Using the best and most suitable technology will ensure the entire air cargo supply chain is connected, and thus adaptable and flexible. Besides, thanks to modern technology, data can be synchronised and air cargo analytics can be analysed to find problems and take action. However, to truly optimise the entire process, both quality analytics and great decision-making is required. Hence, those that can dig through all the data provided, and create actionable plans, are going to win out in the long run.
FedEx, the world’s largest cargo airline, shipped almost 18 billion freight tonne kilometers (FTK) in 2018. Now that’s a lot of weight.
Basically, air cargo is one of the quickest and most used ways of transporting goods from one part of the world to another, or in simpler words, warehouse to customer, and its efficiency is crucial to the success of the global economy. This can be happen only when there is adequate transparency and coordination between stakeholders, enabling seamless cargo movement in the supply chain.
But it is unclear whether the industry is ready to embrace technology and take the necessary steps to eradicate the problem.
Addressing traditional logistics issues
Big data and digitisation are two of the big topics that the air cargo industry is currently grappling with. The air cargo industry has been moving increasingly into the digital realm over the past recent years, yet it is often accused of being too slow in adopting new technologies that can automate the exchange of information between the various players in the supply chain, which in turn creates efficiencies and speeds up the handling of cargo.
When asked, Narayanankutty Karayangal, Senior Director– Airfreight, DHL Global Forwarding India says, “The strength of the industry itself is a barrier,” adding that airfreight connects trade across almost all the stations in all the countries across all the continents and, to achieve this, the industry depends upon several stakeholders, from the trucking industry, airports, customs, freight forwarders to buyers and sellers to other regulatory bodies.
“Getting a common platform or understanding across all these industries and regulatory bodies spread across the world is a huge challenge. That said, all stakeholders have a common vision to bridge their individual information to the other on the pre and post-carriage activities. This vision from Cargo iQ – IATA, etc. puts us on the path of removing the barriers,” continues Karayangal.
Echoing a similar sentiment, S Senthilnathan, Group CEO and MD at EFL (Expo Freight) India says, “Orchestrating the many elements (truckers, ground handlers, airlines, forwarders and shippers) has been a constant challenge, the workflow that governs these interactions between multiple parties is still largely manual and characterised by excessive documentation.”
“The ability to synergise and standardise these workflows while creating a steady and reliable flow of goods and data has been the largest barrier to digital adoption in the air cargo industry,” maintains Senthilnathan.
Like a lot of other industries, air freight forwarding is starting to reduce the use of paper and printed materials. The arrival of apps and software for freight forwarders, that allows everything from invoicing to freight tracking to be done digitally, means that a paperless future is a possibility. Hunder Gandhi, Managing Director- Air & Sea Logistics – Indian Subcontinent at Dachser also strongly agrees to it. “Air freight cargo has evolved a lot since the paper intensive days. The industry has made rapid progress in the last few years. e-Air Waybill (e-AWB), Forwarder’s Waybill/FIATA Waybill/Non-Negotiable FIATA Multimodal Transport Waybill (FWB), House Air Waybill (HAWB), Automated Manifest System (AMS), Entry summary Declaration (ENS) are all steps taken in the right direction to automate the exchange of information.”
Most common barriers as any industry, Gandhi says, are general reluctance for change, intensive investments and training costs but the industry is well past this stage and is adopting new technologies rapidly.
While many freight forwarders have been using digital methods like e-AWB for years, online registration is currently only offered by around 60 per cent of the forwarders, online quotes are rarely given, and the ability to manage shipments online is also still in need of development for a lot of forwarders.
Today, in India, there are as many as 10,000 forwarders operating in the country, and the vast majority use little more than spreadsheets and email, if that. That lack of reliance on modern logistics systems is due to a number of factors- small margins, a reluctance to spend on non-core overhead, and a feeling that tech might get in the way of their relationship-focussed businesses.
On the other end of that fragmentation are shippers in India, who suffer from a lack of reliable data to make informed decisions on procurement and in-transit cargo movements. Because those service providers are not basing their operations on systems, shippers are often at the mercy of obsolete pricing and inaccurate cargo status. Well, that’s a critical issue.
Sam Katgara, Partner, Jeena & Company says that between the many big and small-sized players, the smaller ones are not fully computerised. “They buy software to address minimum requirements such as creating e-AWB, printing e-AWB, CSR, etc. Most of the other things are updated manually. For the benefit, or on behalf of these small-sized players, even the stakeholders are not willing to provide or suggest steps at the higher level or to the decision makers.”
Digital beyond paper
Businesses operating within the air cargo world need to collaborate so that data can be easily shared and common problems such as a delayed delivery can be easily and promptly handled. This will guarantee seamless supply chain function, from initial warehousing to last-mile delivery.
As such, one area of improvement is the level of visibility of shipments that the air cargo industry should provide to customers. This can only happen by bringing in all data from each step of the shipping process into one single platform.
As Katgara rightly says, “The industry should force all players to come into a common platform so as to connect to all stakeholders for exchanging data. This will give a complete working visibility and help in data exchange.”
Not to question, freight forwarders today are working together to continuously improve the value of airfreight for customers and expanding their solutions portfolio. The international provider of air, sea and road freight services- DHL Global Forwarding’s vision statement of providing excellence in the digital world itself speaks of the direction the company is taking. The new digital tools introduced by the company are already showing some great results with near real-time visibility to its customers who are active on the DHL Interactive portal.
Besides, for temperature-controlled cargo, customers can gain visibility of up to 45 timestamps during the shipment’s journey. This also enables DHL Global Forwarding’s customers to get a visibility of the ambient temperature in which the freight is transiting, which is very useful to them if data loggers malfunction, at times.
Similarly, leading supply chain management company EFL has invested in its own operating system and has standardised its workflows to ensure a single standard of service globally. The company has also invested in considerable middle wear applications that ensure seamless integration via Electronic Data Interchange (EDI) and Application Program Interface (API) to help generate, share and own information close to real-time as possible. This allows them to offer a level of visibility required to keep up with the pace of global trade. The EFL tech team is also at hand to build custom integration and tracking solutions, if the need arise.
More than 700 people working for IT system worldwide gives Dachser a cutting edge to provide the most secure and reliable logistic solutions to its customers.
Over the past decades, Dachser who is actve in 44 countries has invested in technologies like (EDI) and barcoding which are today established standards in the company’s core business. At the same time, the company’s robust IT environment is a solid base for maintaining data security for its customers.
According to Gandhi, “When it comes to services, we are constantly extending air freight connections between key economic areas of the world which is important in today’s volatile times. The introduction of our worldwide transport management system ‘Othello’ sets new standards in terms of offering integration and visibility.”
So far, Dachser India has rolled out Othello, the company’s transport management system, throughout its fifteen branch offices in India, as of December 2019.
For Jeena And Company, the largest Indian freight forwarder in the global market, running a complete end-to-end system which enable real-time back-end operations, operations planning and reporting capabilities has helped meet the standards of service delivery in a digitally influenced forwarding market.
Bringing in all the data
Increased transparency is important to shippers as it enables them to improve planning. It also allows companies to reduce the need for buffer stock, which in turn reduces the cost of the supply chain.
Increased transparency, gives reliability and predictability to organisations, affirms Karayangal. “The cascading effect of this is that businesses are able to manage their inventory by bringing in goods only when they are needed to increase efficiency and at the same time reduce inventory investment, space, and wastage.”
Karayangal believes information is only valuable when it is used productively. “For example, we have customers in the life sciences and healthcare sector who rely on accurate timestamps for updates to medical practitioners who are waiting for time-critical shipments. Others use our customised visibility tools to give internal forecasts to their commercial organisations.”
Senthilnathan couldn’t agree more. “Visibility offers a degree of agility previously unknown. It has given rise to agile new business models such as ‘trend based demand planning’ and ‘demand based inventory management’. Demand planners can now plan product lines based on current and projected market demand while committing to supply chain costs such as raw material and freight based on market movement. This not only leads to a reduction in working capital cost but also optimising revenue based on speed to market.”
Although transparency is important, sometimes companies can demand too much information for the sake of it.
“This is absolutely true, and we don’t consider such requests from our customers as demanding,” remarks Gandhi. Dachser works closely with its customers to design the best solutions for improving the transit times thereby helping them achieve lower inventory costs. “Our air consolidation products to/from major global markets give them a higher reliability factor in terms of transit time,” says Gandhi.
Handling agents sign SLAs with airlines to ensure goods are ready for carriage four hours after the aircraft has touched down, but then the pallets sit in a warehouse for two days as they are not yet needed. Therefore, cargo handlers need to agree on basic key performance indicators, which are measurable in real-time and where the customer can see online how we have been performing. Data can help air cargo companies reduce their own costs by taking waste out of their own processes.
Karayangal says that although contracts and SLAs are commitments to implement and execute the understandings in its true spirit and that this is the first step, commitment needs to be displayed by the stake holders by providing adequate infrastructure, labour, material equipment and documented processes for their functioning to be seamless. “The performance needs to be analysed periodically and improvement or sustainable actions must be taken.”
Accessing all the data
Another common hassle is data disconnect across various steps in air freight shipments. Data is housed in different formats and structures, which limits access for all involved parties. This can make it difficult to get the full picture of what’s going on, and thus make it nearly impossible to utilise analytics to its utmost potential.
Cloud-based systems could be used to reduce data input resource, because this will bridge application silos and make it easier to provide stakeholders with information in real-time. For companies, one of the challenges faced when creating cloud-based systems was the concern that they could be giving away valuable information. But there’s much more to gain on the airline side or with the partners by removing paper work and for this, smart data sharing is extremely important.
“An integrated system improves accuracy,” says Gandhi, adding that they can transfer information between programs or systems thereby removing the need of multiple entries of the same data, which in turn reduces duplication, saves time and aids to achieving efficiency and quality.
Dachser’s fully integrated IT systems are one such example; throughout the entire transportation process, shipments can be tracked in real time that allows all players and most importantly, the customers, to better plan these shipments and to map the physical movement of goods in a digitally driven world.
Karayangal feels the same. “The information residing on a shipper’s invoice and packing list is the one that gets reproduced on to several documents like shipping bill, a letter of credit, and transportation documents such as bill of entry, E-Waybill, certificate of origin, etc. Electronic data interchange (EDI), Application programming interfaces (APIs), Robotic process automation (RPA), shared platforms, etc. are some of the tools that may be considered to lessen the burden of manual reproduction of this information at different stages. This also ensures that updates are made available to all stakeholders at the same time,” explains Karayangal.
Everybody needs to own their own data, but they also need to share the data when it’s necessary through a defined route.
“This is one area where smart contracts based on a distributed ledger can add significant value. Information once entered can be tokenised and then made available over a secure network to participants in the network as and when needed,” observes Senthilnathan.
“Companies can also participate in an industry specific data exchange and share data and integrations based on rules that govern common transactions and activities,” suggests Senthilnathan.
However, Senthilnathan believes that getting to this step will not be easy, as it will require all actors in the air cargo ecosystem to first adopt a robust data discipline to first structure the capture, store and share the information.
EFL has invested in its own data lake and is integrating with external sources of data to maintain a holistic and data driven view of the world around us.
Katgara says, “If systems talk to each other without manual intervention, it will be easier to access information, as well as facilitating real-time data sharing with each stakeholder. With it suggested, real-time data sharing through Blockchain technology in a fully-secured environment will bring a new dimension in eWorking.”
Jeena works on cloud-based systems. The company has open API standards interfaced with various partners across the globe. Jeena’s digital solutions working involve mobility, data analytics, portal technologies, AI and Blockchain.
Respond quickly using analytics
If a company encounters challenges in the supply chain, having real-time and unified data will be useful. That’s because they’ll have the technology and big data management capabilities to address that tough question and provide a quick solution. But just having the tools and the information is not enough, one needs to have a quality analytics strategy that is able to accurately describe, predict, and prescript.
“Raw data needs to translate into information in order to make inferences and enable actions, while well-informed decisions and timely steering them is greatly facilitated by the right tools,” says Gandhi. Dachser’s in-house systems have inbuilt quality dashboards and Management Information Systems (MIS) tools which help the relevant staff to get real time information in properly crafted format.
Recognising the challenge of achieving better visibility of supply chain risks, DHL’s innovative product ‘Resilience360’ uses business intelligence and predictive, prescriptive analytics to provide customers with risk intelligence and 24/7 updates, thus keeping them informed and ready to take action to lessen negative impacts from disruptions.
Similarly, the EFL analytics team employs a hybrid approach of using time-tested data science techniques coupled with the tacit knowledge of its people who benefit from over 35 years of explicit knowledge in freight and logistics operations. Senthilnatha asserts, “Our approach is to blend seasoned operational analyst with data science so that we are better able to connect the dots across the prescriptive and predictive analytics we employ. We analyse all aspects of our business, from operations, procurement to our impact on the environment and aim to ensure every decision taken is data-driven but connected to the right context.”
For Jeena, like the rest, data analytics combined with data science is the strategy. The company has tools like Business Object and Tableau which helps in producing various types of analytical reports. “With an internal data analytics team aligned to our working, we are able to feed in the right information from the present and future,” says Katgara.
Going forward, Katgara says, real-time data analysis and predictive planning is the way.
Never be settled
Harnessing the power of air cargo analytics to master the supply chain is not a set-in-stone process. It requires staying up-to-date in terms of technology and data, using analytics effectively to connect the pieces and facilitate decisions, and always being prepared to respond and adapt.
More than ever, now is the time air cargo supply chains need to be nimble, as competition is fierce. To do so, cargo carriers need to make use of the technology that has arrived with Industry 4.0. From Drones and Artificial Intelligence (AI) to the Internet of Things (IoT), disruptive technology is arriving everywhere in the logistics world, and those that don’t use it will be left in the dust.