Over the last 5 years you could not attend a conference in air cargo where ‘digitalization’ was not one of the key topics. The most common term used during these conferences was
‘dinosaur’: are we a dinosaur in a digital world?
It is true that compared to other sectors like automobile, banking and even travel, air cargo has been lagging behind in terms of digitalization, despite the integrators and the increase of eCommerce. But now, Covid-19 acts as an accelerator, holds CEO Arnaud Lambert of CHAMP Cargosystems in this guest contribution.
The slow digitalization is seen not only in the sluggish adoption of the eAWB that has not surpassed 70% for the last 10 years, but also the use of Cargo XML which is in practice less than 0.5%
of all EDI traffic in a world where Cargo IMP (unsupported since 2015!) surprisingly remains the standard of information exchange between the actors of this industry.
Corona as booster
Market drivers for digitalization in air cargo have not changed (efficiency, customer experience) but the current Covid-19 crisis is certainly going to give it a boost.
In ‘normal times’, 50% of airfreight moves in the belly of long-haul passenger aircraft, yet today, 85% of the world passenger fleet is grounded… however, demand is there, even if lower than usual. Aside from medical shipments replacing industrial freight, confinement is also boosting eCommerce which will grow its share in air cargo and further drive the standard in customer experience, all based on a digital experience.
WfH is eye opener
Confinement is forcing companies to reinvent business models, and not just that of your local restaurant which has now turned into home delivery or all these small businesses discovering the importance of being visible and eBookable on the internet.
What can you do when you staff is not allowed to come to the office? What is happening to your quote-to-cash process? What does your customer experience these days? How is your ease of doing business with your partners that are so essential for you to deliver your own service?
Working from Home (WfH) is certainly an eye opener for many but running your operations by emails and video conference has its limits. Clearly freight will still need to be handled physically, but there are many areas around the physical process that can benefit from digitalization.
Contactless business environment
Governments are these days finetuning their ‘confinement exit strategies’ and experts are arguing between ‘V’, ‘U’, ‘L’, ‘UU’ shapes for recovery when Asia is dealing with the risk of a second wave of Covid-19. One certainty is that for the upcoming months (years?) we will be working in a ‘contactless’ environment, where human contact will need to be minimized and/or highly regulated for health and safety reasons.
This is where digitalization comes back in force: eBooking platforms, track and trace solutions, digital customs or security lodgment, digital quote solutions, electronic invoicing and cash collection, mobile applications, digital warehouses, chatbots for customer services… these are a few examples of existing solutions that have so far been slow to be accepted in this industry but which are available and proven.
It’s now or never!
It is true that most of the actors of air cargo are nowadays in survival mode due to the extent of the crisis. Cash is scarce and staff is prioritized on business-critical operations.
Short term, we see a slowdown of digitalization initiatives due to lack of cash and staff availability. Nevertheless, this unique and challenging period we live in confirms the potential of digitalization in the air freight supply chain. Any company that takes the opportunity to further digitalize its business during this crisis will have an advantage at the moment of recovery, when the challenge will be in balancing demand and offer and where speed, agility, transparency and customer experience will be true competitive edges.
Let me conclude with a live case: JAL Cargo implemented a complete, new digital process for its entire domestic freight by means of an internet portal, mobile app and extensive internal process digitalization in early April, during the peak of the Covid-19 pandemic. This is going to position JAL uniquely in the new ‘contactless world’ to come.
Digitalization in air cargo is more important than ever for the future. Let’s not lose sight of it during these challenging times.
Guest article contributed by Arnaud Lambert - CEO CHAMP Cargosystems
CHAMP in short:
CHAMP Cargosystems is headquartered in Luxembourg and operates offices in London, Zurich, Frankfurt, Manila, Singapore, and Atlanta.
The company provides a comprehensive range of integrated IT solutions and distribution services for the air cargo transport chain. The portfolio spans core management systems, messaging services, and eCargo solutions. These include applications to meet customs and security requirements, quality optimization as well as e-freight and mobility needs. The products and services are known under the Cargospot, Traxon and Logitude brands.
The company currently serves over 200 airlines and GSAs, and links these with some 3,000 forwarders and GHAs worldwide.
We always welcome your comments to our articles. However, we can only publish them when the sender name is authentic.