Cargo Chat: Geodis’ Bach Larsen on the impact of Ukraine-Russia war, digitization

Flexibility and agility are key as freight forwarders continue to navigate such global disruptions as backlog and congestion in the Asia-Pacific due to COVID-19 restrictions and the impact of Russian sanctions on airfreight routes amid the war in Ukraine. Logistics companies, in turn, are reevaluating their networks, partnerships and processes to optimize operations in order to combat global challenges that face the airfreight industry. France-based logistics provider Geodis is one of the many forwarders actively bolstering its operational footprint and strengthening its processes through digitization to better prepare for supply chain disruptions and capacity constraints. [caption id="attachment_57065437" align="alignright" width="235"] Rene Bach Larsen, Managing Director of Freight Forwarding, North America, Geodis (Photo/Geodis)[/caption] Geodis in January expanded its MyParcel direct-to-customer e-commerce delivery service into Canada and partnered with AirAsia X to expand its AirDirect fixed schedule network to increase intra-Asia connectivity. The company in February broke ground on a new 4,500-square-meter facility at Brisbane Airport (BNE) in Australia, which is expected to be operational by the second half of 2022. In March, Geodis received Good Distribution Practice (GDP) certifications at its Shanghai facility and continued to tap into the global e-commerce surge by acquiring Singapore-based forwarder Keppel Logistics . Air Cargo World spoke with Rene Bach Larsen, managing director of freight forwarding in North America at Geodis, to learn more about how the logistics provider is navigating disruptions caused by the war in Ukraine and how it is utilizing digitization to strengthen and increase operational efficiency. Air Cargo World : How have recent supply chain challenges affected airfreight in the Americas region? Rene Bach Larsen : Today, the biggest challenge we are grappling with as an industry is the ongoing conflict in Ukraine and its subsequent impact on aircraft availability and fuel prices. The Ukraine crisis has exacerbated existing air cargo capacity challenges as we navigate new airspace restrictions and increased flight times due to rerouted flights . The conflict in Ukraine has also contributed to rising oil prices , which we were already experiencing prior due to strong consumer demand as COVID-19 restrictions have begun to lift. With today’s challenges, we anticipate airfreight capacity will likely begin recovering in 2023 . ACW : How is Geodis leveraging opportunities amid this challenging airfreight environment? RBL : In the past, we relied on commercial airlines to transport our cargo. In response to limited air freight capacity, Geodis recently launched its first air freighter in 2021 . We have leased the aircraft for several years and have integrated it into the Geodis AirDirect global schedule. The GEODIS air freighter, which had its inaugural flight in September, operates between Amsterdam (AMS), London (LHR) and Chicago (ORD) three times per week along with two weekly rotations between AMS and Zhengzhou (CGO). While we expanded AirDirect as a result of tightened capacity during the pandemic, this is a strategic, long-term investment for Geodis. ACW : How is Geodis utilizing technology to combat today’s industry challenges? RBL : We expect today’s challenges with infrastructure, capacity and resources to last for the foreseeable future, and we are actively taking measures to ease those pain points on behalf of our customers. In the U.S. market, we need a strong focus on digitalization to help combat some of these challenges — which have only been exacerbated by current labor shortages. We are continually focused on automating and digitizing our processes that are both customer-facing and internal to optimize future success. For example, Intelligent Real-time Information System (IRIS) is our freight management application that allows customers to have full control over their shipments. This platform offers end-to-end visibility, increased communication, streamlined logistics processes, data-driven decision-making and increased efficiencies. Additionally, we are continuing to invest in the Geodis Quotation Tool, which offers instant shipment prices for air and ocean freight, capacity planning resources and artificial intelligence to support our freight forwarding services. ACW : Looking forward, what are some of the company’s goals for 2022? RBL : O ne of our major goals for airfreight in the Americas region is to continue building and managing fixed capacities independently. Today, we are now managing a significant amount of operations in-house that we used to outsource to commercial airlines. We will continue to invest in the knowledge and resources to optimize the new capacity we have generated through our Own Controlled Network.

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