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NEWS Last modified on May 26, 2017

Speaks volumes

Digitisation will play a key role in the building and operation of the air cargo terminals of tomorrow, writes Brendan McKittrick, CTO of Mercator.

Airports house some of the most major air cargo facilities in the world, with many airport hubs capable of handling millions of tons of goods each year. 

With cargo volumes on the rise both globally and across UK airports, the profitable, symbiotic relationship enjoyed by many airports and air cargo carriers are more important than ever.

At Heathrow airport alone, volumes of air cargo have grown 7.6% to 537,461 tons in the first four months of 2017 and by 5.1% to 1.58 million tons on a rolling 12-month basis.

Air cargo is a significant and highly efficient component of today’s optimised supply chain. And for many products, markets, and industries, air cargo is the critical link that allows organisations to respond to customer demands in a timely manner.
DWC cargo
This scope proves to be an industry wide challenge and opportunity in equal measure. However, this opportunity cannot be fully seized unless digitisation is embraced along the entire air cargo supply chain.

Digital transformation is now the only route to achieving the quality, speed and reliability that carriers need to stay competitive. 

Having the right digital air cargo ecosystem in place will be a necessity to achieve any of these things. It’s important to note that air cargo carriers can’t accomplish these goals alone – they must continue to work with airports to ensure both parties can benefit in the long run.

Agility is key to accelerating speed and reliability

One must recognise that speed and reliability are key demands of a new breed of customers, and if these expectations are not met, traditional air cargo carriers run the risk of losing business to new players that lay outside of industry lines.

Earlier this year, Amazon announced $1.5 billion investment in building its own air cargo hub, which will eventually become the home to 40 Amazon Prime aircraft. 

And other non-aviation players such as Alibaba and even Walmart are increasingly looking to grow their logistics business in order to handle more of their own shipping.

Whilst air cargo carriers have the significant advantage of air cargo management systems already in place, this involves a large network of disparate and globally dispersed regulators, carriers, forwarders and other logistics providers, with little or no integration between them. This overcomplicates and slows down processes.

To address this, airports should consider building an intelligent ecosystem of cargo management apps based on an open API platform architecture, to help liberate their carriers and handlers from legacy IT systems and streamline business operations. 

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Such an intelligent cargo ecosystem would allow business users to make changes to IT processes and workflows in real-time, providing agility and encouraging innovation.

This agility is added to by the app-based approach, which can enable cargo operations with a mobile-first approach to air cargo management. This approach reflects the technological shift that today’s businesses are experiencing, marked by the shrinking usage of desktop computers in the working environment.

Enhanced visibility, intelligence and decision-making

The entire air cargo industry is shifting because of increasing visibility that’s available due to new technologies. This visibility relates to the exact location of a package at any time during its journey.

Mobile technology and open API platforms will revolutionise air cargo, allowing carriers to get a real-time and end-to-end digital view of the supply chain, while providing the ability to reduce delays and minimise the risk of disruption.

Real-time data and information exchange

However, digital air cargo isn’t just about data, it’s also about connecting and collaborating, and enhanced visibility is not possible without real-time and the harmonised sharing of accurate and relevant information across the value chain.

Whilst electronic documents greatly reduce the inefficiencies caused by excessive paperwork, this does not go far enough. Embracing new technology, such as a warehouse app, can deliver an end-to-end view of cargo management, and enables warehouse staff within cargo terminals to change workflows and processes on-the-go.

Such apps can greatly reduce inefficiencies caused by inputting of data and checks – all of which can be done from a single device.
Cargo Shot
The improved transparency and predictability within an intelligent cargo ecosystem will greatly enable carriers and handlers to accommodate new services such as guaranteed delivery and other premium delivery options, as well as improving services such as the delivery of perishable goods.

What it takes to digitise air cargo

It is already true that the unabated growth of global e-commerce and the advent of big data, analytics, cloud computing, open messaging platforms, and the Internet of Things (IoT) have revolutionised other industries, and air cargo will be no exception. 

In recent years there has been an emergence of new competitors expanding into air cargo from other sectors, and companies like Amazon have leveraged their experiences in supply chain management, customer relationship management, and various other competencies to radically alter the landscape. 

To get ahead of the inevitable disruption, air cargo carriers and airports alike must capitalise on digital opportunities to adapt, upgrade, and enhance all aspects of their operations to compete more effectively with new market entrants. 

Every element in the air cargo supply chain must be in close contact with the next.

Thanks to digitisation, collaboration can be made much easier. Inventory and transportation costs will reduce significantly, while production processes will be accelerated and delivery times decreased.

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