Demand prediction, AI, ML offer ability to react to exceptional situations
The airport service provider dnata offers ground handling and cargo travel services in countries across continents. Terence Yong, cargo development director, Asia Pacific, dnata, speaks to The STAT Trade Times about the role of Just-In-Time (JIT) logistics in air cargo, efficiency brought in by technology, new challenges faced by air cargo due to the pandemic and the future of JIT solutions.
How important is the JIT logistics solution for the air cargo industry as well as the businesses that depend on it?
An efficient supply chain requires JIT solutions in air cargo as organisations minimise waste and avoid duplication by not carrying excess stock. Offshore manufacturing sites fulfilling demand onshore drives further need to have a JIT air cargo solution. The air cargo eco-system comprising of cargo airlines, freight forwarders, 3PL providers, airport operators like dnata and regulatory authorities including customs and quarantine is best placed to experience exponential growth with strong e-commerce of global trade volumes and global economic activities.
Which are the important industries that are most dependent on JIT solutions?
Aerospace and pharma have traditionally been the JIT air cargo industries. More recently, fashion labels and e-commerce that have fulfilment distribution centres offshore have also been part of this JIT air cargo. However, during the pandemic, pharma (including medical) have taken prominence.
How are technology and digitalisation empowering the airfreight industry to offer JIT solutions?
Predictive demand plan modelling with artificial intelligence of machine learning has offered the air cargo industry ability to manage volume and manpower in real-time as well as react to exceptional situations in a matter of hours. This technology is in play with the air cargo systems used by the industry. For example, dnata uses Hermes with machine learning and predictive modelling features in APAC that supports more efficient operations.
How well is the global airfreight industry handling the peculiarities of JIT like the higher loading priority, shorter response times, faster security and faster customs?
Globally the air cargo eco-system has banded together since the onset of the pandemic to first move PPE in a relatively short time frame in response to the surging infection rates. Customs, regulatory, and security concerns were addressed very fast. What used to take weeks was resolved in a matter of days as everyone acknowledged the urgency of PPE then and now vaccines. The challenge at the moment is the slow supply of vaccines and not the air cargo capacity as initially forecasted.
What is the future of JIT solutions in the global air cargo industry and market?
Medical and pharmaceutical products will likely continue to feature prominently both this year and next year in the global air cargo industry specifically as demand outweighs supplies of Covid-19 vaccines. Vaccines will be given the highest priority in air cargo that may potentially displace the other general air cargo products. Also with the congestions of seaports globally will see further increased demand in air cargo.