Globally, digital transformation is heralding a new era in the cargo sector. Be it Air, Ocean or Land, digitalisation has become the necessary oxygen for the operations to run seamlessly. CARGOTALK’s virtual conclave on ‘Digitalisation’ discussed at length how adopting latest technologies are blurring the lines between the supplier and the customers.
Priyanshi Bana
The unforeseen scenarios created by the pandemic has pushed the cargo, supply chain, freight forwarders etc. to go full-blown for digitalisation. Focussing on the need of the hour, the virtual conference discussed the various aspects of digitalisation in making the operations and supply chain management more efficient. The session was led by Tushaar Jani, Chairman, Cargo Service Centre Group (CSC); Amar More, CEO, Kale Logistics Solutions; and Ashish Asaf, Managing Director, S. A Consultants and Forwarders.
Redefining Air
More and more carriers and forwarders have embarked on digitalisation to streamline operations and increase productivity by using modern technology. In fact, to accelerate digitalisation, it is necessary for the stakeholders of the industry to embrace the transformation seamlessly. Says Tushaar Jani, Chairman, Cargo Service Centre Group, “I have redefined Air in the last one-and-half-year as Agility, Innovation and Resilience. The cargo industry needs a human face of technology. If our mindset is ready to adopt technology, what the primitive technology in the face of email and others have achieved, with an integrated technology approach as a whole, the transformation it will bring to the air cargo industry is beyond imagination. I think we can be number one in showing the technology path to the world. We have the capacity and capability to do it. All the three pointers, Agility, Innovation and Resilience, can be achieved through technology.”
Expounding on the same lines of digitalisation, Amar More, CEO, Kale Logistics Solutions, says, “We work in more than 30 countries including the USA. But the digital acceleration in India was palpable and we are leading from the front. There are some key initiatives being taken up for the environmental and economical sustainability which will be the benchmark from the airports’ perspective. The pandemic has indeed taught us to lap up technology. As an air cargo industry, we were ranked 117 ten years back, today we are 4th in IATA’s Air e-way bill ranking! If we don’t encash upon the opportunity to digitise now, then there is a natural death waiting for us. India should take-off now!”
Airlines, freight forwarders, airports and ground handlers too are playing their part in innovating and finding solutions. It was digital technology that enabled the industry to move the air freight more efficiently. Digitisation has kept the industry stay afloat even during the pandemic disruption. Says Ashish Asaf, MD, S.A Consultants and Forwarders, “Digitisation has always been important in enhancing efficiency and increasing real-time visibility in every part of the value chain. The pandemic has accelerated the digitisation by years. It is no more a choice but a necessity. However, I would insist on building a balance between technology and human expertise. Cloud-based data has become the norm. Also, the pandemic has changed the perception towards technology, which was earlier considered a cost is now pondered upon as investment to improve logistics operation. We need to train our people in such a way that they treat technology as an enabler rather than a burden.”
Pandemic: Blessing in disguise
Each adversity brings us a bigger opportunity! The pandemic did the same. It was like 4-5 years of digitalisation packed into one and delivered to all of us. Says More, “Earlier words like Artificial Intelligence, IoT’s, Blockchain etc. scared all of us. But with the pandemic, these same words have become the norm. Not only this, India has a drone policy in place now. In Delhi, they already have a ‘proof of concept’ of how drones can be used to monitor inventory as well as the security of the cargo warehouse. This should have happened long time back since the world relies on India for technology. It is considered as the world’s IT back-office. Today, with the pandemic many logistics companies have already adopted various technologies to remain operational. Technologies like Cloud have become the lifeline for operations. There was tremendous increase in digitisation in India. Digitisation is no longer a nice thing to have, it has become a necessity now.”
Automation and business intelligence technologies have been central to improving adaptability and optimising the supply chain to meet customer demand. Internet-connected sensors can detect the supply chain disruptions and address the issue in real-time with minimal human intervention. If done right, it can increase visibility, responsiveness and resiliency across the entire supply chain ecosystem. The main aim for digitalisation is to have a sustainable future for the air cargo industry, enhanced online customer experience and seamless connectivity. With unprecedented COVID-19 impact on the air cargo industry, air freight market players are reassessing the importance of digitalisation and accelerating its pace.
Data, the new driver
Integrations such as Big Data and analytics have provided immense success towards the reduction of wastage and enhancement of profitability. Says Asaf, “Data driven decision has become much faster with ever evolving technology as it can be accessed and analysed with just a click away. It has become utmost priority that the logistic industry adapts consistently to unforeseen challenges thrown by the pandemic. Hence, shifting the gears from crisis handling to an optimistic future is always the need of hour in our sphere of business. Cloud-based data management has come to the forefront. The 2020 pandemic has changed the perception towards technology in improving logistics operations. There are other factors which need to be considered equally. Logistics is not just a simple chain of acuities but the dynamic network of integrated processes of technology and people wherein technology should be seen as an enabler.
Another important area of concern is cyber security. In cyber space there are no boundaries, thus making back players abuse digital assets which can quickly become compromised and is vulnerable to cyber attacks from anywhere. This could result in security breaches at national level costing lives and money.”
Change in the customer behaviour
As most of the transactions shifted online during the pandemic, customers became less tolerant towards delayed or incorrect orders, meaning, the logistics and distribution companies had to be more accurate and on-time with their orders. Explaining the change in customer expectations, Jani says, “Post pandemic the market segmentation, the product character and the demand from the customer has changed completely in terms of expected delivery, mindset and in terms of the commercial. It’s a new era where a customer is looking for a better solution than what he had in the past. He is more educated than before. Therefore, it has become more partnership-oriented rather than a customer-vendor relationship. The customer today understands the importance of air cargo. If there was no air cargo supply chain working in supplying medicines, PPE kits, oxygen concentrators etc., India would have lost 50,000 more lives. Secondly, with the problem of maritime logistics (Suez Canal), the customer has realised that air cargo supply chain is more reliable than ever before. However, an Indian customer is always cost conscious, a challenge which will always be there. Therefore, the industry has to work together.”
Key trends shaping the future
Playing a significant role in digitisation, e-commerce has grown manifold during the pandemic. With online shopping becoming the trend, delivery and courier service companies quickly realised the urgency for digitalisation. From real-time tracking of parcels to route optimisation and the latest being the contactless delivery, the industry adapted and adopted the latest technologies at an unprecedented pace. Says More, “Thanks to e-commerce, the customer today wants a certain level of quality of transportation, like staying updated on the status of the shipment, time of arrival etc. Digitalisation will play an important role in dealing with this trend. The other trend which the industry has seen is in the last one-and-a-half years, is that over a billion of dollars have been invested in cargo technology or cargo marketplace portals. Large carriers like Lufthansa etc. have made those investments and are a part of these portals already. This was essentially fuelled by the pandemic. No one imagined such a thing would happen in cargo. Selling cargo capacity online is a reality today. Third, is the role of regulators. They are more into trade facilitators today. The world banks and United Nations are now helping in trade facilitating in terms of measuring the logistics industry in the form of ease of doing business, rankings, or logistics performing index. Our Prime Minister is very keen on improvement when it comes to these rankings.
So when we are competing with the world, we have to prove that we run a very smooth and an efficient supply chain. Then comes the paperless trade, with a focus on sustainability, saving more trees, gas and pollution. These are some of the key trends. Without the support of technology, none of these are achievable. The e-marketplace for the cargo like Webcargo, Freightos etc. cannot sell cargo capacity without technology. Coming to paperless trade, India has the most vibrant ecosystem of digital communities’ system. All our major airports have put those in place and integrated different stakeholders to eliminate paper. Similarly, providing visibility to the shipper about the shipment to the extent that he is aware about the condition of his shipment, has been possible with digitisation. Therefore, trends like supply chain transparency, paperless trade, marketplace and trade facilitation are all being supported well with technology.”
Digitalisation to ease congestion
Aside from disrupting terminal operations, port congestion is a frustrating predicament for both the carriers and shippers. Real-time shipment tracking is a capability that is a must-have today, helping shippers monitor freight movement. Explains More, “To understand congestion, we have to understand its principles. One, there could be shortage of physical infrastructure. Second, if the cargo terminal handlers could have more visibility to process the shipments faster, it can help them plan their resources well in time. Prior information about the arrival time of the shipments and about the slots of what is coming at a particular time, will enable us to address the congestion to a large extent. Also, if the entire documentation can be done online before the arrival of the trucks at the airport, a lot of congestion can be avoided.
Congestion can be addressed, first, by having a system of streamlining the traffic flow with the help of an appointment management system at the airport. Second, if the cargo handling companies could have more visibility through cargo community platforms, they could process the trucks much faster. For this, the onus lies on the airports and the ports to implement digitisation across the cargo industry since they are the neutral agency in the supply chain. We already have some of the best cargo community platforms in the world and many countries are following us. Leaving behind the differences, the cargo community has to stand united in its approach towards digitisation.”
Reviving the smaller airports
Due to zero passenger flights, smaller airports who were not doing any cargo have suffered a lot in this pandemic. Many of them have been temporarily shut since they have remained non-operational most of the time. The maintenance cost is exorbitant. According to Asaf, “The crisis has shown the importance of freight in helping sustain the airports. Out of the 123 commercially active airports in India, 29 are major airports, where cargo operations can be nurtured and can start as feeder airports to metros like Delhi, Mumbai etc. where the international cargo space and connectivity is more frequent. Smaller airports should first and foremost focus on their local cargo hub and trade representatives, identifying the strength and the weakness of the regional market, the air cargo facilities and the service infrastructure. The government is also working out the retail strategies for trade deals, promoting districts as export hubs, import monitoring and using market intelligence for exporters which will lead to have a seamless and high quality of supply chain at low cost logistics to boost exports. This is the time for us to establish a new identity of quality and reliability. Full- fledged cargo operations at smaller airports will be the milestone complementing the vision of our Prime Minister targeting a $1 trillion economy by 2027-28 for merchandise exports and $500 billion exports in next two years for which we need to start our groundwork from now onwards.”
Supporting the role smaller airports can play, Jani says, “It is a block in our mind that an airport must have an aeroplane. To fly an aircraft from a smaller airport would be a very costly affair. The country must develop a proper multi modal connectivity which is still not well defined and well established. Even a truck can have a flight number!”
After digitalisation, it’s time for digitisation
Since most of the industry has already adopted the latest technologies to remain operational, it’s time we move to digitisation. Says Jani, “After digitalisation, our next step should be digitisation. If we do that, we will be increasing our cargo infrastructure by at least one hundred times!” The advantages of digitisation include: (i) cost rationalisation, (ii) process optimisation, (iii) infrastructure
multiplies and others. India is going to assume an important place in supply chain in times to come. The government has done a commendable job and is ready to change the law as far as the cargo industry is concerned. In short, digitisation is the oxygen for the cargo industry.
