Air Cargo Digitalization in Global Air Freight Forwarding Industry: Innovations to Follow in Times of COVID-19
Coreteka as a company that specializes in logistics digital solutions decided to enlighten the current situation in global air freight forwarding industry at the end of 2020.
Global air freight forwarding industry, along with other transportation sectors, play a large role in limiting the spread of airborne diseases. COVID-19 lockdown, travel restrictions and subsequent economic crisis have resulted in a dramatic drop in demand for air freight forwarding operations. Bankruptcies or acquisitions among large companies had a negative effect on air transport market share in world trade.
We are living in a globalized environment. Cargo transportation is essential for smooth operations of the Global Air Cargo Supply Chain. Global Supply Chain and Global Air Cargo Supply Chain are completely integrated. On account of flight bans and cancellations from the times of the beginning of pandemic, supply chains disruptions have occurred.
At the normal pace of the economy, 50% of global air freight forwarding operations are transported on freighters, and about 50% — in passenger’s bellies, or passenger aircraft bellies. This has been the case for about twenty years, and it only goes up and down by 2-3 percent.
In March, up to 90% of wide-body capacity on the passenger side was grounded. And the majority of them are still grounded. Governments had to provide about 160 billion dollars of support to airlines during lockdown. So, you can imagine the impact of the global crisis on the air capacity side!
Depending on demand, freight forwarders have launched regular flights of cargo planes to send oversized freight. These air freight forwarding operations primarily follow key trade routes, though we can notice the inaction of cargo planes in those hard times too. By November, freight capacity has been cut by 50.0% in the Middle East, by 46.5% in North America, by 54.3% in Europe, and by 55.4% in Latin America.
To prevent a complete stagnation in the activities of global air freight forwarding industry and support the continuity of the trade ecosystem, airline executives started utilizing passenger aircraft to maintain air freight forwarding operations. Pax-to-cargo solution allows to increase the area for cargo carriage by loading it on the passenger seats or by removing passenger seats. That minimizes the maintenance and operating costs of parked aircraft.
Around 20 airlines were ready to use their passenger aircraft for specialized cargo missions. For example, American Airlines sends medical supplies, telecommunications equipment and electronics between the USA and Europe in that way by their aircraft.
Air freight traffic is outperforming passenger traffic as a result of the significant loss of commercial airline capacity. But a share of dedicated air cargo transportation is not enough to increase capacity to pre-pandemic levels with around 20% of global air widebody capacity. Reduced capacity and increased demand took the prices to record levels.
Pandemic actually has shown us that IT technology can be extremely helpful. Quite a few businesses in global air freight forwarding industry have also been compelled to think about ways of doing business more effectively. Those who are proactive will gain the advantages in the nearest future!
Digital transformation of air freight forwarding operations
New health and safety regulations created a “contactless” environment, and made popular the remote-controlled devices that have accelerated the modern transformation of air freight forwarding operations.
If we look at the processes of global air freight forwarding industry in general, they still have inefficient regulations. Digitalization of air freight forwarding operations is the method to be competitive, become more efficient, increase the earnings, reduce expenses and serve the customers properly.
Digital customs, eBooking platforms, tracking decisions, digital quotes solutions, electronic invoicing, mobile applications, digital warehouses, sensors and data loggers, chatbots for customer services are the most important air freight forwarding IT solutions that work on reducing the negative influence of lockdown on global air freight forwarding industry.
Air cargo digitalization improves air freight forwarding tracking and supply chain visibility through Artificial Intelligence, API, analytics, cloud computing, blockchain and Big Data.
Airlines, freight forwarders, airports, ground handlers and charter operators are playing their role in finding IT solutions to transform their air freight forwarding operations into the digital arena. Digital solution providers, in turn, are trying to produce new software and redesign current platforms.
The innovators hope that the airports will be able to operate virtually with very less direct human interaction with next generation community systems. Air cargo digitalization is also the way to reduce manual intervention between the parties. Even today global air freight forwarding industry relies on a paper-based process, and this leads to poor data integration and high chances of data error.
Electronic Air Waybill solution
The International Air Transport Association (IATA) has entered into the digital information space more confidently, because Covid-19 reinforced the need for quicker progress in this direction. More than ever it is substantial to facilitate air transportation management and have transparent access to prices and booking tools.
One of the great advantages of air cargo digitalization is the ability for closer cooperation between all the supply chain participants. Electronic Air Waybill, eAWB, is an end-to-end document throughout the Global Air Cargo Supply Chain that provides detailed data about shipment itself, the carrier’s terms and conditions.
eAWB provides airlines, freight forwarders and customs authorities with one standard for the automatic electronic exchange of air freight forwarding documents, resulting in more reliable and more economical cargo transportation.
Benefits of the eAWB for airlines and freight forwarders include the following:
- Better access to electronic information;
- Accelerated regulatory compliance;
- Added connectivity and customer visibility;
- Improved accuracy and easier updates in the shipping process;
- Increased security and ability to maintain an audit work.
The newest communication channel in air transportation
EDI (Electronic Data Interchange) communication channel has replaced paper documents and excluded manual errors by automating B2B communication. It played its role in better responsiveness to customer and market demands, real-time visibility into transaction status in global air freight forwarding industry at the end of the 20-th century, but contemporary technological companies, among which is Coreteka, provide new API-based solutions. It is hard to add functionality to an EDI since its functions are usually defined beforehand, and API is more flexible.
Thanks to Application Programming Interface, logistics providers can now easily provide real-time shipping data with their third parties through an interconnected network of applications. It enables participants to digitally connect and collaborate across the shipping supply chain ecosystem.
API’s have made everything in the effective management of supply chain visible, trackable and traceable. The main functions of API are:
- Full integration (API’s can model themselves easily around updated systems);
- Real-time updates (API’s give users the latest information without any abruption);
- Connection to the Internet network (you have the possibility to instantly connect thousands of users to a platform and operate with your data in real time).
One more digital transformation initiative is the integration of internal and external information of air freight forwarding operations in the strong cloud technology system. All data can be accessed from a single source, providing real-time visibility and security to customers.
Air freight forwarding IT solutions with extensive experience
Innovative IT solutions make mobile strategy implementation very important in the air cargo ecosystem. Major airlines have nowadays mobile applications that provide service information to cargo agents and customers for checking flight status and managing airway bills. Mobile technologies allow situational awareness and better resource management.
An interconnected network of air cargo information will facilitate data exchange processes via blockchain. Airlines and technological startups are trying to exploit its potential, but there are no fully implemented solutions on air transport market till now.
That technology can save the airline industry billions in extra expenses to reduce cybercrime and multiple frauds, and add an extra advantage to customer experience and visibility in the future. It would create smart contracts that ensure efficient and error-free payments.
We will proceed to current examples of air freight forwarding IT solutions that we can oversee in global air freight forwarding industry. They have already been established or planned.
Lufthansa Group is moving to a multi-cloud environment for its Lufthansa Cargo system. The company is working on a project, where data is easily and transparently exchanged in a digital ecosystem of air cargo stakeholders, communities and data platforms.
Lufthansa Group has also made a contactless instrument for passengers to report them about delayed baggage in mobile application. This network saves the airline on average 10 dollars for every mishandled bag.
Kale Logistics Solutions introduced a community platform for ground handling agents and freight forwarders to increase operational efficiency and customer satisfaction with air freight forwarding tracking. Accessibility and contactless methods are becoming important attributes for design.
Korean Air plans to create a revenue management system solution with a mobile application. The framework of functions (reservation, sales, terminal operations, cargo revenue accounting) will be combined in one integrated system.
Middle East Airlines has implemented a complete set of business needs in a cloud-based platform via customisable monitoring function, embracing booking, pricing, cargo operations, warehouse and ULD management, accounting.
Development of the unit load devices (ULDs) are considered as the signs of progress in air cargo digitalisation.
Unilode Aviation Solutions has devoted its efforts to manage ULD information. A system with an existing mobile application, shows data about ULDs condition in real time with access to customers and ground handlers. Bluetooth tracking tags are already switched-on in their structure to take data through a global reader infrastructure.
Majority of airlines are paying attention to transformational initiatives and air freight forwarding IT solutions, which help increase agility and offer a better service for their passengers and cargo customers. Coreteka, as the innovations partner to leading companies, aspires to operate with the latest trends in global air freight forwarding industry, implementing digital innovations in the processes of customer visibility, booking and quotation platforms.
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