StarBroker Brings in the Cargo

StarBroker acts as the in-house carrier of DHL Global Forwarding. Its buying power can act as a major decision maker for airlines to bring their freighters to a specific airport. Ethiopian Cargo’s move from Brussels Airport to Maastricht has proven to be an important example.

Peter Karreman: VP Europe of StarBroker  -  pictures: MS
Peter Karreman: VP Europe of StarBroker - pictures: MS

StarBroker’s VP Europe Peter Karreman has his office in the premises of DHL GF at Brussels Airport. “Not at DHL Express. We’re distant cousins,” he says. StarBroker is a separate legal entity of the HQ in Basel where it was founded in 2003 at the old Danzas AEI HQ and today still has its accounting department. Brussels is the main hub in Europe, with sub-hubs in Amsterdam and Frankfurt.

DHL GF is StarBroker’s only customer. The subsidiary’s business consists of centrally buying air cargo capacity for the DHL GF customers. Peter wants to point out that his company is not to be confused with DHL Aviation ACS, another neutral company under the DP banner that markets empty space on DHL Aviation aircraft.

Martinair and others
Of course, DHL Aviation is among the companies StarBroker buys from. “Don’t forget that at the time of StarBroker’s inception, Brussels was still the main hub of DHL Aviation for Europe. The load factor on certain flights was only 70%, so Deutsche Post thought it wise to promote this spare capacity within Global Forwarding.” He went on to say: “We are a large customer of ACS. We purchase blocked space.” Peter: “Our collaboration started in 2003 on Kalitta flights to New York, who we today still use daily between Brussels and Cincinnati.”

After one year of operation, StarBroker found that its business exceeded the DHL Aviation capacity offered, so Martinair and ‘the late’ Cargo B were called in. “Typical for StarBroker is that, when compared to Panalpina, we do not wet-lease aircraft for 2 years flying in our own livery,” Peter remarks. “We are non-asset oriented. We just want to work with the right partners, who give us minimum 20 to 50 tonnes blocked space per flight.”

That is where KLM came in, as well as Ethiopian Cargo and Yangtze River Express. As for the latter, their aircraft are fully chartered 5 days a week. The Chinese carrier operates from Brussels as a scheduled charter. “This is more or less the same concept we use with ET,” Peter says. “The problem is that ET has to apply for a renewal of traffic rights with the aviation authority for charters every month. Eventually, this has turned out to be impossible for both ET Cargo and StarBroker.

TNT Airways’ veto
Peter admits that what has bothered him most that ET had to beg for a renewal every month and had to wait until the very last day of the month for the appeal to be approved. “I cannot do business this way. On top of that, other cargo carriers with a Belgian AOC have a say in this procedure, provided that they are able to operate the same flight under the same conditions. This procedure is hardly respected. Unfortunately, the only Belgian cargo operator is TNT Airways.”

The new bilateral agreement between Belgium and Ethiopia forbids ET to operate direct to Dubai, Hong Kong and Shanghai. These were precisely the airports served by the ET flights ex Brussels. Peter was anxious to have these destinations offered ex Brussels, but eventually he found himself blocked by TNT Airways’ veto in BATA.

“Not because TNT Airways had the spare capacity on their existing flights, but because they thought they could fly this cargo themselves. I would like to make this clear once again: in our concept there was no conflict whatsoever between TNT Express and DHL Express! The crux of the matter is that TNT Airways is not only operator for TNT Express, but also just another operator that ‘abuses’ its AOC to force airlines flying from LGG to use TNT fleet. “Airlines that wish to operate from Liege better accept to lease TNT aircraft to prevent traffic rights objection. ET had no need for TNT metal, they have their own.”

No DHL cargo on TNT aircraft
TNT Airways has never transported StarBroker cargo and it is not hard to understand that there is no way StarBroker will put DHL GF consignments on a TNT aircraft. Even if TNT Airways were sold to a Belgian owner after the FedEx merger, that would change nothing to the whole situation, Peter feels. “It is good to create some sort of protection, provided it is not abused.”

DHL GF’s headquarters at Brussels Airport
DHL GF’s headquarters at Brussels Airport

There is, as is always the case in Belgium, also a political implication, he feels.  “Walloon politicians are being misled and the LGG airport management is playing along. They want to pamper TNT Airways, forgetting that ET is or rather was their second largest customer.”

The initial solution of Transport Minister Isabelle Galant looking at the big picture, overruling the aviation authority and authorising herself the Brussels flights on a month-by-month basis was the best way to proceed, says Peter. “The eventual refusal to continue this is, in my opinion, violating the European policy of creating liberal competition.”

On top of this, about 85% of the cargo flown from Brussels and now from Maastricht was trucked in from abroad. Peter: “Previously it was flown by Martinair on their B747 service from Amsterdam to Dubai and Hong Kong. In April 2015 this service was discontinued by KLM, so we had to find another solution. We were already working with ET ex Brussels to Dubai and Hong Kong, without anyone having a problem with it. But there was this stop-over at Addis Ababa, which was time and money consuming and which we wanted to get rid of.” Eliminating this technical stop and operate direct would create many opportunities for Brussels.

Losing kilograms
Peter points out that the relocation of ET to Maastricht has not only cost Brussels existing kilograms, but will also prevent additional tonnage coming in. “I am a great fan of Brussels Airport. This is an airport which still has space for growth to destinations such as South Africa and Latin America. Both Frankfurt and Amsterdam are nearing their saturation point. That was the main reason for ET to come to Brussels. On top of this, we are creating jobs for low skilled workers, the most vulnerable group. Jobs, jobs, jobs!”

“We bring in a positive picture in terms of added value, both in the pricing and capacity. We create flexibility and guarantee carriers steady flows of cargo. We optimise the existing capacity.”

From Brussels to the rest of the world
Rounding up, Peter Karreman thinks that there still are a lot of opportunities for Brussels Airport to be seized. “China, South Africa, South America and the Middle East are important destinations for high-value products, perishables and pharma. Forget general cargo. If I have to set up a network for general cargo only, I will have to compete with about everybody. I see opportunities to set up lines from Brussels to any major destination in the world. We can control this capacity; we can make the aircraft fly when we need it and where we need it. This is what makes us different from other forwarders.”

Brussels offers all the facilities and the mentality to turn this into a huge success. It has made a choice for perishables and pharma. ET takes a lot of perishables northbound but it needs support to market southbound, and this is where DHL StarBroker comes in. The only possible negative point for Brussels is its night curfew, although most other major airports have the same restrictions. Many carriers in Brussels have found a way around this.”

But Peter has not given up on Brussels yet. “In this case, however, I fear that the longer it takes to come to a final solution, the more difficult it will become. I can imagine that Maastricht, too, will want to invest on as continuity base, and they are doing pretty well.”

Marcel Schoeters in Brussels

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