Broken Links: Challenges to connecting operators in the digital supply chain

The buzz around digitalization in the air cargo industry has grown increasingly louder as end-to-end visibility and efficiency in the supply chain become core to the industry’s function. But as IATA emphasized during the 16th World Cargo Symposium in Istanbul last month, it’s an area that is lacking in both modernization of digital tools and connectivity among the moving parts — and partners — in the shipping process. Only when ground handlers, shippers and carriers collaborate to utilize available technologies can the industry move forward with the efficiency it needs to thrive, Brendan Sullivan , global head of cargo at IATA said during the conference. “We need to move these [digitalization priorities] forward, even as the operating environment becomes more challenging,” Sullivan said. Major advancements have been made in digital booking tools used by forwarders and airlines in the past year, with companies highlighting ways these improved methods connect customers to forwarders in real time. Adoption of the electronic air waybill has been proven to reduce logistical errors in addition to literal paper trails. Prior to this implementation, more than 30 pieces of paper per shipment were generated in the process, enough to fill 80 Boeing 747s each year, per data from IATA. As of September 2020, more than 70% of carriers were using eAWBs, the organization reported. Among other improvements, innovative shipping containers are reducing spoilage of temperature-controlled goods. Swiss Airtainer , a Swiss unit loading device (ULD) startup that designs temperature-controlled ULDs, which are 40% lighter, also has 18 sensors for temperature mapping in its containers. Further, digital applications to manage perishables are providing invaluable data along the shipping process, including tracking and temperature monitoring, such as a feature developed by Brussels Airport as part of the hub’s tech innovations launched in 2021. Existing tech, lacking integration The technology has arrived, Freightos Chief Executive Zvi Schrieber told Air Cargo Next. But air cargo as an industry has not been able to use it until recently, something he learned as a customer. “I discovered — and was shocked to discover — as a customer, as a shipper, how old fashioned the industry is,” Schrieber said. Even as Freightos grows its global digital bookings from 668,000 to over 1 million this year, there are still airlines that do not have systems in place to use the technology, he added. [caption id="attachment_57136068" align="alignleft" width="241"] Credit: Can Stock[/caption] In 2018, very few carriers had a digital booking system, Schrieber said. Digitalization must continue to grow — and grow in a synchronous direction — and because the industry is a relationship business, there should be an emphasis on this when it comes to developing digital tools, he added. Connecting the dots The notion of connectivity among stakeholders is not novel, industry leaders agree. Connectivity as part of digital growth was a key talking point at WCS in Istanbul. “When I started two years ago, I noticed I came from an industry where you had to make sure you are connected,” Marcus Campbell , chief technology officer at Hermes Logistics Technologies , told Air Cargo Next. Campbell formerly worked as a technology leader for The Prince’s Trust before taking over at HLT, and led tech departments at Sony and Lloyd’s Register . Campbell said he regularly used tools like WhatsApp and SMS video conferencing to connect the shipper to the customer, especially during the pandemic. Without a connection between the customer and the services they are receiving, there’s no movement, he added. “The pandemic forced us to do those things. So, when I look at how the cargo industry looked when I started two years ago, I see some pretty big movements, pretty big changes,” Campbell said. “People are talking increasingly about ‘connecting the dots.’ They're talking about looking at newer pieces of technology to try and reduce that friction in the supply chain as well.” The supply chain tends to weaken when resources can’t be easily accessed, which is why tech is crucial in air cargo, especially economically, Campbell added. [caption id="attachment_48254" align="alignright" width="365"] Credit: Can Stock[/caption] “You've got economic factors at the moment which are driving the cost of moving a piece of cargo. So you need to look at digitizing, as much as possible, that supply chain to try to reduce those costs for your customers,” Campbell said. “Technology is definitely the way to go, particularly when it comes to resource constraints. A lot of businesses have suffered from the impact of not having enough resources to actually fulfill cargo requests from their customers. Again, this is where technology will come along, trying to automate some of those areas that normally a human resource will be doing.” All aboard ONE Record IATA developed the digital e-freight program ONE Record in 2018 as a standard for data sharing and targeted bringing 100% of IATA member carriers on board by 2026. The tool allows shipments to have a single record view, simplifying the process and giving visibility to each entity of the process, Sullivan said. Not only does a system like this encourage forward-thinking approaches to challenges because of the visibility it provides, it can connect a broken link in the supply chain, he added. “ONE Record aims to cover the end-to-end transportation chain, from the shipper to the consignee. Each party is able to share data of the shipment with relevant parties, ensuring enhanced visibility and transparency,” according to IATA’s official website. Lufthansa Cargo recently joined ONE Record in alignment with this goal. “Data is crucial to our industry’s success, but we have been hindered by outdated data formats and legacy infrastructure for too long,” said Ashwin Bhat , chief executive of Lufthansa Cargo said in a news release earlier this month. “ONE Record has the potential to revolutionize the way we share information. It opens the door for a fundamental production optimization based on high-quality data sharing.” Stumbling blocks By far, one of the most significant challenges facing industry operations is the slow rate at which logistics operators are integrating available technologies into their business. This is one reason connectivity is lacking, Lothar Moehle , executive director at Cargo IQ, an IATA interest group that sets and implements quality standards , told Air Cargo Next. “It’s the speed of implementation in a synchronous way by the air cargo stakeholders. I think that puts it all together in one sentence,” he said. [caption id="attachment_57136066" align="alignright" width="277"] Credit: CanStock[/caption] “The technology is available, whether you talk about artificial intelligence, whether you talked about barcode readers or QR codes …. What this industry is often lacking is that one part of the industry has implemented stuff and the others have not.” The biggest stumbling block, Moehle said, is that the new way of passing information often stops there. “I might have a lot of digital information,” he said. “And then somebody has to print it on paper so the next [entity] can read it.” Stakeholder commitment key The solution to streamlining the exchange of information among stakeholders is commitment, Moehle said. Everyone in the supply chain must commit to driving technology forward and get on board. “There has to be an agreed-upon deadline,” he said. “That's what we need for the industry to make bigger strides forward toward the future.” Collaboration and connectivity will lead to fewer logistical headaches, Sam Quintelier , cargo director at Brussels Airport said during the World Cargo Symposium last month. “If you see it from the perspective of a company that has to grant engagement or as a forwarder or as a customer agent, try to see that you can join forces, because your competitors of all levels, you all have the same goal and the same possible benefit,” Quintelier said. “And even if your process is a little bit better or you think you have an advantage — you don’t know what you can do when you all come together. So yeah, collaborate, please.”

Broken Links: Challenges to connecting operators in the digital supply chain

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