Consultant Insight: Technology adoption now a requirement for the air cargo market

[caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] Technology projects are speeding up at a variety of businesses as many look to take advantage of the rise in e-commerce demand. From the first mile to the last mile, these projects are ushering in a digital era in which there is no distinction between B2C and B2B, with the end result being a seamless supply chain journey ending at a consumer’s home, distribution center, manufacturing facility or elsewhere. To connect the supply chain dots, transportation providers have invested in technology to track, book and manage shipments. However, the airline industry, especially on the cargo side, has always been viewed as a lagging behind other modes of transportation in this, despite attempts by various industry organizations to establish guidelines, assistance and certifications. However, COVID-19 appears to be breaking down whatever resistance the airfreight market has had toward technology adoption as we now are finally seeing a much-anticipated rise in related announcements. Online platforms and marketplaces have proliferated the supply chain as tracking, booking and managing shipments become increasingly automated. According to online booking platform cargo.one, the marketplace saw the number of air cargo search requests by freight forwarders quadruple from January to June as forwarders and shippers looked for available air capacity. Currently cargo.one has 12 airlines signed up to use the platform to book freight shipments, including Lufthansa, All Nippon Airways, Finnair, Etihad, AirBridgeCargo and TAP Air Portugal. It also has 1,500 freight-forwarding offices signed up. Cargo.one recently closed an $18.6 million Series A round of funding led by Index Ventures that includes prior investors such as Lufthansa Cargo. Funding will go toward expanding the business in Europe, North America and Asia. Freightos’ Webcargo has also seen an increase in demand since the beginning of COVID-19. According to the company, bookings on the platform were seven times higher in February 2020 than February 2019 and three times higher in July 2020 than July 2019. Indeed, the benefits of such platforms and marketplaces as Webcargo — like reducing booking time to five minutes from two to three hours — were highlighted in a video interview with a forwarder. Beyond online platforms and marketplaces, technology investments are being made elsewhere within the airfreight market. Ground handler dnata this week announced plans to use Descartes’ Core Bluetooth Low Energy readers across its global cargo operations to support the tracking of international mail, parcel and cargo shipments. The readers will assist dnata in helping its air partners, including air carriers, to track single unit load device (ULD) containers or pallets in air or on the ground. In addition to ULD location, temperature, movement and humidity can also be monitored. The dnata readers not only monitor shipments but are proving useful for reducing loss, matching capacity with ULD inventory and reducing costs associated with misplaced equipment or requirements to lease additional ULDs. Indeed, going digital not only saves time but increases the visibility and management of shipments. But the biggest benefit of all is probably the data captured. Analysis of transactional data, as noted in dnata’s announcement, provides efficiency and cost improvements, and improves strategic goal planning and product development. As passenger airlines and air cargo providers align capacity to demand in our rapidly changing environment, technology investments will increase. However, because of COVID-19 and other pains inflicted on today’s air market, implementation must be made quickly and intelligently to realize the benefits and help the industry survive in this difficult market.

Consultant Insight: Technology adoption now a requirement for the air cargo market

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