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IT Last modified on February 12, 2018

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Smarter warehouses and new strategic alliances will transform how airports handle cargo in the future, writes Unisys Corporation’s Venkatesh Pazhyanur.

The Internet of Things (IoT) and voice AI enabled smart devices and systems, warehouse drones and strategic alliances will be key to the airfreight industry capitalising on the e-commerce market.

Indeed, the cargo industry needs to embrace disruptive technologies from the consumer world, including the IoT, digital assistants and drones, to increase efficiency and meet customer expectation for greater transparency throughout the supply chain.

This is particularly true for the Asia-Pacific region, where the air cargo industry is experiencing growth and transformation driven by rapidly increasing capacity supply on passenger flights, and the shift to business-to-consumer small parcel shipments as a result of e-commerce.

Looking forward, growing passenger demand will increase the number of passenger flights and add to cargo capacity supply.

Simultaneously, the popularity of e-commerce is changing the nature of cargo shipments, incrementally increasing the number of small parcels – which is predicted to grow 5% annually in mature markets and by 17% annually in China.

Unisys predicts these market pressures will bring innovation in three areas in the cargo supply chain – smart warehouses will become even smarter, drones will finally take off in the cargo supply chain – but inside the warehouse – and new alliances between airlines and global distributors will enable longer-term capacity management.

Much of the underlying technologies are already being used in other sectors, including the consumer world. But now, more than ever, cargo operators will be forced to embrace such innovation to be more efficient, nimble and proactive in an increasingly competitive and price conscious market.

Unisys cargo experts believe the following predictions will become reality within the next five years or less:

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Smart warehouses will become a reality

To meet the growing demand for small parcel deliveries, warehouses will transform from storage locations to dynamic facilities that utilise IoT and voice artificial intelligence (voice AI) to ensure the faster processing of more shipments, and generate a higher return on the real-estate investment.

Just as connected wearable devices such as Smartwatches are becoming mainstream in the consumer world, IoT-based technology will create the ‘smart warehouse’ of the future.

Recent innovations such as smart glasses that display information triggered by a barcode or QR code on a container will be taken to a new level by incorporating scanners to automatically capture and input information into the warehouse system, and integrating voice AI to initiate actions.

Similar technology is already used in digital assistants such as Siri, Cortana or Amazon Echo. Unisys expects cargo operators to invest in converting machine commands to voice within the next three years.

Drones will be used inside the warehouse

While drones have become a familiar way to provide TV sports aerial footage, the much-anticipated mainstream rollout of drones to deliver parcels to the customer’s doorstep is hampered by flight space restrictions, government approvals and privacy considerations.

We predict that the more immediate application of drones in the cargo supply chain will be within the confined space of warehouses to conduct inventory checks more often and more accurately, replacing the largely manual process.

Beyond locating lost or misplaced items, the drones will use sensors to monitor environmental information such as light or temperature for perishable food, pharmaceuticals or livestock, and raise alerts to unusual noise or movement that may indicate animals are in distress. Unisys predicts this within the next 12 months.

New alliances between airlines and global distributors

With cargo capacity potentially increasing faster than cargo demand due to extra passenger flights and larger aircraft, cargo capacity management has become the number one challenge for airlines.

In this environment of unconstrained capacity, the traditional approach to yield management will not work as airlines may dump cargo space onto the market, creating a price war.

Unisys predicts a fundamental move to longer-term revenue optimisation based on strategic alliances between airlines and organisations with large ongoing delivery requirements, such as postal authorities, major online retailers, global distributors and supply chain management companies.

This will require airlines to provide their alliance partners with transparent real-time access to available capacity and predictive analytics to determine best routes based on speed, reliability and cost.

This expectation for visibility will also extend to the ‘last mile’ of the business-to-consumer cargo supply chain, leading to the development of mobile apps to allow the final recipient to be able to track the approach of their delivery – similar to how consumers currently track an approaching taxi or Uber.

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