to the pandemic, some industries like air cargo remains dynamic, agile and growing.
With most passenger flights still grounded, air cargo felt the pinch with the loss of belly capacity. However, the rise in demand for air flown goods, particularly vital medical supplies and vaccines, offset this with cargo yields estimated to be up more than 40 percent and performance varying widely by carrier.
Air cargo airlines with dedicated freighter fleets, especially those with express and charter flights, have seen the most growth in cargo volumes and revenues.
ECS Group & CMA CGM Air Cargo
ECS Group, the leading global GSA company, is among those that broke new grounds amid the air cargo industry’s rise in these challenging times.
The Group has forged new partnerships in different regions and airlines, including new players in the industry like CMA CGM Air Cargo, the newly-formed air cargo carrier by global French shipping line CMA CGM Group.
Adrien Thominet, ECS Group CEO, told Air Cargo Update, he’s very much delighted with their new partnership which he sees to grow further in the future.
“The CMA CGM Group’s decision to open an air cargo division is in keeping with their development strategy and their desire to diversify the freight offering available to their clients. Some of these clients require fast transport, particularly in the luxury and tech sectors. Demand is high, and with the slowdown in passenger activity, hold capacity has dropped significantly,” said Thominet.
CMA CGM Air Cargo has initially commissioned 4 cargo aircraft and recently launched its 10 weekly flights between Liege and Chicago.
“This is excellent news for the industry, with new opportunities for forwarders in this highly dynamic sector and a more diversified offering with multimodal solutions. Our teams at ECS Group sell the CMA CGM group’s capacity on its behalf, and the aircraft are full. It’s a very good sign for things to come and we firmly believe that their aggressive strategy of development in the air cargo sector will soon enable them to become a key player in our industry,” said Thominet.
The ECS CEO said sales are strong for CMA CGM Air Cargo and the industry has quickly warmed up with the new airline.
“Our partnership has got off to an excellent start – sales are strong and it’s been very well received by the industry. Over the coming weeks, our partnership will accelerate even further with the arrival of two additional A330 aircraft that would serve the Middle East. Our goal is to work together to create a global network – that’s what we’re currently working on with the CMA CGM group, while also taking optimizations to the A330s into account,” he said.
“In my view, this is a very promising partnership, with many developments still to come. Our expertise is complementary, our networks are complementary, and we will be able to create a whole host of opportunities as a result,” he added.
While challenges are still there, Thominet expressed confidence the new airline will pivot its way to success saying, “There are a number of challenges to overcome, but we’re already overcoming them thanks to our joint effort. Firstly, CMA CGM is a newcomer to air cargo, and so it needs to find its place. But as I said earlier, capacity is selling very well and we have used all of our expertise and our entire network to support our client by promoting and marketing their capacity.
“What’s more, I think that CMA CGM Air Cargo has arrived at the perfect moment – there is real demand and the reception it’s been given couldn’t be better. Other challenges include creating connectivity within the network to develop supply, create new segments, and ultimately succeed in developing a multimodal approach. It’s a longer-term, multi-step process, but I’m convinced that we’ll get there.”
2020: An Unusual Year
2020 was probably one of the most difficult year for many people and companies, including ECS which represents hundreds of companies in over 50 countries through its 167 offices worldwide.
Thominet described 2020 as both “difficult and unusual” that brought unprecedented challenges and growth at the same time.
“It was a difficult and unusual year for us as well, but overall, I would say that we withstood the crisis better than the market (which recorded a 35% decrease in volume and a 30% increase in revenue). There are many challenges as a result of uncertainty, market fluctuations and new ways of working (both within the group and with our clients and partners),” he said.
“What enabled us to better withstand the crisis was first and foremost our expertise, our ability to adapt and our capacity to offer solutions to our clients. This meant we were very quickly able to offer our clients new outsourcing solutions so they could optimize their costs and revenues to the greatest possible extent. And above all, with our main partners, we focused heavily on preighter operations and charter activity, putting these operations in place – sometimes from A to Z – in record time,” he further explained.
The ECS CEO said the biggest change occurred at their organizational level with remote working quickly adapted for safety reason while keeping up their services with their clients.
“The reorganization was needed to enable us to continue to offer new business solutions to our clients, such as data capture, for example, as well as management of all ops aspects (including Quality, Safety and Security) and solutions to respond to the growth in e-commerce (GSA Mail Solutions) which developed even further with the pandemic.
“All of this allowed us to take the initiative and offer our clients a wide range of solutions to increase their revenue and/or reduce their fixed costs, which are crucial in light of the current situation,” he said and praised their teams at different parts of the world. “I’d also like to pay tribute to the exceptional work of the groups’ teams and the solidarity they have shown – these two factors clearly made all the difference.”
Optimism in the new normal
The global economic collapse caused by the pandemic is so massive experts believe it would take years before recovery can be reached. Vaccine distribution delays, new virus variants that are more spreadable and resistant to vaccine, market fluctuations, political uncertainties and other external factors could also impact how fast global economic recovery can be realized.
And certain frontline industries like healthcare, airfreight, among others, need to be strong to support lives, livelihood and businesses.
Thominet said he remains optimistic about the future despite uncertainties with many opting to adapt rather than be defeated by an invisible enemy.
“My vision continues to be an optimistic one because the industry has shown just how capable it is of quickly reorganizing and adapting to a sudden change in the situation. Despite everything, there are still many difficulties to overcome because uncertainties surrounding the months ahead remain, and many airlines are in a difficult position given the absence of passenger flights,” he said.
“I think that we’ll also see new stakeholders emerge in our industry, many of which will be linked to the e-commerce boom, to new-found awareness of air freight, and of course to the acceleration of digitalization within our industry,” he added.
ECS is among major companies that have prioritized digitalization long before the pandemic highlighted the need to transition to smart technologies.
Its investment is paying off and the company is convinced it must sustain this move to keep up with the changing times and new technological trends in the era of the Fourth Industrial Revolution.
“Yes, we have continued with – and even accelerated – our digitalization by continuing to invest despite the crisis. The idea is that digital transformation within the industry is in its infancy, that it will be one of the keys to recovery, and that demand is growing in the sector. As digitalization is destined to increase and service providers will undoubtedly become stronger (as happened on the passenger side), we thought it was essential to be ready for the next steps. This is the reality, and we are ready,” Thominet said.
“We’re also convinced that by doing this, we will get through the crisis more easily. We’re able to improve yield management thanks to our in-house business intelligence tool (Apollo); boost our responsiveness, performance and reliability by optimizing processes; continue to train our employees all over the world thanks to our e-learning platform (Discovery); and increase our clients’ visibility via partnerships with the main e-booking sites,” he added.
While air cargo is keeping up with the demands of the times, Thominet opined it needs to step up efforts to embrace digitalization.
“The industry needs to make up for lost time and go fully digital. I think that for many, the crisis has revealed just how necessary this is. We support our clients in this field and this makes us the GSA that offers the greatest range of advanced digital solutions. Without giving an exhaustive list, the main tools we’ve developed in-house are: Apollo: business intelligence and reporting system; Quantum: quotation tool supporting the ad-hoc pricing process; Discovery: internal e-learning platform; Pathfinder: shipment tracking system,” he said. “We also use the best technologies and tools available on the market, for example by working with the main e-booking platforms, as well as Wiremind and Skypallet, which help to optimize loads.”
The pandemic has no doubt exposed both vulnerabilities and strengths of different economies and industries like aviation and healthcare. Many have fallen and others remain struggling.
Air cargo, on the other hand, has shown its remarkable strength and agility in the face of adversity but Thominet said there’s no time for complacency.
“Air cargo has shown just how indispensable it is in keeping the global economy running and providing rapid support to people worldwide. It has demonstrated an impressive level of responsiveness and the hard work of the industry’s teams has been recognized the world over, so much so that if another event such as this were to happen, the sector would be ready. That said, the pandemic has also weakened many stakeholders and the market needs to do all it can to self-regulate. It’s essential that sufficient yields are reached to allow airlines to continue their growth. Our industry itself must offer and provide solutions for a sustainable recovery. It’s up to our industry to shape its future,” he said.
And as the head of ECS Group which breathes life to dozens of cargo carriers across the world, Thominet said finding solutions is crucial to the business.
“And at ECS Group, that’s exactly what we’re doing – we’re constantly creating new solutions that are adapted to the circumstances and emerging needs of our clients. This way, we enable airlines to outsource more of their costs, but also to develop new income-generating activities. All of these solutions are of course entirely bespoke, recognizing the fact that each airline has its own unique needs,” he said.
Global trade has resumed albeit far from the pre-pandemic pace it’s accustomed to. The airfreight industry, which accounts for more than $6 trillion of goods traded worldwide annually, is there to ramp things up.
Thominet said one of the valuable lessons he learned in this pandemic is that expertise and human analysis are still, by far, our best tools, to rise above our challenges.
“One of the lessons I’ve learned is that in a time of crisis or when faced with an uncontrollable and unforeseeable new situation, expertise and human analysis are by far our best tools to emerge from it. The air cargo industry has demonstrated its ability to transform itself during the pandemic and to take the reins to offer transport solutions in response to the drastic fall in passenger flights and hold capacity. Pre-pandemic, cargo made up 5-10% of airlines’ revenue.
“Today, though, it accounts for 30% of their income. This makes it a powerful economic driver for them. As a result, it needs to be supported and championed so it can continue to play its role as a driving force for airlines but also more broadly for global trade,” he concluded.