After navigating through the extraordinary challenges and unprecedented circumstances imposed by the COVID-19 pandemic, the global air logistics industry and is all set to move forward utilising technology as a ‘Survival Kit’. For those still depending on the conventional ways of operating and manual functions may still find it difficult to exist in this current challenging environment, but companies who have embraced 100 per cent digitalisation are all set to welcome rapid growth and build on agility and resiliency over time. Technology has truly become a means to reinforce business competitiveness and performance in the New Normal scenario and it has truly been playing a pivotal role in defining the success of the supply chains, by enhancing the effectiveness and efficiency of the logistics system, writes Ritika Arora Bhola…
Logistics Operational Efficiency
With the onset of COVID-19 crisis, the global logistics industry witnessed a boom in adoption of Internet of Things (IoT), data analytics and the cloud, robotics and automation, chatbots, and new age technologies like Artificial Intelligence, Machine learning, Blockchain, that is helping enhance logistics efficiency and maintain operational consistency.
The last few years saw emergence of several young global tech startups like CargoAi, Cargoflash, WebCargo, etc. offering highly efficient and innovative tech solutions to the logistics and related sectors, for boosting speed and cutting down on paperwork and other rigourous manual operations. With digital technology and cloud data becoming increasingly available from multiple sources, now cargo handlers and customers are beginning to see the potential benefits of greater visibility and ability to improve and analyse efficiency of business operations.
“The new, evolving technologies are generating strategic opportunities to make competitive advantages in various functional areas including logistics and supply chain management. Within the logistics sector, automation technology has substantially increased the speed of identification, data collection, processing, analysis and transmission, with a high level of accuracy and reliability,” says Jasraj Chug, Director and Co-founder, Cargo Flash Infotech.“Technology has become a means to reinforce business competitiveness and performance. However, the degree of success depends on the choice of the technology, availability of proper organisational infrastructure, culture and management policies.”
With the newest technologies being utilised in logistics and supply chain management, including automatic identification, real-time communication and information, apart from supply chain and logistics software SaaS companies that helps firms globally optimise their supply chain and logistics operations, digitisation is making the Indian logistics arena more advanced, connected, and lucrative. Amongst risk mitigation, cost optimisation, and increased customer satisfaction, technology and automation has become the foundation for increased efficiency within the domestic logistics sector.
“Thanks to the liberalisation of the Indian economy, the competitive pressure is built up and therefore the only choice to face the competition is to qualify certain technology-enabled operations,” says Chug.
“Data and technology can be very powerful tools to create new business opportunities with better efficiency and lower transaction costs when compared to traditional methods,” says Aashish Agrawal, Managing Director at Freightos India.
“For the overall logistics space, technology enriches the user experience at all levels by standardising and streamlining how freight moves. This is especially impactful in India, as it is one of the major countries for air cargo, with multiple airlines and freight forwarders who are part of the ecosystem,” according to Agrawal.
“For freight forwarders, technology provides both faster operations and customer service. Conveniently, these are also two main factors considered by customers when choosing freight forwarders to work with. Our platform WebCargo connects forwarders to airlines by providing them access to instant, bookable rates and capacity, through our API connectivity with airlines, which otherwise wouldn’t be available in a live environment.”
“The efficiencies created for air cargo booking transactions benefit both forwarder and airline, and airlines further benefit from selling cargo directly to their customers on a self-service model with transparency and accuracy. One could easily draw parallels between what WebCargo is doing on the freight side and what the Indian online travel company MakeMyTrip is doing on the either side. This type of digitisation adds value to an industry by providing much faster and standardised transactions at faster speeds compared to what is available otherwise,” adds Agrawal.
“Technology and especially APIs enable a complete reconciliation of all records of a shipment to ensure the best service for the end customer,” agrees Matthieu Petot, CEO, CargoAi. “Technology-based airfreight distribution ensures visibility over the best price, the best route, and the best carbon footprint for the customer to choose from. Final invoices match quotes and bookings. Operational efficiency opportunities are thus everywhere.”
Cédric Millet, ECS Group Chief Strategy and Digital Officer says no differently. “Data has been there in a way or another. The most important thing is not to have data. The most important thing is to know how to make use of it, and to share it factually, without interpretation, to the various stakeholders. Technology plays an essential role in how quick it extract, transforms and loads (ETL) data into big databases. Technology also ensures to make that data available everywhere, at all times and in a secured manner. The role of Data Engineers, Data Analysts and “BI Labs” became essential in order to do that. They deliver all the ingredients necessary to give visibility and facts. On the quality side, this plays a major role in identifying the root cause of structural problems, so that corrective actions can be implemented. On the operational side, this prevents documents to be lost when the information is transmitted electronically. It also speeds up the delivery when customs clearance can be anticipated. Exchanging information also means that you can trigger alerts when things do not go as planned. This helps speeding up the recovery.”
“There is still a long way to go before having a clean, streamlined, standardised way of handling data across all stakeholders of the air cargo industry,” says Nathanaël De Tarade, Chief Commercial Officer at Wiremind. “That isn’t to say that there is not a trend. On the contrary, things are moving in the right direction, the right level of priority is often given to data-related topics. In short, we have taken off, but the flight is not over. Talking about the role of technology and operational efficiency, I think this is very clear to everyone when we look at concrete examples. Take the efficiency of a customer service agent: if one has to send 12 emails to ask for a quote, make 5 phone calls to ask for a follow up, it’s quite obvious than efficiency is raised by cutting this process to just a few clicks. Thanks to the utility of integrated solutions, platforms, etc. that speak to each other.”
Technological Progress and Potential Benefits
There are numerous benefits of tech adoption in terms of efficiency gains, quality, communication and costs reduction, to name the most primary.
Digitisation of the air sector’s supply chains has been one of the most significant factors, which already resulted in noticeable improvements in terms of resiliency and agility in worldwide operations. Airline and logistics management firms are now reconsidering all the processes to be digitalised at a breakneck speed. Air cargo is going to be a critical zone of durability for airlines and airports within the conceivable future, considering the management make it a strategic priority to introduce simple, end-to-end technology solutions to automate whole of the management process and operations.
A large number of service providers in the sector are deploying modern technologies to reinforce flexibility, efficiency, and sustainability.
Recent years witnessed the emergence of cargo bookings on one platform allowing a convergence of multiple airlines and freight forwarders on a singular interface. Integrating a technology solution will augment operations and improvise transit operations. This protects the agency time and money. Also, the ‘last-mile delivery’ conundrum is making on-demand shipping affordable and achievable, making an organisation stand out from the crowd.
Witnessing such an advantageous opportunity, Cargo Flash Infotech is thinking ahead of the curve and designing future-ready systems to collaborate between the key stakeholders of the air cargo domain. “Technology must be embraced to extend efficiency, show real-time performance resulting in an eco-sustainable operation, which successively will result in better decisions and increased revenue,” Chug says.
CargoAi’s customer offering starts with transparent information at their fingertips, which translates into immediate efficiency gains. “Better information means better procurement decisions, in terms of costs but also sustainability for sure. Our mission at CargoAi remains to really help our customers ‘future-proof’ their airfreight procurement activity,” adds Petot.
Agrawal says, “While the entire freight logistics industry benefits from advanced technology, the air cargo sector in particular has an advantage as the passenger side of air travel has already been digitised across many platforms for decades. Customers benefit from the immersive experience, better optionality, and standardised pricing and booking access. Airlines improve overall load factors, and provide a better customer experience.”
Millet highlights, “Technology has a role to play in all processes of the air cargo sector. In the commercial domain, making use of an advanced ‘business intelligence and reporting system’ allows you to implement a data-driven sales approach where your sales teams can identify performance gaps, and find the right leverages to improve revenue optimisation. On the reservation side, digitising the quotation process and the booking process for simple shipments can free up time so that your teams can focus on more complicated added-value shipments, on flight optimisation or on a better interaction with GHAs.”
“General cargo shipments below 500 kgs represent 40 to 50 per cent of the business in terms of the number of AWBs issued, and there is no good reason to still have these shipments booked via emails or phone calls, requiring human interaction. On the customer service side, technology allows you to have a real-time track and trace of all shipments, with even on-flight geolocation, and advanced notification functionalities. Optical Character Recognition (OCR) coupled with Machine Learning allows the teams to stop making manual entries, and sometimes double or triple entries. There is a long list of other examples of the benefits that advanced technology can bring to the air cargo sector,” he adds.
Amidst the pandemic, freight forwarders, end-users and air cargo operators, etc. are embracing technology whole-heartedly as the only way possible to survive in these trying times. Experts say there have been many positive tech developments in the last few years and many tech-based start-ups have emerged providing excellent services to the logistics industry/air cargo sector, making operations smoother and fast and with zero human intervention. However, the adoption process is still relatively slow in developing markets like India. High costs, greater dependence, less awareness, manual operations are considered to be some of the reasons.
“In the global logistics market, many new technologies are being utilised whilst in India, the adoption process is relatively slow. The supply chain is predicted to play a key role in increasing customer satisfaction, effectively predicting product demand and making better use of the resources in hand. As a result, the demand for accurate higher cognitive processes and forecasting is on the increase. An increasing number of logistics professionals are now keen to interpret data trends to not only anticipate stocks but also to optimise capacity and asset utilisation. However, the very pace of embracing automated operations isn’t sufficient to date. The Indian logistics sector is more enthusiastic about normal modes of operations, by choice, and is vehemently hesitant about up-skilling their technological skills and awareness,” briefs Chug.
“Even as the industry understands and supports many of the advantages of today’s technologies, some questions remain the same, on how they’re going to acquire it and who will help implement the improvements,” he adds.
Cargo Flash aims to join such implicit dots through its integrated and intuitive systems and supply end-to-end software solutions together with the flexibility of handpicking the system, supporting the need of the industry.
“CargoAi.co operates as a Saas marketplace,” Matt says, and therefore, they strive to gain user adoption, which depends on a variety of factors that include the adoption and use of tech solutions in the B2C environment, the cost of manpower, the overall appetite for technology. “In India, specifically, we certainly see many of these factors at play. Overall we are quite pleased with our development in India.”
“Tech companies with simplified flows, immersive user experience, cost-effective implementations, and far reaching outcomes provide a competitive advantage,” Agrawal puts across.
“Looking at the context surrounding Indian logistics, there are a lot of positive developments and attitudes towards technology adoption, with many startups and established companies, including WebCargo that have made a positive start in India,” states Agrawal.
“A lot of logistics organisations are still working from home and while this helps speed up adoption with certain technologies, rolling out any large-scale transformation in logistics is always a challenge! However, the biggest challenges can also be seen as opportunities. Technology that is transparent and responsive, such as WebCargo, can address these issues by providing simple-to-use tools providing visibility into carrier capacity and pricing in real-time.”
Millet use of technology hinges on knowing how to manage technology efficiently and overcoming barriers that come with integrating it:
- First, some people do not necessarily want to change, and want to stick to their existing way of working. A digital transformation will be as fast as the weakest link that needs to embrace it. In that respect, change management plays an essential role when it comes to implementing new technologies. Deploying a technology or a new digital solution is not only about making sure how to use the functionalities. It goes beyond that: it is about changing old habits, and integrating that technology in day-to-day activities to adopt a much more efficient way of working. Companies have a tendency to consider change management as the second priority, whereas it is actually an essential part when implementing a new technology.
- Second, some of the actors in the logistics chain still have heterogeneous requirements. Take the example of e-freight; one can theoretically stop using paper documents to accompany your shipments. But the customs authorities of certain countries still require that packing lists, certificate of origins, and even AWBs are printed prior to performing the customs clearance. Paperless is in that case a wishful thinking, whereas the technology is available to make it possible.
Tarade agrees. “One of the constraints I see is integration between systems; it is often seen as a big hurdle. While having a simple MVP-type of integration is something that can generally be done quickly without large investments. And it’s the best way to see whether something would work in real life or not. Another issue lies with the data; it does not make money in itself. Having a modern data warehouse and clean data is essential, but it does not always get the same attention as the rest. If you go to your board, it’s always easier to ask “I need to invest X$, because I will get a return of 3 times X$” than to say ‘If we don’t change our database and invest in core systems, we will not make money immediately but we will lose XXX$ in the future’.”
“Lastly, I think that there is a constraint that has to do with complexity. There are many stakeholders, many systems, and many things to optimise in air cargo. And we tend to neglect the fact that while there might be a solution offered by technology, ultimately it all comes down to execution, which requires a great deal of human interaction.”
Reimagining Future Supply Chains
From transportation to shipment tracking and last-mile delivery, supply chains, with the evolution of technology, end-to-end visibility, resiliency and transparency of a shipment from placement to delivery has been improved and customers worldwide are acknowledging and appreciating the benefits and opportunities being generated. With the increased usage of technology, the supply chains of the future are believed to be truly more tech-friendly, resilient and efficient.
“Digitisation has the ability to connect an industry fragmented across various modes of transport and between many major logistics players, so that every step across the supply chain maintains a seamless flow of information, documentation, and of course, the physical flow of goods,” notes Agrawal. “The ideal way to make that happen is through technology that let customers, logistics service providers and carriers plug into a system which connects them all and creates a standard which can be adopted across the globe. This will help create more reliable processes, enabling better planning and execution of freight and shipments while allowing flexibility for unpredictable situations such as the COVID pandemic that we’ve been experiencing from the last couple of years.”
Chugh understands how digital transformation of supply chains enables resilience through prompt management. “Increased visibility and transparency of operations allows decision-makers to determine real-time judgment that affect the result and help prevent disruption. Predictive analytics, along with AI, are often very effective for recommending optimised inventory levels, restocking inventory, and growing operational efficiency alongside warehouse optimisation. Similarly, the key benefits of incorporating technology within the air cargo domain are broadly classified into the aspects of speediness, seamlessness, smartness (predictive) and transparency.”
“The supply chain is now seeking a single-system solution that encompasses all the operational and administrative facets, and which become more beneficial when executed via technology.”
Here, Cargo Flash comes into the image, Chugh says, by providing integrated, intuitive and seamless software solutions that incorporate all the possible operational and administrative solutions for the air cargo domain. “Our single-platform solutions allow the aviation stakeholders to access real-time information, which is poised to become the forerunner for proactive data analysis, resulting in better air freight transport management,” adds Chug.
Future supply chains will have a new platform, IATA ONE Record which will provide one single source of truth for a shipment. Explaining the process, Petot shares, through the platform, information will seamlessly flow across the supply chain, including manufacturers, shippers, importers and any other players in-between. “Data will also seamlessly be available across multiple modes of transport and most importantly, its quality will have greatly improved. Thanks to secure interoperable systems.”
Millet says, “The supply chain of the future should see some of the processes completely digitised and paperless. What can be digitised should not remain manual, however not everything can be automated.”
“I see several focuses for the coming 5 to 10 years,” adds Tarade.
1. There are still many areas to optimise. At Wiremind, we see that Flight Planning, ULD buildup, Dynamic Pricing, etc. are things where we can bring a lot of value.
2. There are many challenges to face. Investments that are made now in technology will pay off. Right now, the market is peaking, but we all know cargo works in cycles – we have to build an industry that is more robust, and takes advantage of the peaks to ensure that when the market is low, we have solid foundations that can handle turbulence.
3. Sustainability is not a ‘priority’. For us, it’s just like safety. That means it is the condition with which we can operate in the long-term.