By Lionel Van Der Walt, President and CEO, Americas, PayCargo
In a time when major car companies such as Jaguar Land Rover are shipping auto parts across the world in suitcases and huge quantities of perishable goods are stranded at origin or destination ports and airports, it is difficult to be confident in any predictions for the next 12 months.
The COVID-19 (coronavirus) outbreak has thrown thousands of programs generating forecasts, planning and scheduling into chaos and its on-going effects will no doubt create an anomaly in air cargo statistics for decades to come.
IATA is predicting the first fall in demand for air travel since the financial crisis of 2008-09, with carriers in the Asia-Pacific region hardest hit. And although lower fuel costs will offset some of the losses, IATA expects airlines to cut capacity and, in some cases, routes.
One minor benefit: the general public is suddenly realising that many of the goods they use are carried in the bellyhold of passenger planes.
So, do events such as the coronavirus mean that working to increase levels of supply chain visibility and data generation through digitization, AI (artificial intelligence) and other means – to better predict future trends and demand – is a waste of time?
Or, maybe, access to the extra data, and/ or interrogating it in different ways, can help companies adjust more quickly to the new circumstances and even take advantage of them.
One of the great benefits of digitization is the ability for closer cooperation between suppliers, customers and their supply chain partners. This, in turn, increases the potential to respond more quickly and efficiently when planned deliveries are delayed or major regional disruptions occur.
It would allow goods to be quickly rerouted and even delivered to a different customer if needed, with all the necessary Customs and financial transactions changed as needed in real time.
The power of AI has recently been demonstrated with the discovery of a new type of antibiotic. The secret, apparently, was to have the algorithm learn to predict molecular function without any assumptions about how drugs work and without chemical groups being labelled.
This meant it was not hampered by pre-conceptions and could learn new patterns unknown to human experts.
For some, this approach is hugely exciting for the future. And they already use it in a more human way by employing experts from outside their own industry to challenge the norm.
For others, more wedded to legacy systems, AI, big data and other technology is a waste of time and money – and, just as importantly, threatens jobs and even whole communities.
It is vital, therefore, that companies wishing to make the maximum use of new technologies ensure that their staff use the full range of features of the new tools /apps and realize it actually increases their skills and will help the business to grow and prosper, benefiting employees as well as the bottom line.
Customers, too, may need persuading that new systems are better. For an importer who has always judged his team’s performance by the number of boxes coming in and out of the warehouse, the idea of deliveries direct from supplier to end customer can be very intimidating.
In the end it comes down to trust. Every player in the supply chain must feel confident that sharing their data does not constitute a commercial risk – especially where a supplier works for several competitors.
And the customer must feel equally confident that the data and information they receive is accurate. Many would argue that this is precisely what digitization does much better, as everyone sees the same data at the same time, with the bottlenecks or points of failure much easier to identify – and so to fix.
Of course, trust is also at the heart of the Air Cargo Community System (ACCS) which has been developing in Europe in the last ten years and has recently been introduced in the US.
The ACCS allows shippers, airlines, trucking companies, customs brokers, freight forwarders and cargo handlers to communicate electronically with each other.Amsterdam Schiphol says that the community it set up has led to more cooperation, transparency and efficiency in the supply chain, helping to improve air cargo processes for all stakeholders.
Hartsfield-Jackson Atlanta International Airport, which launched its ACCS last year, is already seeing the benefits with a reduction in both duplicate data entry work and excessive documentation. Truck congestion issues are also being addressed which helps speed both pick-ups and deliveries.
Our PayCargo payment platform is an integral part of the system along with IT experts Kale Logistics Solutions, giving all stakeholders real-time visibility of payment status.
We have been very impressed with the concept and believe that these community systems are the future of air cargo as they are the prime example of how collaboration through trust and technology benefits all stakeholders. Co-operation brings benefits in so many ways, with greater visibility and shared knowledge leading to new ideas and greater access to problem-solving solutions. It
helps raise the bar for everyone.
Schiphol and Atlanta have even established a renewed collaborative partnership, creating a new ‘trade and logistics corridor’ between metro Atlanta and the Netherlands. This enables exchange of data between the two hubs to facilitate end- to-end planning and capacity optimisation.
The air cargo industry will continue to face many challenges. Some, like the coronavirus outbreak are unpredictable and others, like climate change and public attitudes to the whole air transport industry, are much more long-term.
But, whatever happens, we believe the demand for air cargo will continue to grow, especially in markets such as pharmaceuticals where the products will become more and more specialized with shorter shelf-lives.
The best way to run an air freight operation is through greater use of digitization and to harness the power of AI and big data to help us improve our industry to become more competitive and efficient.
