Airline Cargo

Increased stakeholder collaboration, innovation, agility, and digitalization – key take-outs of the IBS Cargo Forum's opening session

Increased stakeholder collaboration, innovation, agility, and digitalization – key take-outs of the IBS Cargo Forum's opening session

Albeit virtually for the second time since the pandemic, I was pleased to welcome around 250 air cargo specialists from our customer organizations, prospects, and IBS to the 18th edition of IBS Cargo Forum (ICF) on 1st September. I was especially proud to welcome our new customers, DHL and AirBridge Cargo, to join the ICF family that is already 33 members strong. Over the next 4 weeks, the weekly sessions will look at how technology is transforming the air cargo landscape and addressing industry challenges.

The ICF embodies the solid and collaborative community that has grown around iCargo. Throughout the day's sessions, we discussed industry-shaping trends and on-going customer challenges in air cargo. While listening to our customers talk about adapting to the current environment and beyond, there were several recurring and resounding key themes I picked up:

  • The need for increased stakeholder collaboration and transparency. While air cargo revenues represented 1/3 of overall cargo revenues, versus 10-15% during pre-pandemic levels, it's clear that bottlenecks have appeared. Supply chain driven limitations and staff availability challenges because of the pandemic have put pressure on product inventories around the world. More transparency and greater collaboration, including upstream integration, will facilitate tracking and prioritize materials shipments, their means of transportation, status tracking, and shorten costly on-the-ground waiting times and processes.
  • More innovation is urgently required. As Neel Jones Shah, EVP and Global Head of Airfreight at Flexport, pointed out during his plenary: "innovation in the industry hasn't kept pace with our customers. We're delivering 20th century products to customers already in the 21st century". It's no secret that the cargo industry has been slow to adopt new technologies and business models but it's now on a critical path. While air cargo demand has grown 10% versus pre-pandemic levels, the top 20% of air cargo players have exploited the opportunity and grown, while the bottom 20% actually shrunk. Innovation in technology and business models is accelerating that gap.
  • Agility is key to survival and growth. Throughout the pandemic we've seen how companies and people have had to reinvent themselves to survive. Airlines and ground handlers were forced to shift their focus from passenger operations to cargo. Reacting quickly to market changes and adapting operations and business models have been a lifeline for airlines during the pandemic. As the "and" world, versus "either/or", becomes more demanding and complex, continuous agility and adaptation will be prerequisites to success moving forward.
  • The need for accelerated digitalization. The underlying enabler for all the above is unquestionably technology. With so many legacy systems, manual intervention, and paper-based processes still dominating the industry, digital transformation is critical to keeping up with the pace other industries are setting. Automated processes and collaborative platforms will drive industry efficiency, transparency, new business models, and innovation. The sooner we transform as an industry, the sooner we'll be able to access more reliable data, in real-time, to boost market intelligence, forge stronger partnerships, and accelerate agile growth.

With yields and capacity utilization at a record high, air cargo now has the opportunity to consolidate its place in the boardroom. The challenge is on how to sustain the momentum air cargo experienced since the pandemic struck. As our event speakers agreed - speed, focusing on high value products, and capturing shipments from other modes of transport are instrumental to sustaining air cargo growth and capitalizing on it. Our Chairman, VK Mathews, highlighted three megatrends that will drive the industry over the coming years:

  • Personalization: adding value from a customer need, not available inventory perspective
  • Disintermediation: generating efficiencies by bypassing low value intermediaries to connect directly with customers
  • Virtualization: the ability to add value by integrating third-party products and services to customer offers

Clearly, technology will have a key role to play to drive and support these megatrends as air cargo seeks innovative and environmentally friendly growth. Industry processes, business models, and regulations will have to evolve hand in hand with technology to ensure maximum agility, profitability, and efficiency moving forward.

Author Info 

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 20+ 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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