Air cargo plays a major role in the global economy. In 2016 alone, $6.4 trillion worth of goods were shipped via the skies, making up 35% of world trade by value. From getting vaccines to hospitals to shipping auto parts to manufacturers to delivering goods to households, we depend on the efficiency of air cargo and e-commerce.
Today, customer demands for more reliable and predictable services are reshaping the air cargo industry. After all, according to research by McKinsey & Company, 25% of e-commerce customers would pay a premium for same-day delivery. This number is only expected to rise. Higher expectations from customers are why the e-commerce sector has been consistently improving delivery times. But there’s still more work to do.
To make sure a product gets to the customer as safely and quickly as possible, air cargo carriers must focus on eliminating bottlenecks, like the complicated last few miles of delivery. The good news is that there are solutions to speed up the final step of the air cargo delivery process. Here’s how air cargo carriers are already making that happen and how they can continue on the right path.
Creating an Omni-Channel Air Cargo Experience
Air cargo carriers have recognized that the lack of an integrated system prevents them from increasing delivery speed, reliability, and transparency for customers that are demanding just that. An omni-channel logistics ecosystem is especially beneficial for the last mile of delivery, where air cargo carriers can lose some control over the operation.
As Jonas van Stekelenburg, Amsterdam Schiphol Airport’s cargo director, says, “Everyone has their own data center—the shipper, the handler, the trucker, the airport, the airline—and this is one of the first problems. If you really want to achieve omni-channel logistics, you have to access one data-set between all parties.” Clearly, there can’t be data silos—because that only slows things down. Integration within one unified ecosystem is key to enhancing operational efficiency.
The good news is that the relevant technology is in place already. Industry players are creating or adopting the right solutions to bring the omni-channel experience to life for its customers. For instance, Mercator recently unveiled an intelligent cargo ecosystem that connects people, goods, processes, and data in an effort to digitize and modernize the entire industry.
Offering Piece-level Tracking
Thanks to e-commerce, gone are the days of just wanting to get updates on whether or not a package is ‘in transit’. Both B2B and B2C customers want to know exactly where their shipment is. They want to be sure that it’s getting to their business or home at the time agreed.
Too often, packages can get held up in that final mile. The air cargo carrier will report to the customer that the package has reached its destination city, but it hasn’t been delivered to the customer yet. A way to fix this roadblock in the final mile is piece-level tracking, which can give clients exact locations and arrival estimates for their orders.
Several airlines have enhanced tracking capabilities to satisfy these growing customer demands and make the last mile more efficient. For example, Amerijet uses GPS to track high-value shipments. Air Canada, in an effort to keep temperature and humidity changes from affecting sensitive shipments, is using IoT to manage environmental conditions, which becomes useful when products move from plane to truck (common during the final leg of a shipment, especially in e-commerce).
The International Air Transport Association (IATA) has also been promoting the continued innovation of interactive air cargo (i.e. smart cargo). This would modernize the entire cargo process and allow carriers to solve issues in real-time. It would also enable air freight companies to guide cargo through that final leg more quickly and safely.
Making Strategic Air Cargo Partnerships
Especially in e-commerce, customers want speedy delivery and they want it to be affordable. This is difficult to do alone. Amazon seems poised to accomplish this for its e-commerce platform. With a $1.5 billion investment in an air cargo hub, the company is beginning the process of becoming a carrier itself (and not just an e-commerce company). Even still, Amazon has a significant way to go before it can do it all alone.
For most air cargo carriers, logistics firms, and e-commerce companies, the best way to achieve both time- and cost-effective shipments is through partnerships. As Jonas van Stekelenburg explains, “Everyone now has to make a bet—who’s going to work with whom and who’s going to share with whom? That’s a very big question and a difficult one.”
One cargo carrier that’s doing a good job at making partnerships is Swiss WorldCargo. In an effort to improve the last mile of delivery, the carrier not only has partnered with Swiss Post, who is very familiar with the final leg of shipments, but also Matternet, a logistics drone manufacturer who can automate that last mile. The three are combining their technology, capital, and experience to see how they can quicken delivery times and decrease costs. Their research could prove useful not just in improving e-commerce operations, but also for local emergencies that require immediate delivery of certain supplies.
When it comes down to it, those carriers that continue to make strategic partnerships will win over more customers due to increased speed, transparency, and reliability. That’s because they’re the ones that are making full use of internal and external resources.
Using a Variety of Delivery Methods
During Singles’ Day in China in 2017, e-commerce revenue reached an eye-popping $17.8 billion. In the United States, the Thanksgiving to Cyber Monday sales event rang in $12.8 billion in online sales.
These days, delivery times aren’t measured in days. They’re measured in hours. To stand out, air cargo carriers, logistics firms, and e-commerce companies must perfect the final leg of delivery. There is no room for any delay. Big money isn’t just at stake, the happiness and well-being of customers are, too.
This is why a variety of solutions—both traditional and automated—are being used. National post offices and logistics companies like UPS and DHL remain a natural partner for air cargo carriers to get the package into customers’ hands. That’s because they’re experts at local ground logistics.
Automated technology, like drones and autonomous ground vehicles, are being developed and adopted at a rapid pace, and look to be the future. That’s why logistics leaders like UPS are investing heavily in autonomous drone delivery. They are increasingly viewed as the key to making delivery faster and cheaper.
In urban areas and emerging markets, bicycle delivery has become a go-to method for speeding up the final mile of delivery. For instance, in India, e-commerce giant Flipkart is using bicycle delivery to lower shipment times.
Championing the Last Mile
In the air cargo industry, the last mile of delivery is a sprint. With the right strategy, processes, and technologies, air cargo carriers can optimize the last mile of delivery and get products to customers’ doorsteps faster than ever. This will allow them to break apart from the competition.