Digital Transformation: What used to be a fashionable, futuristic buzz phrase, finally started gathering speed during the past couple of years, and now COVID-19 has catapulted the topic to almost every company’s boardroom table, given its key bearing on the current Darwinist “Survival of the Fittest” environment. STAT Times hosted a webinar “Accelerating Digital Transformation in Freight Industry – the COVID-19 Impact” on 20MAY20. Here are the bits and bytes.
Hosted by STAT Trade Times Editor, Reji John, the panel included Angela Hudson, Head of Transformation at American Airlines, Sara van Gelder, Cargo Digital Development Manager at Brussels Airport
Company, Ashok Rajan, SVP Global Business Head Cargo & Logistics Solutions at IBS Software, Moritz Claussen, Founder and Managing Director at cargo.one, Maximilian Schaefer, Co-Founder and
Managing Director at InstaFreight and Amar More, CEO at Kale Logistics Solutions. A broad spectrum covering airports, airlines, freight forwarders, and a host of IT platform solutions. That in
itself already makes a statement on the complexity of the entire Digital Transformation topic when it comes to air logistics – even without the other fractions involved, such as customs, ground
handling, various authorities, for example.
From Complex and Aging…
American Airlines (AA) is coming to the end of a 3-year “rollercoaster” project which tackles the replacement of 91 systems, the oldest of which are 47 years old, with IBS’s iCargo solution already favored by around 30 airlines in recent years. Whilst AA faces the task of currently training up its shop floor staff in a virtual rather than hands-on environment, at a time when shipment numbers are down and conditions are abnormally challenging, the timing for a new single system is just right. AA is already seeing the benefits of proactive information analysis allowing it to operate more efficiently. Angela Hudson states the following points as factors to a successful digital transition: pick the right (IT) partner, explore all options, keep staff and partners on the journey with you and, most importantly – “throw away the past and change your perspective on how to do business!”
… to Community and Agile…
That change in perspective is something that Brussels Airport and its partners are already well familiar with. Sara van Gelder cites nexxworks, pointing out that we are living in a “VUCAIN” world. VUCAIN stands for Volatile, Uncertain, Complex, Ambiguous, Interdependent, Nested. While the first 4 elements are difficult to influence, the last 2 are key. Nexxworks says “The VUCAIN world [is] where your health and wellbeing is interdependent with the health and wellbeing of others and nested in the health of the planet,” and Sara emphasizes the need for community thinking, saying: “the health of your company is nested in the community.” Sharing is caring when it comes to information and efficiencies, and while the BRUCloud proved its worth pre-corona already, the transparency it offers to all those involved at BRU airport, is all the more helpful now in an environment with ever-shifting schedules, capacities and regulations.
Driven to Digital
Something that cargo.one can confirm, having seen a 199.47% growth explosion since the start of this year in the number of customers wanting to use the multiple airline booking platform. The reason being, Moritz Claussen says, that given the major disruptions caused by COVID-19, “Freight Forwarders could no longer rely on airline-distributed rate sheets, flight plans and capacities, and information and rates were changing by the minute,” so they started “looking for better alternatives to do bookings and found them in cargo.one and other online booking platforms.” Digital Transformation “is very much a driver and will be a life-line for many freight forwarders and airlines for an industry that relies on thin margins,” he adds.
InstaFreight, a European-based purely digital road freight forwarder, claims “Digitalization is core to our DNA” and uses information transparency to improve transport processes. Automation allows InstaFreight to offer lower rates and indirectly supports partners to lower their costs, whilst not compromising on quality. In times of COVID, sourcing capacities and knowing where trucks are is all the more important, and given its digital set-up, Maximilian Schaefer points out that his company was quickly able to set up a highly competitive China-Europe road-feeder service recently to alleviate the stress on air cargo capacities (CargoForwarder, 13APR20), and is working on a similar rail solution.
From Digital Distancing to Paperless…
Alleviating stress is something that Kale Chief Entertainment [sic!] Officer, Amar More offers both in his jovial personality (viz the screenshot of his presentation), and in his company’s IT solutions. He cites his own experience of seeing staff exceed his expectations and provide “100% productivity working from home,” having adapted to the shutdown circumstances like a “fish takes to water” and says that this gives him hope for the future success of Digital Transformation. Outlining 4 factors engendered by the pandemic, namely 1) that the virus is known to remain on paper for up to 4 days, 2) social distancing requirements, 3) shutdown rules, and 4) reduced revenues, he turns these into corresponding drivers: 1) go paperless, 2) question and rethink existing physical processes, 3) enable remote working, and 4) work on smart savings. He points to a recent success where a major cargo charter operation decided within 3 days to utilize Kale’s PING! solution which converts PDF generated files into messaging that can be read by airlines or handlers, which massively helped to solve the urgent issue of a lack of manpower and time at certain destinations.
… & Contactless in a Digital EcoSystem
Ashok Rajan also pointed to the need to go contactless, and to really look at where automation can remove certain physical processes. At IBS, Artificial Intelligence and Machine Learning are one of 4 core focuses. Also with a view to supporting intelligent decision making, especially now in a world that is “on its head” and where forecasting is nigh on impossible and “reduced to 2-3 months at best, while in the past companies would plan 18-24 months ahead, so the ability to make decisions in a completely different environment and an ongoing changing world, is […] sitting on the minds of most cargo operators today.”
With regard to digital solutions, he stresses that while in the past, a customer would decide on a service provider amongst the “many islands of innovation” available on the market, and months of project collaboration would follow, that “lead time to market is no longer a luxury that is available, so digital service providers need to come together.”
The ideal, and one that his company is working towards, is “one big digital ecosystem with collaborative platforms for a seamless operation – where customers can choose modules they require from the single ecosystem.”
Towards the end of the webinar, Ashok Rajan said “I was reminded of the last physical panel I did on Digital Transformation. It was at Air Cargo India, in Mumbai, where I said that we probably need a sledgehammer to move digitalization forward, […]. I didn’t wish for a sledgehammer as big as this, though! I think nobody did, but from the lens of digitalization, I hope this will push things forward.”
The panel consensus from the start, was that disasters drive progress out of necessity, as they pointed to 11 September and the Yemen bomb plots for examples in recent air cargo process changes. Company reactions to crisis are two-fold: those who will delay decisions as they try to sit things out, and those who accelerate decisions and move ahead.
For certain, the digital health of any company within the air cargo industry, and its flexibility to connect, share and adapt quickly and smoothly, will determine its post-corona mid- and long-term survival chances. Digital Transformation is a core part of the “new normal”, and yet, we are still very much at the start. Companies need to clean up processes and ensure relevant data quality, so that the benefits of Big Data, Artificial Intelligence and Machine Learning can be fully utilized – and, at some point further along the line, perhaps Blockchain, too.
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