The often volatile air cargo industry is now seeing significant growth in cross-border e-commerce trade. This could very well transform air cargo, guaranteeing a future for the industry. However, as IATA Global Head of Cargo, Glyn Hughes, said in 2015––when the industry had first experienced consistent growth––“The industry cannot use these figures as an excuse to stand still. A comprehensive structural transformation is necessary if air cargo is to have a profitable, sustainable future.” And collaboration is at the center of it all.
The development of the industry has led to an equal increase of complexity in the supply chain. The large number of trading partners, systems, and the provisions of the digital space all emphasize the indispensability of collaboration. To effectively manage a large network of disparate and globally-dispersed regulators, carriers, forwarders and other logistics providers, we have to rethink the process. It must be approached strategically to enhance cohesion and enable industry cooperation.
Easy Integration of Air Cargo Stakeholders and Systems
Air cargo needs to be more integrated. To allow real-time communication and exchange of data between stakeholders, the existing systems are not enough. By focusing on both intra-organizational integration and external integration of individual pieces of the supply chain, we can expedite the process and make the supply chain more efficient. But forcing teams to use new processes can be a challenge too.
While it’s important to share data, simply passing it along won’t suffice. Stakeholders must also be in close collaboration across the supply chain. More importantly, they should be able to use digital solutions to work together. To avoid creating more challenges, industry players must be able to easily on-board an integrated system. This will ensure a more seamless and time-conscious integration by cutting off training time as well as ensuring they work comfortably.
Also, instead of having bilateral exchange of data, there should be a centralized and harmonized alternative. With bilateral exchange, there’s no guarantee of the quality of data as each participant inputs what they have and uses whatever they’re given. But if the data is pooled into a central location, stakeholders can easily vet and improve on it. They also reduce the exchange time.
Centralizing sharing of data will further enable the linking of disparate data sources in order to have real-time data which is accurate and actionable compared to fragmented and isolated.
Shared Air Cargo Processes
Along with seamless integration and easy access to data, participants must also work in harmonized processes. Air cargo carries need to create workflows that link all participants in a continuous process. This helps improve collaboration on those processes through quick sharing of information and decision making.
Again, technology can give a big boost here. By using IoT devices like Automatic Identification Systems (AIS), Global Positioning Systems (GPS), weather monitors and sensors, companies can transfer large amounts of data to a centralized system, giving the supply chain visibility. This data can be collected in real time and transmitted to respective teams on the spot. This ensures quick decision making.
Through the shared processes, teams can monitor processes and use the real-time information to identify and manage exceptions including otherwise unpredictable circumstances.
The transparency of processes for upstream and downstream partners also creates visibility for secondary and tertiary partners. For example, early transparency on planned pick-up volumes can lead to consolidation opportunities with the forwarder.
The Rising Demand for Air Cargo
The demand for air cargo supply is rising, not just in the U.S. but globally. For instance, Singapore and Dubai saw a 6.3% and 3.4% increase respectively as Russia reported a whopping 30%. So, while it’s great news for the industry, to be able to see sustainable growth, the demand requires equal efficiency in supply.
Every element in the air cargo supply chain must be in close contact with the next. Thanks to digitization, collaboration can be made much easier. Inventory and transportation costs will reduce significantly, while production processes will be accelerated and delivery times decreased.