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Digitization – Key Lever For Development Of Innovative Solutions

The digital revolution of air cargo industry includes the use of disruptive technologies that are changing the global business landscape. IoT, wireless technologies (sensors and data loggers), blockchain and artificial intelligence are the technologies in trend which aim to bring the much-needed transformation in the industry.

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Digital wave has been creating a new value proposition in every industry and customers’ rising expectations for a personalized, on-demand and mobile service, needs to be met efficiently too. Currently, the limited pricing transparency, the lack of visibility over the localization and the status of goods transported does not match up to the increased customer demands. 

Current Scenario And Opportunities In Air Cargo Ecosystem

There have been a number of factors that are combined to create an optimistic yet challenging environment for the air cargo industry. Major reason is the augmented growth of global e-commerce that has left a deep and lasting impression on the sector. Air cargo has experienced resurrection in the last few years because of the steep rise in international e-commerce along with the increased consumer expectations and lowered oil prices. 

Moreover, airfreight has become even more competitive against other modes of transportation in recent years. According to the International Air Transport Association (IATA), airfreight demand is at its highest level since May 2018. 

While this increase was driven largely by an expectedly busy Q4, 35 per cent of all global trade by value is moved via airfreight daily. According to the IATA predictions, the global airline industry will end 2019 with its tenth year of profitability. Despite impressive gains witnessed by the industry due to favourable circumstances, sustained performance and an optimistic economic outlook, it is set to face challenges in the times ahead. There is a constant need felt by the players to embrace industry-wide digitalization in order to continue to serve better. 

Even today, the industry largely depends on paper-based processes to exchange the shipment related information along the complex supply chain. The lack of data integration and standardization is prone to poor data quality and high chances of error. Further, it limits the end-to-end visibility and anticipation along the entire shipment journey, which may result in exposing to an unexpected occurrence, bringing inefficiencies to the supply chain system. Further, there is a difficulty in optimization of cargo capacity utilization that needs to be addressed. 

Digitization Is The Key

The digital revolution of air cargo industry includes the use of disruptive technologies that are changing the global business landscape. IoT, wireless technologies (sensors and data loggers), blockchain and artificial intelligence are the technologies in trend which aim to bring the much-needed transformation in the industry. Hence, IATA is also working with its strategic partners and industry players to explore all the possible technological opportunities to be able to develop appropriate guidelines, mechanisms and standards when required. 

Adoption of digitization is crucial to oversee the process and ensure that goods arrive at each point on the way. Further, API has an important role to play ineffective management of the supply chain for the cargo ecosystem. It includes a step-wise process like purchase orders, prices, quantities, etc. The goal here is to minimize the amount of human interaction along the way and enable the seamless flow of information from one end to another. 

Air cargo carriers need a digitally enabled air cargo ecosystem to allow industry players to drive intelligence, predictability, preparedness and value across the supply chain. The industry can successfully capture the opportunities in the system like driverless aircraft and augmented reality. The move to an intelligent digital ecosystem is imperative to the air cargo industry. Successful carriers are willing to combine their offerings with digital superiority and create new ways to deliver value to customers and have that competitive edge over other competitors. 

Innovative Solutions Driving Efficiencies 

The potential behind the mentioned digital opportunities is set to be translated into new services with added value for the customer, operational excellence, incremental revenues and improved links with the various stakeholders. It will also help in managing mobility via an open platform that will foster innovation and interoperability. The most important of all is that all air cargo stakeholders follow a common goal of reaffirming the competitiveness of air transport compared to alternative modes of freight transportation that are more advanced in their digital transformation. 

The industry can work on improved efficiency and capacity by streamlining the management process, further allowing them for increased capacity of aircraft and warehouse storage facilities. Digital enablement will help innovate in the services offered, like guaranteed delivery and other premium options (with better transparency and predictability).  The use of advanced data analytics can also lead to timely identification of and stop potential delays and other issues in the supply chain with, ensuring greater customer satisfaction. 

Conclusion 

While it is evident that in today’s given circumstances it is definitely not the simplest of tasks to do away with the existing processes and systems, however, the time seems to be ripe for aggressive digital transformations and the ones that equip themselves to thrive on digitally-enabled capabilities will rise quickly to heights. It is hence of utmost importance that air cargo service providers critically assess their current IT capabilities and invest in and work on building an effective roadmap to be well equipped in time for such industry revolutions. 

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Nipun Anand

The author is Director, Zeal Global Group

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