Airline Cargo

Partnering for collaboration: Strengthening value delivery by air cargo

Partnering for collaboration: Strengthening value delivery by air cargo

Dr King's hand shivers as he fills up the package registration form at the freight forwarder. He finds one particular field in the paper form to be very disturbing: "Value"  

What is the value of my package? 

Is it the price of $2,000.00 that I paid?

Or is it the life of the child in rural Africa which I am going to save by ensuring that this package gets there in time for his surgery

Interestingly, both of them are accurate estimations. But for the true value to be realized, the package should reach its destination within the stipulated time and in good condition; maintained within acceptable limits of temperature, humidity and all other parameters necessary for its preservation. If any of those factors is not met then the package's value drops instantly. Dr King cannot ensure that by himself. He needs to depend on an air cargo supply chain that can ensure the integrity of the package from pickup to final delivery.

Air cargo, as we know it today, is enabled by a colossal supply chain that is capable of connecting one corner of the world to the other in such a cost-effective manner that it makes sense for several businesses to rely on this network to carry their high value shipments to their end customers. What starts from a freight forwarder's office where a shipper drops off his package, proceeds in trucks to the warehouse where it is sorted and consolidated with other shipments headed to similar destinations and is then loaded by a ground handling agent onto the aircraft which will carry it over the oceans to a suitable hub connected to its final destination. At each stage in this chain of events, the shipment changes hands between multiple parties- the airline, ground handler, warehousing, freight forwarder and the last mile delivery agent to consignee who typically realizes the optimal value in the package. In this case, whoever is able to use the high-value drug/surgical instrument to save the lives of the children in Africa fighting for their life. 

To every single partner in the supply chain, the value gained from transporting the package translates to the fee/commission they derive from it. But that fee is in fact an incentive to construct this partnership and contribute their specialized capabilities and capacity to it, thereby helping to convert value to a human life saved. Evidently, the supply chain is heavily fragmented and cannot be expected to automatically sustain itself on the basis of such incentives alone. Proper governance mechanisms are needed to ensure that the supply chain delivers to expectation, especially with regard to the specific parameters that are considered critical for the specific type of cargo which a pharmaceutical shipment would fall into. 

In stark contrast to today's hyper-connected world, the air cargo industry today offers little or no connectivity between supply chain partners and each work in silos of information which are weakly connected and inefficiently integrated. In order to unlock its full potential in terms of service delivery quality and diversity of product portfolio, there is an urgent need to recast the air cargo fulfillment model on the basis of connected, open architecture digital platforms that enable seamless, real time communication between supply chain partners. Not only will this enable the implementation of strict governance mechanisms but also enable elevated levels of reliability, transparency and predictability demanded by special cargo products. The platform should provide a suitable data backbone that will connect every partner in the chain, capture relevant data at a pre-set frequency, process this data to yield meaningful insights and then enable the system to utilize those insights for ensuring integrity of the supply chain, as well as for identifying and resolving systemic shortcomings which will lead to continuous improvement. 

Simplified view of the air cargo supply chain

Building such digitally enabled platforms should come from a combination of deep set expertise in the air cargo domain and a strong interpretation of technology beyond just the buzzwords and hype in order to design solutions that will enable each party in the supply chain to be uniformly aware and to uniformly execute to a singular plan as an integrated unit. Dr King should not have to worry about how the package will be handled by each stakeholder. He has entrusted it to this monolithic unit and expects this unit to deliver this to the consignee at the hospital where the sick boy is admitted. 

The latest edition of the IBS Cargo Forum, to be held in November 2018, is an instance of the continuous effort by IBS Software to ensure absolute relevance of the next generation cargo product iCargo to the broader industry which it serves. By enabling the power of partnerships, the platform seeks to deliver value where it matters and help our customers to redefine their business through digital transformation.

Radhesh Menon heads product management and strategy for IBS' offerings in the Airline Cargo Services line of business. In this capacity, he is responsible for short and long term product goals, competitive benchmarking, product roadmap and innovation practice. He is also responsible for running the product community model. He has over 16 years of experience in the air cargo and logistics business systems in air cargo, industry best practices and new industry initiatives. 

Radhesh played a pivotal role in conceptualizing and developing the blueprints for IBS's new generation product line for air cargo management. He was instrumental in setting up and running the IBS Core Group of Influence (CGI) – a partnership of IBS and several industry leading carriers for the conceptualization of IBS' new generation cargo system - iCargo.

Comments 1
Guest - Warehousing distribution services on Friday, 27 September 2019 19:51
Warehousing distribution services

Nice Blog, Very Helpful. Warehousing distribution services are very helpful when you talk about international business.

Nice Blog, Very Helpful. Warehousing distribution services are very helpful when you talk about international business.
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