Strengthening the supply chain

At the round table two on the second day of AIR CARGO AFRICA 2015, the focus of the panel discussion was around how to strengthen the supply chain. And the unanimous answer was the urgency to have a collective approach.

While there are many factors that are driving growth for the air cargo industry, one factor that particularly keeps the logistics industry on their toes is the e-commerce sector. “E-commerce is the latest wave of change. Ship a product from the destination to the end customer, and that’s where the complexity starts. Customers want same service as a retail store,” said Ivin George, vice president, airfreight, DHL Global Forwarding.

As the industry gears up to create end-to-end solutions, demand for visibility in the supply chain is essential. “There should be transparency so the transaction is visible to the operator and the end-customer,” said Jacob Matthew, president, Middle East & Pac-Rim & board member at National Air Cargo Group.

But building a collective approach also involves ground handlers who wish to work closer with all parties of the supply chain including forwarders. “Carrier is the relationship point but our cargo actually comes from a forwarder with whom we have less or no connection point,” said Colin Baldwin, vice president, Swissport Africa.

If perishables are the key commodities that drive demand for air cargo, then alongside there are consumers demanding them year-round. “Only airfreight can offer things that consumers demand,” said David Shepherd, global head commercial, IAG Cargo. With technology being an important aspect of the supply chain, he added, “Adoption of IT solutions is pretty shocking. We really need to step up.”

Transport players are finding complexity in the business that evolves from requirements in safety, and numerous regulations and processes that are taking away the focus from customers. “We don’t have to confuse sophistication with complexity,” said Tleli Makhetha, general manager cargo, South African

However complex air cargo looks today, the growth is still there. Sanjeev Gadhia, CEO of Astral Aviation, added that at present air cargo in Africa experiences a growth of four to five percent whereas intra-Africa air cargo is the fastest growing sector at 15 percent.

The essential component of collaborations involves the customs. “Customs is a key facilitator of traffic and delays often happen at customs level. We need to synchronise all partners in the supply chain,” said Gadhia.

Baldwin also added, “There are number of customs bodies and none of those government bodies are talking to each other.”

George of DHL further added, “Collaboration is where all stakeholders need to get involved. We need to integrate information, but across companies.” Integrating multi-modal transport could also be the solution to provide end-to-end connectivity. He also cited the example of difficulties faced in cross-border transport across Africa. “The amount of bureaucracy at border posts is where inefficiency comes into play.”

Panelists explained that they tried to link airfreight with sea freight but there has been “zero buy-in” so far. The infrastructure is in place but carriers prefer a hub-and-spoke model.

It was concluded that the industry needs a tripartite solution which means getting the main drivers of growth in the industry involved. “It is the way forward. Shippers want to talk directly to the airline so we can have a better understanding of what they want,” said Duncan Watson, VP, cargo, commercial operation, Emirates Airlines.