FRANKFURT – In a first for a roundtable panel discussion at a Cargo Facts event, a senior executive from an all-cargo carrier participated in a frank discussion with innovative startups and other air cargo stakeholders about the air cargo industry’s need to advance digitalization initiatives. The result? Though past efforts to abandon analog practices and explore alternative methods for booking cargo capacity may have failed to gain traction, Amazon and other market entrants are proving that digital booking platforms are here to stay – even if on a limited basis.
The general consensus of the panel, titled “Breaking Barriers to Airfreight Through Global Collaboration,” was that engagement with digital booking platforms will likely soon make sense even for all-cargo carriers. Referring to himself as an “old-fashioned guy,” Wolfgang Meier, president of Silk Way West Airlines, admitted that his airline – like most all-cargo carriers – is, and for the foreseeable future, would remain a forwarder’s airline. Even so, Meier did not expect the “analog dynamic” in which forwarders and carriers interact on a regional basis to come to terms with overcapacity and that rates would last forever. At least not for all commodities.
Panelists agreed that general cargo, which makes up 70-80% of air cargo flown, is the easiest target for such booking platforms – if the terms are amenable to both the carrier and the forwarder. Moritz Claussen, co-founder and managing director of cargo.one, a platform that enables cargo carriers to display real-time capacity and pricing to forwarders, said that, from a technology standpoint, even express and specialty cargo products are candidates for the platform, as long as the physical movements on the ground are executed accordingly.
While perhaps true, most all-cargo carriers would probably require a higher degree of sophistication from the platforms before jumping on, said Meier. At present, making limited capacity available – as a supplement to existing forwarder contracts – is not visibly easy. Additionally, digital platforms have not yet offered a viable solution for building up consolidations as that is still very much a physical service provided by the forwarder.
Another concern of adding a new partner to the air cargo supply chain is the flow and control of data. As Roland Weil phrased it, “Sometimes I feel like freight forwarding, carriers, and data-sharing are like natural enemies.” He added, however, that airport companies are work together more often via the concept of “cargo communities,” showing that there is a huge benefit for a variety of services – trucking, forwarding, customs, perishables, valuables, etc. – in looking beyond their competitive nature to find solutions.
Panelists agreed that the principle of the data still remains as the property of the owner, but in order to reduce excess overhead on the ground, it is necessary to share more data with other partners downstream. Even for large companies, there comes a point at which issues can only be addressed jointly. It is important to recognize the limitations of a single entity’s reach, and pursue collaboration in areas where the company cannot solve an issue on its own, said Jean Verheyen, founder and CEO of Nallian.
Verheyen also praised the concept of cargo communities and initiatives such as pharma.aero for their emphasis on growing together and solving common problems in a non-competitive environment. In most cases, supply chain stakeholders “need each other” in order to streamline their processes. These companies share “just enough” data that is not commercially sensitive and can equally leverage “small successes” into larger ones as they gain confidence.
Although slot allocation remains a challenge for busy airports, Wiel noted that Frankfurt has been successful in its attempts to mitigate slot deficiencies through the use of technology. A new analytical tool introduced by the airport identifies slots, and matches carriers with vacant slots. He also cited “a lack in creativity” in the industry when it comes to finding the right slots for an airline at the right time.
Creative solutions have their limits, however. Referring to recent slot issues at Amsterdam (AMS) and Moscow (SVO), Meier said that an airline like Silk Way West Airlines, which operates seventeen 747Fs across multiple AOCs, could not always meet its slot needs without political clout. As a result, SWW migrated much if its operations in Western Europe to Hahn Airport (HHN) where slots are not scarce, and there are few restrictions.