Air cargo digitalisation buzz is getting louder and engaging

Large air cargo entities are making substantial investments to bridge the existing digital divide.

Air cargo digitalisation buzz is getting louder and engaging
Listen to this Article

The air cargo industry is buzzing with the transformative power of automation. From streamlining paperwork to handling massive pallets with robots, it's revolutionising every aspect of the journey.

At WebCargo by Freightos, we have mainly learned how patience pays off, says Zvi Schreiber, CEO, Freightos. "It took a long time for this industry to start its digitalisation journey but once it started, adoption has been incredibly fast and continues to grow every month. Building on this very unique foundation, whether in terms of more supply, more forwarders, more features for airlines or forwarders or branching out to areas like payment, all are on the table but they all depend on the underlying enabler that took a very, very long time to unlock."

So, here are some of the key changes…

Paperless magic: Say goodbye to mountains of paperwork! Automation takes over document generation, approvals and customs clearance, saving time and reducing errors. Electronic Data Interchange (EDI) enables seamless data sharing between stakeholders, ensuring smooth information flow.

Warehouse whiz: Automated storage and retrieval systems (ASRS) optimise storage space, retrieve shipments in seconds and minimise manual handling. Conveyor belts whisk packages through terminals while automated sorting systems ensure speedy delivery to the right aircraft.

Robot workforce: Autonomous mobile robots (AMRs) navigate warehouses, fetching and delivering shipments, reducing reliance on human labour and increasing precision. These nimble bots can adapt to dynamic environments, handling both urgent and routine tasks.

Scan & track: Smart barcode scanners and RFID tags provide real-time tracking of every package. Customers can monitor their shipments every step of the way, improving transparency and building trust.

Zero error zone: Automation minimises human error in data entry, weight calculations, and labelling, leading to fewer lost or misdirected shipments. This translates to happier customers and reduced costs for airlines.

In its earlier days, the aviation industry exhibited a certain reluctance towards adopting technological advancements, positioning itself as a laggard in the realm of tech integration, says Vineet Malhotra, Co-Founder & Director, Kale Logistics Solutions. "However, the onset of the global pandemic marked a pivotal turning point. The unprecedented challenges brought about by the pandemic underscored a critical truth: without robust technology infrastructure, business continuity for entities, irrespective of their size, faced severe hurdles.

"The pandemic served as a compelling catalyst, propelling the aviation industry into a rapid tech adoption mode. The imperative for digital resilience became starkly evident as traditional operational models struggled to cope with the disruptions. Entities, both large and small, found themselves at the crossroads, necessitating a fundamental re-evaluation of their technological preparedness.”

Benefits of automation - Case studies

One clear benefit of automation which we see every day on WebCargo is that when flights are cancelled or cargo is offloaded, forwarders are notified automatically and can rebook in seconds. They can even set up automatic notifications for the shippers. This may sound minor but it is a great manifestation of how very regular incidents that could happen multiple times a day for a forwarder can be resolved with underlying industry digitisation: Zvi Schreiber, CEO Freightos

The concept of digitisation in the air cargo industry has been a longstanding topic but significant strides towards substantial progress have only materialised in the past two to three years. Addressing persistent digitisation challenges such as reliance on paper-based operations, manual duplicate data entry, and the lack of real-time visibility into cargo movement, has become an imperative for the sector. In response to these challenges, a transformative shift is underway.

The industry is shedding the constraints of disparate satellite systems and embracing a unified, cloud-based platform that spans the entire spectrum of cargo operations. This comprehensive digital framework encompasses crucial facets of the cargo business, seamlessly integrating functions ranging from sales and booking engine to pricing, capacity control, cargo operations, air mail management, and cargo revenue accounting.

As the air cargo industry embraces this digital evolution, the transition towards a unified, cloud-based system signifies not just a technological upgrade but a strategic leap towards agility, responsiveness and enhanced customer experiences. The momentum gained in the last few years underscores the industry's commitment to harnessing the transformative power of digitisation for a more efficient, interconnected, and future-ready air cargo landscape.
- Vineet Malhotra, Co-Founder & Director, Kale Logistics Solutions

AI @ the helm

As expected, artificial intelligence (AI) is challenging/modifying/simplifying mundane/routine tasks to make air cargo operations efficient.

Key developments include:

Predictive maintenance: AI-powered algorithms analyse sensor data from aircraft and equipment to predict potential failures, enabling proactive maintenance and minimising downtime.

Route optimisation: AI-driven software crunched vast amounts of data to optimise flight routes, considering factors like weather, airspace restrictions and fuel efficiency, leading to faster deliveries and reduced emissions.

Smart pricing: AI algorithms dynamically adjusted cargo pricing based on real-time demand and market conditions, creating a more flexible and efficient pricing system.

Zvi Schreiber, CEO Freightos

At Freightos we see AI as having the opportunity to play a major role, says Schreiber. "We’ve actually been using machine learning for a number of developments internally. That said, we don’t necessarily believe that large language models (LLMs) will play a formative role. Since cargo is about numbers, not language, we are putting more emphasis on regression AI models which help to automate and optimise yield and capacity utilisation. We do use LLMs to some extent, like for parsing natural language quote requests for eBookings but it is the exception, not the rule.

“As in all industries and all walks of life, AI will play a growing role in air cargo including optimising yield, optimising the utilisation of cargo holds, and, of course, automating aspects of customer support. Ultimately, Freightos and WebCargo have always been about leveraging technology to improve global freight; AI is another important tool in our toolbox.”

LLMs such as GPT-3 could play a role in facilitating certain aspects of air cargo automation, particularly in areas related to communication, information retrieval, and decision support, says Malhotra of Kale Logistics. "Natural Language Processing (NLP) can be for communication between different systems, stakeholders and even with customers. This can enhance the efficiency of information exchange and customer service, automated customer support systems, handling inquiries and providing information about cargo status, schedules, and other relevant details. Large language models equipped with advanced analytics capabilities can assist in processing and analysing vast amounts of textual data related to cargo operations. This can help in generating insights for decision-makers and identifying trends or potential issues.

“AI will be the hero in the coming years. Beyond overcoming immediate hurdles, businesses within the industry are strategically positioning themselves to unlock new opportunities. The strategic emphasis on AI is not merely a response to adversity but a proactive approach to revolutionising cargo operations. Through seamless integration of AI technologies, the industry is not only mitigating existing challenges but is also paving the way for a more adaptive, responsive, and intelligent air cargo ecosystem.”

Large language models, like GPT-3 and its successors, are powerful tools primarily designed for natural language understanding and generation, freeing up human resources to focus on more productive activities, says Lee Booth, CIO and Stephane Noll, Head, Digital Engagement and Transformation, CHAMP Cargosystems. "While they may not be the core technology for physical automation tasks, they can play a crucial role in the broader spectrum of air cargo automation through the following applications:

Customer service and communication: Large language models can be employed to enhance customer service through chatbots, virtual assistants, and automated response systems. They can understand and respond to customer inquiries, provide real-time updates on shipments, and offer support, contributing to a more streamlined customer experience.

Document processing: Automation of document processing is vital in air cargo logistics. Large language models can be utilised for tasks such as parsing, extracting relevant information from documents (invoices, air waybills, etc.), and automating data entry, reducing manual effort and minimising errors. That’s why we are very proud to have launched CHAMP A2ZScan, which uses AI to save time and reduces human error by scanning and processing paper air waybills, finding key fields, and translating them to a digital format."

Lee Booth, CIO, CHAMP Cargosystems

The other applications, according to CHAMP, include regulatory compliance, risk assessment and decision support and training and knowledge transfer.

"While large language models may not directly handle the physical automation of tasks like robotic systems, they can serve as a critical component in the automation ecosystem by addressing cognitive tasks, enhancing communication, and supporting decision-making processes," says Booth and Noll.

The role of AI in air cargo is expected to expand significantly in the coming years, driven by ongoing technological advancements and a growing recognition of the benefits that AI can bring to the aviation and logistics sectors, adds Booth and Knoll. "There are activities which are perfectly poised to deploy such technology: optimised route planning and operations, cargo tracking and monitoring, smart warehousing and automation, dynamic pricing and revenue Management.

"However, many innovative ideas for AI never make it to production either because they do not have the high-quality and normalised data needed or because the data available is not well suited to the problem being addressed. These are reasons why service providers, who see masses of operational data from multiple clients, are best placed to develop, even private, services.

"The organisations that adopt AI early will benefit from a competitive advantage – to a large extent this can be determined by each organisation independently as benefitting from AI solutions does not require the entire air cargo supply chain to align to the solution. This means we will see pockets of AI in different organisations at different parts of the supply chain, each realising their own benefits.

"Experiments with AI include predicting no-shows to optimise load factors, enhancing goods inspections, detecting anomalies, and reviewing air waybills to identify sanctions, safety, and security issues. There is huge potential from analysing visual inputs but maybe the biggest use case will come from better forecasting because of its obvious potential to optimise services across the supply chain. In all cases, results will multiply in value as more structured and unstructured data feeds are captured and used."

Data is everything
With more and more data becoming available for analysis and tools being developed to get actionable outputs from the data, the air cargo industry is no stranger to these developments.

Blockchain takes off: Blockchain technology gained traction for secure and transparent tracking of cargo movement, enhancing visibility and building trust throughout the supply chain.

Data-driven decisions: Airlines and ground handlers leveraged data analytics platforms to gain insights into operational efficiency, identify bottlenecks, and make data-driven decisions for continuous improvement.

“Augmented reality (AR) has a huge potential not only in air cargo processes but even for ground handling services and other stakeholders in the supply chain," Teemu Kokko, President & CEO, Haaga-Helia University said while presenting a 2021 study on the Implementation of AR in air cargo operations towards achieving higher sustainability for the International Air Transport Association (IATA). "We will need more data to fully unlock the potential of AR in the cargo industry. Without accurate data and confirmed successes for reference, stakeholders will hesitate in introducing new and innovative solutions to their processes."

IATA is also pushing for ONE RECORD - "an end-to-end digital logistics and transport supply chain where data is easily and transparently exchanged in a digital ecosystem of air cargo stakeholders, communities and data platforms."

The move is likely to bring various benefits to the industry including data quality and control, visibility and transparency, plug & play connectivity and welcoming a new generation.

Stephane Noll, Head, Digital Engagement and Transformation, CHAMP Cargosystems

Automation in air cargo has been challenging where the industry must be aligned for the automation to be effective – consider how long e-AWB has taken to have a level adoption, for example, says Booth, and Noll of CHAMP Cargosystems.

"However, digitalisation and automation are no longer just nice to have – they’re essential to remain competitive. Digitalisation is an absolute necessity to improve data quality and completeness, which will help fully leverage the power of AI technologies. Technology will continue to evolve at an accelerating pace in the coming years, making it easy for businesses to fall behind. It will be down to each business to determine the benefits of automation, digitalization, and AI.

"This can be seen as an advantage where innovations can be made without requiring business partners to adopt the same technology but may lead to somewhat “patchy” adoption of technologies."

Challenges and road ahead
Implementing automation requires significant upfront investment in technology and infrastructure, and smaller players might face financing hurdles.

Automation can lead to job losses in certain areas. However, it also creates new opportunities in technology maintenance, data analysis and robot operation.

Seamless integration of various automation systems into existing infrastructure is crucial. Additionally, robust cybersecurity measures are essential to protect sensitive cargo data.

Despite the challenges, the benefits of automation in air cargo are undeniable. As technology continues to evolve and integrate, more advancements are possible in the years to come, shaping a future where efficiency, accuracy and sustainability would be the hallmarks of air cargo operations.

Airlines and forwarders are actively embracing the prospects of automation and digitisation, says Malhotra of Kale Logistics. "Despite this, the broader landscape of businesses engaged in supply chains has only managed to digitise slightly over 40 percent of their operations, leaving a substantial 60 percent gap that holds immense potential for transformation.

Vineet Malhotra, Co-Founder & Director, Kale Logistics Solutions.

"Recognising the untapped opportunities within this significant gap, there is a collective eagerness to propel the digitisation quotient further. Notably, large air cargo entities are at the forefront of this momentum, making substantial investments to bridge the existing digital divide. Projections indicate that spending in this domain is expected to surge, reaching an estimated $103 billion by 2029, exhibiting a robust compounded annual growth rate (CAGR) of 11.2 percent from 2022 onwards."

A view shared by Schreiber of Freightos who adds: “Without a doubt, both airlines and forwarders are much more receptive to digital solutions. WebCargo is signing up multiple new forwarders every single day for ebookings. One key learning is that basic use of digital bookings requires zero capital investment for freight forwarders and a much smaller investment than it used to for airlines."

The adoption of automation and AI technologies are all but guaranteed in the future of air cargo, adds Lee Booth and Stephane Noll of CHAMP Cargosystems. "Businesses that can leverage these innovative and open technologies stand to gain enviable competitive benefits. The key to an automated air cargo industry lies in adequate investment, strategic execution and incentivised adoption."

(Inputs from Google Bard)

Read Full Article
Next Story
Share it