…states Cédric Millet (CM), President of CargoTech and Chief Strategy & Digital Officer at ECS Group, referring to various digital solution providers on the market. CargoForwarder Global (CFG) spoke with him and Ed Gillet (EG), Co-Founder of CharterSync, the CargoTech Group’s newest member, about the collaborative digital solutions the group offers the market and how to convince those people who tend to resist innovation and transformation, to support new business avenues.
CFG: Ed, CharterSync recently became the fifth member of the CargoTech Group of companies, alongside CargoAi, Wiremind, and others. How does CharterSync benefit from this
EG: Joining CargoTech will enable us to collaborate with the very best digital innovators in the air cargo industry. Although we will be operating independently to the other members, we will have the unique advantage to pool together diverse perspectives and expertise to create innovative solutions that drive mutual growth. We are very confident that this collaboration will greatly propel our growth trajectory on a global scale.
CFG: Over to you, Cédric: Ed speaks of ‘innovative solutions’, but people often shy away from changing established working patterns. Isn’t this behavior a big stumbling block when
transforming business processes from old to new? And if so, how can CargoTech and its affiliates shift this inertia?
CM: There is a clear difficulty to embed digital solutions in the day-to-day processes, for various reasons.
First of all, every transformation leads to uncertainty and skepticism regarding the future, since people naturally have difficulty to change the way they “always worked”. Secondly, because there is always a fear to lose one’s job. Hence, the most challenging fact CargoTech is facing in digitalization, has nothing to do with technology. It is linked to Change Management and Adoption.
It’s a matter of explaining, training, accompanying, and showing the value in changing the way people work. At the end of the day, if you want to attract talent and be able to recruit the new generations, you have no choice but to transform, digitalize and make the job interesting and less manual or transactional.
Obviously, the various CargoTech companies accompany and support their customers when it comes to the implementation of their digital solutions.
However, our customers remain ultimately responsible for their own internal transformation and the adoption of digital solutions by their teams.
CFG: Back to you, Ed: What efficiency gains could the other group members achieve by your company’s CargoTech participation?
EG: The great advantage operating within the CargoTech ecosystem is that we all bring our own industry specialism. Whilst we will be providing air cargo charter expertise to the group, there is a plethora of opportunity for mutual efficiency gains between members. Moreover, the air cargo market has been far too fragmented to date, and by realizing these efficiency gains through enhanced coordination and digitization, the end customer will benefit from greater speed, choice, and flexibility.
CFG: Please specify what kind of collaborative solutions the group can offer to the market that an individual member is not able to provide.
EG: Ultimately, the whole is greater than the sum of the parts. Whilst technologies such as AI/ML are developing at great pace, we know that the end customer will benefit if everyone specializes and plays their part within the larger ecosystem. It would not make sense for an individual entity to solve every pain point within the various subsets of the market, and in fact operating within CargoTech will enable all members to deliver ambitious value propositions that customers want.
Whilst we remain committed to innovation within the air cargo charter sector, it was obvious that there were many synergies with the other members. One specific example would be the use of Skypallet (by Wiremind Cargo). With every charter request, there are many variables, and being able to quickly and accurately determine how many pallets can be loaded onto the aircraft at the quotation stage will further enhance the offering to our clients with greater speed and efficiency.
CFG: Removing manual pain points from the air freight industry was CargoTech’s focus from day one. That coincides with IATA’s One Record initiative. Is the upcoming One Record scheme a partner or rather a competitor to the CargoTech Group’s digital offerings?
EG: The upcoming One Record scheme is very much seen to be a partner and industry benchmark. We certainly share the philosophy for progressive data sharing technologies, and to ensure that all parties are well coordinated. Without this, true digital transformation could not be realized.
CFG: Cédric, what can be said about the future of the CargoTech Group? Are financial cross-shareholdings an issue? Is an expansion of the group an option by adding further specialists to the CargoTech club of firms in order to embrace the entire industrial ecosystem? What exactly is the vision?
CM: If airlines want to maintain their margins and cover for the price of their expensive assets, they really need to focus on pricing and revenue optimization techniques.
That is the only way to prevent the downward spiral of rates, and to avoid going back to the times when cargo was just a by-product, whose revenues were only supposed to cover the variable costs.
The short-term future of CargoTech is an organic growth focusing on the development and sales of more advanced revenue optimization solutions and their widespread adoption. This is partly what CargoTech is focusing on.
Besides that, all new Digital Solutions will have an underlying sustainability principle, because this is becoming a requirement and a necessity for the society and the end customers of cargo transportation: the shippers.
CFG: Understood, but from the outside, the CargoTech Group looks rather fragmented. Wouldn't it need a cohesive, overarching strategic approach?
CM: The medium-term future of CargoTech is to integrate, as a new member, a company that is specialized in Change Management. This enables us to offer our customers a complete package: the best digital solutions, a consulting service to advise them on their transformation strategy, together with the organization that would implement them.
In the meantime, potential new members will be investigated as long as they complement the existing product offering and do not overlap with what we have. They also need to follow our principles: be experts in their business domain (cargo) and technology.
There are a lot of companies today that are providing cargo solutions but do not have a clue about the cargo business. This is regrettable and not what we want. The solutions we offer the market are developed by Cargo Business Experts, for cargo companies.
As the business needs evolve, CargoTech will always be here to offer products that meet these new needs. This is our long-term view. Anyone who can contribute will always have our interest and awareness.
CFG: Ed, Cédric, thank you for this interview.
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