This ACHL panel won ‘longest title award’ hands-down with: “The airline industry struggles to compete against the eCommerce giants, where mega companies such as Amazon and Cainiao control
their own lift and market. How can the industry support the thousands of companies looking for an alternative?”
Essentially it could have been shortened to “Dealing with eCommerce.” Here is the panel’s summary.
Moderated by Chris Notter, the panel in the morning of the third day of the Air Cargo Handling and Logistics conference, featured Dennis Lister, SVP Product and Innovation at Emirates Sky Cargo, Guillaume Crozier, SVP Cargo UAE and Global Cargo Strategy, and Mark Sutch, Chief Commercial Officer Cargo International at Indigo. The discussion tackled the challenges, opportunities and views posed by the booming eCommerce sector.
Distinct Models with the need for adaptation
Mark highlighted the fundamental distinction between traditional air cargo models and eCommerce operations carried out by the likes of Amazon and Cainiao. He emphasized that while capacity is airline agnostic, the critical battleground lies in ground operations. Unlike controlled capacity providers such as Magma Aviation, commercial airlines face the challenge of efficiently allocating their volumes.
When Chris talked about the struggle to compete against eCommerce giants, Dennis countered: “It is not about competing. It’s here to stay and will continue to grow. I don’t like calling it ecommerce anymore, as it is a mix of express and general. How do we respond as an industry? Airlines are airlines, but end-to-end is super important.”
He urged that every player in the supply chain, including GHAs and clearing agents adapts to meet the changing paradigm, stressing that safety, security, and technology, above all transparency are crucial for airlines.
This was echoed by Guillaume, who illustrated dnata’s strategic efforts to create a solid basis for providing customers with the right service: “It’s not about competition – it’s about getting ready to take the lead and identify ecommerce volumes: general cargo, courier, mail, etc. – all these already touch on the ecommerce business. […] we need to deliver on [customer end-to-end] promises [and] cannot build up on something shaky. We need focus and data – piece level is a challenge. We are part of a case study [and] have launched dnata logistics to deliver ecommerce promises: first/last mile, pick and pack, etc.” dnata is ready for eCommerce, he said, but the GHA industry is not yet sizeable as an industry and airlines will start pushing at some point, so GHAs should listen to and work with vendors. “eTailers are partners almost, not competitors,” he underlined.
Learning from eCommerce Giants
Mark acknowledged that there is still much to do when it comes to optimizing ground operations. Many carriers grapple with legacy systems that hinder progress. While improvements have been made in dwell times and visibility, there is still much room for growth, and companies would do well to draw inspiration from eCommerce giants like Amazon, when it comes to operational efficiency. However, he pointed out: “For many carriers, we have an old model that has to change, and that is often more difficult that starting from scratch.” Guillaume revealed that eTailers are only too happy to show what they do: “They want us to [visit] the hub, because they know it is in their interest.”
From the audience, Tushar Jani, Chairman of Cargo Service Center (CSC) Group and SCA Group of Companies, pointed out that many eCommerce players had begun their own operations because they had been unable to find reliable partners. He emphasized the need for airlines and cargo handlers to position themselves as strategic partners, both within and beyond the airport, to drive cost efficiencies at a larger scale.
Navigating risks, data management and standardization
Guillaume stressed the importance of trust and trackability in ground handling operations. He highlighted the need for standardized data reporting and real-time tracking, while also acknowledging the progress being made in this area.
Lithium Batteries was identified as a core risk issue that will always be there. Dennis illustrated the problems in safety and quality: “Customers are approaching many bad actors in this world, which is super frustrating for airlines. We have issues and need to be severe, blacklisting bad forwarders. Yet, you knock one down, another one pops up. We have an ongoing battle with consolidators who sometimes mix warm, running phones in with t-shirt shipments. How do people have the audacity to risk other peoples’ lives?! We need to chase people down, educate consumers, BCOs, and shippers, but the problem will never go away.”
A problem that Mark echoed: “Most airlines state Lithium Batteries in the Top 3 of their risk register as a risk to the entire industry. We screen daily with huge findings. Yet, for everything that is found, what is NOT found?”
The Way Forward: Consistency and Education
The panel addressed the importance of industry-wide consistency, particularly in adopting initiatives like CargoIQ. They stressed the need for concerted efforts to educate stakeholders about the value of quality in air cargo operations.
In conclusion, the panel discussion shed light on the complex and evolving landscape of eCommerce within the air cargo industry. The key takeaways emphasize the need for adaptability, innovation, and collaboration to thrive in this rapidly changing environment. As the industry continues to evolve, embracing new technologies and strategies will be paramount to sustained success.
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