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service and worked primarily with business and industrial
customers? It’s been mostly relegated to the dustbin of history along with Addressograph machines and rotary-dial
telephones.
Like many airfreight forwarders who have evolved, Pilot
still provides basic forwarding services, but today, it is
broader-based, working with customers on a range of
challenges: strategic transportation management, designing
the optimal distribution network, and managing efficient
warehousing and fulfillment operations. Pilot also provides
Hill’s experience at Pilot
isn’t unique among airfreight
forwarders. Changing mar-
kets, economics, technology,
and customer expectations
all require expanded capa-
bilities and resources if for-
warders are to stay abreast of
the evolving needs of today’s
shippers. As a result, many progressive forwarders are fig-
uring out how to reinvent themselves to compete and keep
pace with a fast-changing business.
THE E-COMM JUGGERNAUT
As for what’s driving all the change, much of it comes down
to shifting consumer shopping patterns and delivery expectations. Like most segments of the transportation industry,
air freight has been impacted by the explosive growth
of e-commerce, “which is essentially reducing airfreight
volumes,” says Satish Jindel, president of Warrendale,
Pennsylvania-based SJ Consulting Group, a transportation
and logistics research firm that provides strategic consulting, industry insights, and analytical tools to shippers.
As Amazon and other online retailers have re-engineered
supply chains, they’ve restructured their distribution footprints to feature more smaller warehouses in closer proximity to the end-consumer. That’s caused a shift favoring
smaller parcel/package shipments versus larger pallet-loads,
and shorter length-of-haul—both of which negate the need
for traditional airfreight consolidation services.
And while more parcel volume has been good for UPS
and FedEx (and Amazon’s own dedicated transportation
operations), those smaller, more-frequent shipments traveling shorter distances, which defines e-commerce traffic,
are going via ground services versus air—especially if it’s
500 miles or less.
With consumers expecting virtually everything they order
online to come with free next-day or, increasingly, same-
day shipping, “sellers want to move [the freight] in the
cheapest way, so many times that’s going to be ground, not
air,” Jindel notes.
And then there is the elephant in the room, Amazon
itself. What’s been its impact on air freight and the forwarding market?
“Not so much of an impact on the average forwarder,”
says Bob Imbriani, executive vice president, international,
for Flower Mound, Texas-based forwarder and 3PL Team
Worldwide and a board member of the Airforwarders
Association, a Washington, D.C.-based advocacy organization for the aircargo forwarding community.
For most airfreight forwarders, Amazon has not been a
major customer, Imbriani says, although in many cases, for-
warders are managing trans-
portation and logistics for
clients selling goods through
Amazon or as an Amazon ven-
dor. “Even with the explosion
of e-commerce, there is still a
considerable market for spe-
cialized heavy-weight cargo
and even just general volumes
of B2B [business-to-business]
cargo,” he says, such as man-
aging ground services moving
pallet-loads and truckload volumes between distribution
centers. “But there is no question that if you look at the
pie, the traditional slice available to forwarders is shrinking,
going to full-service trucking, FedEx, or UPS or becoming
e-commerce traffic.”
And that pie may continue to shrink as Amazon absorbs
into its own domestic logistics and transportation network
more and more bulk cargo moving from vendors to distri-
bution centers as well as between DCs.
Even so, Imbriani emphasizes that as online commerce
continues to grow and technology takes over more and
more of the blocking and tackling of transportation management, Team Worldwide is keeping one key asset in
place—the human touch. “We believe it is vitally important to have experienced, trained people, using [the latest]
technologies to support service for the customer,” he says.
“Technology can improve data, and streamline process
and communication, but it doesn’t replace people—it complements their abilities,” Imbriani adds. “Their knowledge,
insight, and skill have to be at the forefront; that’s critical
to resolving problems quickly and providing customized
solutions.”
REWRITING THE PLAYBOOK
Pilot Freight Services’ Hill shares another perspective.
“Amazon is looking to potentially disintermediate all the
segments of their supply chain business,” he says. “So
instead of coming to a 3PL for the full-mile solution,
[they’re asking] ‘What if you just did the linehaul or final
mile?’”
