Air cargo industry needs cultural change and digitization to remain competitive: Unisys

Feb 19, 2020: The air cargo industry needs a fundamental cultural change to remain nimble, economically viable and combat escalating physical and data security threats, believes Niranjan Navaratnarajah, cargo industry director for Unisys Corporation. According to him, the industry needs to take a fresh approach to reduce dwell time, create new business models and capture new market opportunities. Navaratnarajah will be speaking at the Air Cargo India conference in Mumbai slated later this month.

“In the increasingly competitive air cargo industry, the whole ecosystem – spanning airlines, warehouses, freight forwarders, booking agents, customs and road/rail transport – must accelerate its digital transformation, to be more efficient, and remain economically viable, as well as enable new business models and better secure the data and goods that are in its care. Some players have made great strides in adopting new technologies, from online marketplaces, to IoT and drones. However, for most of the industry, a fundamental cultural change is required to evolve and create a truly connected supply chain, where stakeholders can work together to share inventory and securely share data with only those who need it,” says Navaratnarajah.

Navaratnarajah cites three areas where cultural change is required in air cargo:

Make inventory visible across multiple sales channels to create new business models: Reducing shipment dwell time in warehouses is key to improving efficiency. Smarter processes in the warehouse are a first step, but the industry also needs to develop new channels to market. Traditionally, deals were struck via networking and playing golf, but today’s buyer uses portals and online marketplaces such as Digi-Portal to make buying decisions on the spot through an independent channel. Cargo inventory needs to be made available across multiple selling channels – in the same way consumers can buy hotels and flights via independent online comparison sites. Airlines must change their approach and work together to offer a range of route options for customers to buy at their convenience outside of the usual airline distribution channels. This will create multiple routing options for freight forwarders and allow airlines to quickly introduce new products and value-added services. The efficiency and fast pace expected in a global online market will drive the industry to go digital in order to cut dwell time and reduce transport cycles. As two in three shipments now use eAWBs, centralised accurate and real-time data is already available in a format that is easy to share. The biggest hurdle is simply the cultural change required to pull down the walls and work together.

Focus on both data and physical security: Going digital is key to addressing both the cyber and physical security challenges. We must recognise that the data captured about the shipper and the shipment is extremely sensitive and is a valuable target for malicious attacks. IATA’s ONE Record initiative creates a standard for data sharing and a single record view of the shipment, improving the ease and accuracy of accessing the data. To take advantage of One Record, we must balance security with accessibility. Ultimately the customer owns their data –the eAWB, and should only be accessed when needed by those who have the need and authority to do so. In an environment where ransomware, denial of service attacks and human action (either accidental or malicious) can – and will – occur, the industry must move to a Zero Trust approach to security to prevent breaches and isolate and minimise their impact when they happen.

Similarly, physical security is a weak point for the industry and securing warehouses is key to securing the supply chain. It is almost expected that a certain percentage of goods will be lost, pilfered or damaged. Warehouses need to do a better job of knowing who is on site. Only the right people should access freight for the right reasons and any deviation should be identified and swiftly stopped. Mobile biometric applications enable a smartphone or tablet to verify if someone should be granted access – with additional multi-factor authentication used to screen access for the most sensitive, and valuable cargo. Warehouse operators could use the security of a location to develop a trusted origin program, similar to the passenger trusted traveller program.

Respond to market demand for specialised cargo: While traditional cargo has become commoditised and general cargo volumes decline, demand for special cargo such as perishables, pharmaceuticals and live animal transport has increased2 driving demand for specialised services such as cooltainers, thermal blankets and environmental controls. These services require connected smart technology, such as embedded environmental sensors, combined with rules for automated alerts and responses to identify distress fast and fix it early. For example, to alert temperature changes before perishables spoil. Ultimately, the industry needs to harness technology advances to meet the needs of this important and growing segment in order to access its high revenue and yields. Again, this requires a fundamental cultural change to move from dealing with problems reactively, post-event, to being proactive to prevent them worsening or happening at all.