Air cargo ready for digital revolution

Industry leaders are moving towards robotics and automation as technology seems to be the only surviving strategy to move ahead and achieve growth. Worldwide, many SaaS tech service providers and startups have emerged in the last few years providing transparency in supply chains, say sector experts.

Ritika Arora Bhola

The ongoing pandemic has in a way accelerated the opportunities in innovation and digitalisation of air cargo sector. Air freight handlers worldwide are thrilled with the recent tech innovations — Robotics, Automation, Data Science, Blockchain, AI, IoT and drones being used for carrying out business operations efficiently — inside the carriers, warehouses, on the ground level, for loading and unloading. The stakeholders are readily deploying technology as it is believed to bring in supply chain consistency, adherence and accurate performance as demanded by the customers nowadays.

Acknowledging the same, Jean Verheyen, CEO, Nallian said, “Automation using technology is being done by the integrators, e-Commerce, and distribution players. To achieve an efficient and reliable supply chain we should not only use technology to optimise an organisation, but also facilitate, coordinate and generate visibility in cross-company processes. The different actors in the supply chain should be able to work on a single version of the truth, which requires sharing, re-using, and enriching data throughout a shipment’s journey.”

Agreeing, Rory Fidler, Vice President Cargo Technology at Menzies Aviation said, “With new and developing technologies, there is an opportunity for the sector to boost efficiency, accuracy and compliance. The pandemic has accelerated the adoption of these technologies, and it is encouraging to see that the United Nations  International Civil Aviation Organization and the United Nations Economic Commission for Europe have recently completed new digital air cargo technical specifications guidance to accelerate transition towards safer and more resilient supply chains. However, there is a long way to go for the widespread deployment of digital solutions, which increase cooperation and communication between customers, suppliers and partners, allowing for speedy action to resolve disruptions.”

Narayanankutty Karayangal, Senior Director, Airfreight, DHL Global Forwarding said, “Technology has entrenched the air cargo industry. The physical act of moving goods from one point to another is supported by backend technology. For example, cloud computing to store and share, data, documents and SOPs across various stakeholders in different continents have come to play and eliminated the need for hard copy documentation. Applications are available to transmit shipment details from the shippers invoice generation module to a forwarders platform to create necessary transportation and customs documentation. Today tools can simply scan the shipment details from the shippers’ location and transmit it to the forwarders’ application enabling this information to be available at the consignees’ location in less than an hour.  These technologies have changed the way exceptions are handled, while improving the reliability and operating efficiency of air freight. Hence, it is only natural for technology and robotic practices to take over tasks that are done repeatedly, leading to accuracy, reduced costs and eliminate wastage to improve productivity.”

Understanding and adopting tech

Amidst the pandemic, technology has opened new doors of optimism, innovation and assurance for the air cargo sector. Industry leaders are moving towards robotics and automation, as technology seems to be the only surviving strategy to move ahead and achieve growth. Worldwide, many SaaS tech service providers and startups have emerged in the last few years, providing excellent services to airlines, airports, ground handlers and others assisting in creating end-to-end visibility, accuracy and transparency in supply chains.

“We see a growing interest from ground handlers to digitalize processes with solutions that are fast and easy to implement. Companies need access to business and operational forecast data for smoothening their own activities. Cross-company optimization initiatives driven by the airport, as part of an airport community system, can leverage these tech investments further. The more digitisation becomes the norm and paper-based processes are eliminated, the leaner and more predictable the processes will become and more attractive will the industry become for younger talent. However, in such cases, things might move a bit slower: On the one hand, the airports hesitate where to start, while on the other hand, moving a community as a whole, tends to take a longer time as it involves coordination, trust-building, and change management,” observed Polmans.

Fidler reiterated, “Despite the proven benefits of many digital solutions, the cargo handling industry has been slow to move away from paper-based and manual systems highlighting that the main barrier to adoption is mindset.”

“The pandemic put cargo in the spotlight and demonstrated the critical role of technology in overcoming disruption and adapting to the crisis. Despite this, there is the hesitation within the industry to implement newer solutions.  Indeed, a few customers need convincing about the potential of new systems, in particularly those which require data sharing, given perceived commercial risks. The ultimate driver of adoption will be cooperation between airports, suppliers, and handers, and with knowledge sharing and collaboration comes efficiency and speedier problem resolution,” he added.

With a different perspective, Karayangal asserted, “Everyone has a tool, software, and an understanding of what technology can do for them. We could achieve more if the stakeholders exhibit adaptability and a willingness to modify the processes. Although the government has stipulated the use of electronic invoices, there are reservations in adapting to it. Similarly, several roadblocks arise while integrating systems. Clearing them and moving ahead with consensus is what will speed up the digitalisation process.”

Being tech ready

Inadequate infrastructure, high cost, no-one-size-fits-all approach, lack of awareness, and unskilled manpower are a few major issues restricting stakeholders from deploying technology, especially in a fragmented market such as India. Resolving these obstacles has become a key priority in the New Normal. Essential steps have been taken up by the private and government authorities to address these issues in an appropriate way.

Polmans said, “One of the biggest hurdles we see when it comes to digitalisation on a community-level such as implementing a Cargo Cloud is that often there is a lot of uncertainty about where to start. The main hurdle is not the technology itself rather it is not being able to identify the particular business that it will be easiest to implement and yield the most benefits. To do so, it requires a step-by-step approach, and a solid framework.”

Fidler said, “The current capacity is limiting change and investment, especially as there is a certain level of training required to oversee the operation and maintenance of new technologies. Secondly, data protectionism needs to be addressed to ensure that information about all stages of the shipping process can be shared by operators. Finally, technology has often has been seen as an area of potential cost cutting and not of investment. Recruitment of professionals with IT acumen has historically been challenging which makes it crucial that handlers look to take advantage of new technologies and invest in training and upskilling. Utilizing robots or setting up a centralized control centre will relieve some pressure on the staff, allowing them to focus on other priorities. This makes the cargo industry attractive to younger generation who deal with technology in their day by day lives.”

Karayangal affirmed, “The industry has the required competencies, expertise and, attitude to adapt to the changing technology. It is a challenge for any organization to bring coherence between thought, feel and deed, with several stakeholders. The solution perhaps is standardization. This will bring in economies of scale, reduce
cost and improve efficiency to collaborate for a solution. Towards this, airports, airlines, warehouses, ground handlers, transporters, buyers, sellers, banking institutions, regulatory agencies, all have to collaborate and understand the process along with the customer requirement.”

Vision 2022 & beyond

The year 2022 promises to the bring growth and positivity for the air cargo industry. With the air cargo stakeholders embracing digitalisation, robots and automation taking over manual operations — it seems that the cargo sector is ready to witness evolution in the years to come.

Industrial collaborations, sustainability, and paperless transactions will become key priorities. Digital capabilities are expected to fuel growth, boost supply chain resiliency, and enhance overall operational efficiency. At the same time, Polmans said, “Our vision is to see all cargo actors ‘Operate as One’ such as in a coordinated way instead of in multiple silos. Secondly, we want to see paperless transactions on priority basis. We see this happening via digital corridors between airports and other modes of transport. This will be a gradual evolution fuelled by a growing level of trust to share data. The only way to achieve this is by adopting a step-by-step approach that takes into account the digital maturity and invest in change of management.”

Fidler agreed, “It is great that the aviation industry at large has woken up to cargo, with lots of support from airports which are now looking to invest. We hope to see this engagement with cargo continues and increases, with long-term arrangements and investments. As the cargo volumes continue to increase, digital capabilities are becoming critical for the industry’s need for speed and accuracy. This is the beginning, and we anticipate this developing in the years to come.”

Karyangal concluded, “The air freight industry has come a long way and is progressing fast by adopting technology. Industry stakeholders such as terminal operators, customs, bonded trucking companies and ground handlers have realized the importance of standardization and collaboration. We must devote time to train the existing staff, attract tech-savvy talent to combine experience and perspectives to create excellence.”