Why air cargo must continue to experiment, embrace new tools, tech

The airfreight industry leaders who have been innovating through data, products, capacity, digital tools and integrations, now also need to take on new challenges of pushing forward globalisation, investing in a soft market and being sustainable with scarce and expensive resources.

As an industry with time sensitivity, global reach, regulatory stubbornness, technical proficiency and a high level of flexibility, global air cargo is rich in creative people and has a high innovation culture.

For example, during the outbreak of the Covid-19 pandemic, the industry was quick in responding to the challenges by moving PPE kits and medical supplies, recalling retired aircraft from the dessert, converting passenger aircraft into cargo-only flights, operating chartered flights and above all maintaining high level of coordination with stakeholders.

While the world economy and air cargo industry are facing new challenges in terms of macroeconomic factors, air cargo professionals, as usual, are thinking out of the box.

George Edmunds, general manager of cargo commercial at Cathay Pacific Airways thinks that the most innovative way to respond to the current macroeconomic challenges is by understanding the data.

For example, Edmunds reports that Cathay Cargo has moved its data sources to the cloud.

“This allows us to access data much more clearly and then use business insight techniques, to produce dashboards, and understand the data much more quickly. Therefore, we're able to respond immediately,” he said.

Trade growth is forecasted to slow in 2023, mainly due to slower global economic growth. Nevertheless, logistics is the facilitator of global trade and it should continue to support economies and companies as best as it can with services and solutions.

The challenges seem greater than ever before. But, for Thomas Mack of DHL Global Forwarding, ever since it has been the role of logistics to manage complexity.

"It seems like the new reality is fragmentation and diversification in different markets, with inflation and scarcity of energy leading to higher energy costs. And the fragmentation into different markets is further exacerbated by sanctions and export controls,” he said.

Wilson Kwong of Hong Kong Air Cargo Terminals (Hactl) pointed out the parallel pressures of a soft global airfreight market, combined with the increasing demands of e-commerce supply chains for improved facilities and greater visibility.

“We are witnessing a constant move towards a digital industry and greater investment. Airlines are steadily moving towards digital bookings via third-party platforms, while handling becomes ever more sophisticated, better-resourced and digitally reliant,” he said.

Robert Fordree of Menzies Aviation also thinks that the challenge is to get through the downturn while still investing in technology, equipment, people and facilities so we don’t face the same volume-related challenges in the future.

“We are readying ourselves for the next upturn and will be more prepared than ever,” he said.

Neel Jones Shah of Flexport advises everyone working in the supply chain right now – whether they’re a forwarder or a consignee to take advantage of this time to plan for the future.

“We spent almost three years in a constant state of crisis, which blew freight budgets, forced importers to hoard inventory that ate away their working capital and pushed many to their limit. Today’s lower freight volumes have softened the market and provided an opportunity for teams to analyze their data and effectively forecast demand, plus engage in thoughtful RFP discussions that are about value-added services versus scraping for available capacity,” he said.

Steven Verhasselt of FB Cargo Strategy points out sustainability as an important challenge for the air cargo industry to innovate. He thinks we are at a starting point of a sustainability drive but the resources are scarce and expensive.

“As the market is currently not in the best shape, expensive solutions need to be offset. I believe we can make a huge difference by focusing on sustainability through efficiency. If we can build our networks more efficiently, we save flying time (and fuel burn),” he said.

Trevor Caswell of Edmonton International Airport opines that the air cargo and freight forwarding industries are essential in balancing economic growth, environmental care and social well-being.

“Today's actions will ensure we generate global economic prosperity through authentic environmental, social and governance leadership. No business can do this in isolation, and true change happens in partnership with others,” he said.

The industry must open itself to new changes because the industry has a role to play in globalisation, because it should be investing through the downturn, because it should take advantage of this time to plan and because the resources for sustainability are scarce and expensive.

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