Despite registering a growth of over 90% over the past decade as per World Bank statistics, certain structural deficiencies - slim margins, low yields and low predictability - have held back the air cargo industry from fully capitalizing on the heavy demand for freight movement. High impact, sustainable solutions are essential and the signals are strong for a digital future. The IBS Cargo Forum, which recently concluded in Abu Dhabi, focused on the digital evolution of the air cargo industry landscape, and how the iCargo platform stands to generate tremendous value for the astute customer.
Technology has been advancing steadily, and aircraft of today are designed for much better efficiency than ever before. While this drives down costs significantly, persistent leakages point towards cracks in the underlying business models. The pure freight model is facing a crisis of sustainability thanks to the increasing availability of freight capacity in passenger aircraft. This means the industry must invest in and develop whole new value proposition models to keep pace with the prospects offered by technology and stay relevant for the long haul. A recurring theme which comes up is the use of blockchains and artificial intelligence. While these terms are common in product literature to inflate value propositions, the air cargo industry offers genuine potential for both these technologies.
In his keynote address at the event, VK Mathews, Executive Chairman of the IBS Group, touched upon some use cases of AI and its potential to create as much as $4.5 trillion worth of value in the air cargo industry. A big challenge, in combination with the expensive R&D investment required at present, is that many providers have failed to fully understand the possibilities of the technology before attempting to assimilate it into business strategy. While today's available technology restricts usage to accelerated/automated cognizance, we can expect major advances in the way we implement revenue management, disruption management and operations planning among others.
Another highlight was the presentation of the blockchain based cargo community model, in association with Turkish airlines - a long term user and collaborative development partner for the iCargo platform. The distributed data ledger system obviously lends itself to creation of a digital AWB, which would take out the uncertainties that mar today's systems. New cargo products handling sensitive cargo are thereby enabled because it is possible to track every shipment back to its earliest point of origins without dependence on a single point of truth to capture, store and supply data with full integrity.
iCargo offers great diversity in terms of modular scope and configurability of different business models. It is ultimately up to the users to define what kind of value they seek to derive from it. This year at the IBS Cargo Forum, our customers stepped forward to present highly illustrative samples of how they were utilizing the platform towards achieving their specific business goals. For instance, one of the world's largest providers of cargo handling and flight support detailed their vision of how iCargo would enable complete global standardization of their operations, thereby bringing down administrative expenses and practically eliminating all issues related to compatibility between various geographies.
Leading airline companies in the Europe explained how innovative new business models are made possible by using iCargo as the backbone of digitized business systems. Not only does this let them solve business challenges like eliminating unproductive slack times, but the insights derived from analysing the operations also helps in meaningfully restructuring their processes.
The effectiveness of iCargo as a platform stems from two specific components of its DNA:
1. Deep insights into real world business scenarios
2. Highly advanced technology systems
We are committed to continuously upgrading ourselves on both these fronts, a fact that is evident from the significant investment in R&D that goes into our product line. However, in order to keep up with the rapidly changing industry, and to spearhead the kind of technological innovation that is required to keep our customers well ahead of the curve, it is important for us to maintain a very strong grasp of the industry dynamics. By listening to our customers, we are able to understand the problems and systematic inefficiencies that plague their business, as well as the enhanced features they desire in the platform that lies at the very core of their business operations. This will enable us to effectively define the roadmap for iCargo in the coming years.
The iCargo User Forum is a unique platform for our customers, as well as a selected circle of prospects, to get an up close view of the product and actively involve in its future development roadmap. Conscious of the tremendous power of the platform in supporting and enabling their business, our customers are able to adopt extensively innovative strategies that weren't possible in previous scenarios. Collecting in-depth feedback from actual users of the product is only the first step. The various action items are collated and classified based on their degree of priority in terms of value addition to the customer, business and technological feasibility and expected return on the investment. At each edition of the IBS Cargo Forum, the attendees are given a full update on the status of each of these action items, including a view of the implementation.
In short, the IBS Cargo Forum this time focused on the comprehensively digital landscape taking shape in the air cargo industry. Emerging technology offers a lot of scope for enhancing business value. Digital innovation surrounding key concepts like big data, process integration and automation holds the key to the future of the industry, and it is greatly encouraging for us to see the customer community taking cognizance of this fact. It doesn't matter which part of the vast air cargo industry ecosystem your business works with; technology (current and emerging) offers a wide spectrum of advantages of which a significant portion remains to be fully unlocked. Apart from enabling what was previously deemed impossible, business processes will henceforth be implemented with new levels of efficiency in terms of scale, cost, time and transparency.
Ashok Rajan is Senior Vice President & Head of Airline Cargo Services line of business at IBS. An accomplished specialist in the Travel & Transportation domain, he has a track record of 18+ years in conceptualizing and building products for the industry. Having played multiple roles in the organization from development to product management to running transition programs for customers, Ashok is involved with building and executing the strategy for the flag-ship iCargo product line of the company.
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