Cargo Chat: Digitalization, e-commerce key to 2024 for Unique Logistics

Global logistics firm and freight forwarder Unique Logistics International expects the airfreight market to continue to normalize as 2024 gets underway. Founded in 1983 in Hong Kong, the ocean and air shipping company saw its net income grow 134% year over year in the first half of 2023, despite a volatile market and flat rates . [caption id="attachment_57139720" align="alignright" width="278"] Oscar Marc Schlossberg[/caption] While these challenges may continue in the first quarter of the year, Executive Vice President Oscar Marc Schlossberg said Unique will continue to integrate its digital booking platform and monitor e-commerce’s growth out of Asia. Schlossberg sat down with Air Cargo Next to discuss the future of AI, how the market will adapt in 2024 and whether the industry will keep pace with new technologies. What follows is an edited version of that conversation. Air Cargo Next : As industry leaders refer to a normalizing market in 2023, what does this mean for airfreight in 2024? Oscar Marc Schlossberg : I think the market was returning to a sense of normalcy in the idea that the buying patterns were returning to normal, that inventory levels were returning to normal, that the cycles were returning to normal, that the airlines and steamship lines were returning to normal, the schedules, the routing. If you go back to the period last year around this time, we were all going out to procure for airfreight capacity and the airlines didn’t know where they were running yet. Passengers are back in place [in 2024]. ... The inventory overhang from 2022 was still crashing airfreight last year. That wasn’t the case going into 2024. ... No doubt about the expectations of what 2024 is going to be. However, there were developments coming out of the pandemic which definitely altered the landscape. Air Cargo Next : What is a major trend in airfreight you noticed in 2023 that will continue in 2024? OMS : Probably the biggest one — and this is one that I’ve been harping on internally for nine months now — is e-commerce . The rise of [Singapore-based e-commerce retailer] Shein continues. The impact they’ve had on the global airfreight landscape, how they are impacting the traditional brick-and-mortar retailers [is significant]. When you looked at pricing patterns from Asia, every single one of the markets except Hong Kong and China pretty much collapsed in the first half of last year. And that’s kind of what led me to understand what was going on. Why weren’t Hong Kong and China collapsing with the rest of them after the pandemic? And it was because of Shein and Temu and their capacity. And looking at what happened with them in the past 90 days prior to Jan. 1, their demands exceeded 10,000 tonnes per day, which is a mind-boggling statistic. Air Cargo Next : How is the situation with Houthi rebels attacking ships in the Red Sea and Suez Canal affecting airfreight? OMS : Right now, [such a determination is] a little bit premature. For the most part, it’s not been a rushed effort yet because of the timing of when this occurred. It occurred after the holiday shopping season. I think that based on the conversations I’ve had with retailers and manufacturers and different manufacturing supply chains, we may see a little bit more of that now that people struggling to come back from the holidays are starting to assess their inventory needs. I think that’s when we’re going to start to see a little bit more of a surge coming. Yes, some retailers have flipped ocean to air, particularly those that ordered very strong holiday sales, some of them that are our customers. [Those turning to airfreight include people shipping] goods from India, Bangladesh and Pakistan that have to go via the Suez to the U.S. East Coast, [and] people that are shipping into Europe through the Suez, particularly going to northern Europe and using Rotterdam as a gateway. Manufacturing industries, people that are manufacturing automotive, high tech, electronics and appliances where they need a widget, a chip, a hose, an assembly part that is coming from China or Vietnam or Thailand that — guess what, it was on that boat — they’re now short. They have a choice: lines down at the factory or they just slide 10,000 units in that case. We’re beginning to see a little bit more of that. We're seeing quite a bit more of it to Europe. Air Cargo Next : How is the industry doing in terms of technology? Are we still playing catch up compared with other industries? OMS : I think airfreight is probably one of the more opaque industries in terms of digitization and transparency. And sadly, it probably is one of the [industries] that can benefit the most from it. But there are too many handshakes and deals outside of what’s transparent. Many of the ways that it operates building consolidations are very hard to digitize. If I'm mixing density cargo and volumetric cargo together, how do you put that into a model online? It is advancing slowly. Various platforms have moved forward; it’s more than it was. More airlines are putting their capacity availability online. It’s still too cumbersome. It’s not as efficient as it needs to be. So, these are still hurdles to be overcome from the technology standpoint. I’m always impressed by how much AI can do . It blows me away. It’s an area that I think Unique needs to spend a little more time and energy focused on; we have not invested very much in it. I do believe when I look at, say, Delta Air Lines , for example, what they’re able to do with their AI for customer service, we can probably benefit from it. We have our end-to-end visibility tool, which will allow people to track and trace their product from booking all the way through to delivery. It allows us to price online status updates. It’s rolling out customer by customer [but] there are still some integration problems.

Cargo Chat: Digitalization, e-commerce key to 2024 for Unique Logistics

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