Air cargo needs to survive the wave of digitalisation

Pre-Covid world consistently presented air cargo industry with opportunities to measure benefits of digitalisation against the reality, which involved more people and paper. But in the current circumstances where the workforce is scant and paperwork is overwhelming, the air cargo operational mix is left with holes that can only be filled with digital solutions. Considering this as the new normal, the importance of digitalisation has surpassed the profit it brings for the air freight industry and aviation as a whole.

With Covid-19 pandemic setting up an ideal breeding ground for digital solutions to thrive in the air cargo space, many online platforms and software companies are seeing multi-fold jump in demand for their solutions. Cargo.one, which is a Berlin-based company that focuses on digitising air fright industries, for one, saw nearly 200 percent increase in freight forwarding companies registering on its platform in four months, and 200 percent increase in the volumes processed. Such are the impressions of many IT solution companies serving the logistics and supply chain communities.

Software services and online platforms are effectively trying to bridge many gaps that are being created by disciplines such as social distancing and stay-home due to the contagion. The spotlight has dramatically increased the operational rate for IT industry as well — forecasting frames have been squeezed from 14 - 18 months into the future to 2 - 3 months. It is an unprecedented push. Ashok Rajan, who is the senior vice president, global business head, cargo & logistics solutions at IBS Software, professed at the Air Cargo India 2020 show that took place in late February, before the World Health Organisation (WHO) declared Covid-19 a pandemic, that “We need a sledgehammer to move digitalisation forward, through customers or through legislators.” Clearly not anticipating a sledgehammer of this magnitude.

Binary solution for people and paper
“It is no longer paperless, it is contactless,” Sara Van Gelder, cargo digital development manager, Brussels Airport Company, said during a webinar hosted by The STAT Trade Times on the topic of digitalisation. Logistics industry involves extensive routine paperwork, and paperless exchanges of delivery are becoming not only mandatory but also a practice that is significantly reducing transit time.

“Truck and human congestion at airports is a concern. Practice of truckers waiting at the handling agency for paper checking needs to be eliminated. For this to happen, as soon as the truck reaches the handler’s counter a digital copy of the paperwork should be made accessible to handlers.” Amar More, CEO, Kale Logistics Solutions, explained during the webinar.

An enormous list of common documents needed for the movement of air freight is largely manually lugged through various agencies. Air cargo community is desperately looking out for ways to make these exchanges paperless and contactless. Amar More shared that the “Certificate of origin is critical to move air cargo. Since the pandemic, we have seen that exporters are accessing our platform on issuance of certificates 8 folds, which was put in three years ago. The adoption has gone eight times in last two months. Same goes for paper exchanges for deliveries (electronic delivery orders) and paperless communication for deliveries.”

IoT, big data, AI and blockchain
Such rapid digitisation of processes in the air freight makes everyone wonder what the right mix of digital elements for good IT solution would look like going forward. Big data, artificial intelligence (AI) and blockchain have always been integral parts of the system from collection of data to decision making. “Internet of Things (IoT) and big data are the most visible first wave of impact that could come in. There’s gold sitting in the mountain of data, which can help you drive a lot of near term decision making. IoT combined with big data can give you visible impact. From there you raise your level to using that to drive machine learning and significant autonomous decision making,” Rajan opined during the webinar.

Considering the trend of adoption of digital services in the air cargo sphere, Moritz Claussen who is a founder and managing director at Cargo.one stated in the webinar that “Even before we get to big data; let’s start collecting data and start making use of it before it becomes big. Having so many manual processes, air cargo industry has not particularly been good with that (collecting data). Then we could move on to big data, and hopefully IoT would help us along the way with tracking and automating a lot of things.”

While the air freight industry is crowding to adopt IT solutions, the industry remains principally nascent to begin banking on artificial Intelligence, machine learning and blockchain. But there are strong drivers that will seduce big data and spin the wheel for automated decision making, such as e-commerce. Rajan stated “E-commerce volumes have gone up by 40 percent in the last two months, and 124 percent since the same time last year. This marks huge jump in value and that it (e-commerce) is going to shape the digitalisation. In short and medium terms, e-commerce and digital platforms are going to share the future.”

Rapid adoption of IT solutions also means that by combining data within the industry, automated decision making could be brought to fore faster compared to an independent company thriving to build its own asset of big data, which can be time consuming and not in terms with the inclusive nature of the air cargo industry. Van Gelder warned that “If you are not open to share data, all the other things and technology that we are discussing around actually don’t really matter. We need to be more open to share data, and not do this in our own garden, so that everyone is able to use that data in specific algorithms to start using machine learning and artificial intelligence or to feed it into an application, which can create operational efficiency.”

This feature was originally published in June 2020 issue of The STAT Trade Times