ELEVATE 16: Innovation in Air Freight Logistics

MIAMI – This year, Cargo Facts’ sister publication Air Cargo World held the inaugural edition of ELEVATE, a conference held in conjunction with the Cargo Facts Symposium, and dedicated to innovation within the airfreight industry. Two reoccurring themes were disappointment at the industry’s overall contentment with pursuing the status quo, but also hope that perhaps the industry has reached an inflection point. New innovations, and disruptive technologies offer the potential to revolutionize every step in the supply-chain.

JJ Hornblass, the CEO of Cargo Facts, opened the conference by arguing that 2016 will go down as “Year one” for airfreight innovation. “If you take a look at Angel List, which is a directory of current startups, there are about 1,800 startups listed there that relate to logistics innovation — this includes companies that were launched just this month, such as Spedity, which offers what it calls “smart collaborative logistics,” or Blik, a purveyor of real-time data for production and logistics, or Shipeala, which pitches itself as “Uber for delivery.”

Hornblass continued, “all this action on the startup front is taking place in parallel to a realization among traditional corporate enterprises that ‘innovation’ must be included in their strategic vernacular. In other words, there is an acceptance that displacing established market-leading firms is a possibility now that disruptive innovation has come to the airfreight logistics.”

During the event’s first panel discussion, “the Rise of Air Cargo Innovation”, panelists agreed that the flatness of the air cargo industry is finally starting to gain dimensionality. No longer will supply chain events continue in isolation from one another, instead, increased data exchanges, and collaboration among stakeholders will open up many avenues for process improvements. The emergence of UAVs in the commercial space is likely to be another major characteristic of future air cargo transport some panelists argued, especially as regulations and technology begin to align with commercial applications.

Dirk Schusdziaria, SVP Cargo at Fraport AG, said that for Frankfurt, one of the world’s largest cargo airports, “innovation is much more important than it was in the past, it’s part of our daily business. It’s very important to initiate the change to reach competitive advantage.” As an entity that serves as an ecosystem for a wide variety of supply-chain stakeholders, Schuzdziaria said Fraport’s airports were re-imagining both technical and organizational processes to help make air cargo more competitive with other modes of transportation.

One such development has been Frankfurt Airport’s “AIR@ Link” cargo community system which facilitates seamless data capture and exchange among stakeholders. A recent addition to the platform was a license-plate-recognition tool that can monitor incoming truck arrivals, link them to deliveries, and notify relevant stakeholders instantaneously. The success of such a system relies on not only the openness and willingness of stakeholders to participate and share data, but also on the host organization’s (in this case, an airport) cohesive understanding of the operational processes of all stakeholders involved. “Nothing works if the organization does not follow.”

Moving forward, Schuzdziaria and fellow panelist, Joe Napoli, Chief of Staff at Miami Airport, agreed that application programming interfaces (APIs) were likely well off in the future for airports. But in the meantime, community platforms will continue to play a significant role in facilitating data exchanges and adding efficiencies to the supply-chain. Such platforms, Schuzdziaria said, are just starting to bring the shipper into the conversation.

Even though both airports longed for a paperless world, they reiterated that there were factors beyond their control inhibiting their ability to make data exchanges purely electronic on all fronts. Schuzdziaria gave the example of customs clearance documents which in many countries still require original copies. He questioned, “how can we get certified digital copies to satisfy customs?”

Also addressing the topic of airport innovation, Mark Thorpe, Chief Development Officer, Ontario International Airport, spoke on a panel dedicated to advanced route development strategies. Thorpe described a few achievable, and cost-effective strategies airports can adopt to make their cargo divisions more innovative. He shares them here:

Moving from airports to carriers, Monika Wiederhold, vice president of product management and innovation at Lufthansa Cargo joined Hornblass on the stage for a lively Fireside Chat. During the interview she encouraged innovators “to ignore the immediate legal and logistical hurdles”, and rather concentrate on “securing the future.” Wiederhold explained that innovation was a vital function that Lufthansa Cargo had “neglected for a while,” but was now being integrated into the fabric of the organization.

In the future, Wiederhold said, Lufthansa Cargo will introduce an API that would connect all actors along the shipment chain. With the product launching in as little as 12 months, Lufthansa is at the forefront of the air cargo industry in implementing technology that could facilitate seamless communication, and reduce pricing inaccuracies dramatically.

API technology is already prevalent in most other sectors, and the implementation by Lufthansa is sure to garner attention, and lead other carriers to follow suit, she added.

Lufthansa is what Wiederhold termed a “legacy organization,” which, given its established position in the market, required an exceptional push to innovate, whereas innovation is in the DNA of startups and smaller, more agile companies. Nonetheless, she insisted, the drive to change was largely market-driven. “The industry is becoming more and more commoditized. Either you play off commodity markets, or you differentiate,” she explained.

To this end, Lufthansa has established a separate department dedicated to innovation, while also partnering with RocketSpace, a startup accelerator that has pushed new companies into the aviation sector with great success.

For more on elevate, see Air Cargo World’s comprehensive coverage at aircargoworld.com.



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