ACH – Part 4 - Unilode on the Way to Reaching the Next Level

The industry has room for improvement, measured by the track and trace visibility common to the integrators. That’s a key statement delivered by the new Unilode CEO.
Paris-born Benoit is in his new position at Unilode only since three weeks, however, having worked in various managerial functions for DHL at different markets and places and as a strategic consultant for McKinsey and Company in the transport and logistics field, he’s anything but a newcomer to the industry. Nevertheless, his first impressions he got after looking through the magnifying glasses a bit closer at the cargo industry are rather interesting, he tells. 
His points: Measured against the integrators, the air freight industry needs to be enhanced, seen by the rather underdeveloped data flow and control which influence the track and trace quality negatively. This lack of transparency jeopardizes the efficiency of processes, hinders consistent improvements, affects the safety and is a stumbling block for successful cooperation between all parties of the supply chain.

Overcoming untenable conditions…
The good news is, Benoit believes that the desire for transformation is there. But turning wishes into reality often takes a long time. Time the industry doesn’t have any more or else the cargo players could be overtaken by the leading new integrators, Amazons and Alibabas of this world.
So what is to happen and how can he push Unilode further up front?
“We need to continue to transfer the standards that are common in the Express world to our industry,” he says. For instance, implementing standard operating procedures all across the globe, throughout all players. This goes hand in hand with automated messaging systems to know exactly and at all times where the Unilode managed containers and pallets are located. Each ULD must be tracked along the chain from origin to destination and across the entire network. Today, a lot of this is done manually and not systematically, leading to poor messaging, therefore suboptimal ULD utilization rates, loss of sales by the carriers and extra-ordinary capital expenses. Consequently, this means that the whereabouts of at least 15-20 percent of empty boxes are undefined globally. An untenable condition.

… along with well-trodden paths
To increase this quota, procedural standards are indispensable and must be implemented fast. “The first player that succeeds in setting these operational paradigms will win the race,” he notes. This because, his product will be of superior quality resulting from data visibility and procedural standards. This is no rocket science seen by the success of the integrators. What’s needed is the will to change things and leave well-trodden paths behind.
Breaking these rather overarching industrial aspects down to Unilode’s needs, Benoit announces taking the next step. “Up to this point our focus was on increasing the pool of assets, extending our geographical presence and building state-of-the-art planning systems, leading to roughly 120,000 ULDs and 50 repair stations managed across the globe.” Next step would be to integrate his company’s value proposition in the airline’s operational processes. “We intend to trigger a catalytic process to modernize our client’s business applications by becoming an integral part of their daily doing.” Cost control and revenue enhancement are so critical, so that concepts like dynamic pricing and revenue management well known by the industry should be developed in that field to address the capacity at peaks, utilization and network imbalances.

Big data and total transparency of processes are the catchwords
Finally, he compares the contract logistics industry with the traditional cargo business. Most companies have outsourced their non-core activities massively since the 80ies of last century. In contrast, 70 percent of the ULDs are still managed in-house by airlines. “Which shows how conservative carriers still are, although it is inefficient and more costly compared to a full outsourcing model with MRO in a pooling environment.” 
“At Unilode, we can help make ourselves and the industry fit for the future, for instance by introducing innovations to manage ULDs and pallets even more efficiently,” Mr Dumont explains. “There is currently a window for opportunity in our industry created by external factors like the digitalization, enhanced safety regulations and the boost of e-commerce which we want to exploit together with our customers to mutually reach the next level,” Benoit concludes.

Heiner Siegmund