Airline Cargo

Air cargo is an interesting business. The airplane was built, driven by man's inherent dream to fly. Yet on that first flight, there still was some space available in the cockpit after the pilot occupied the seat that could accommodate some letters to the dear ones, Airmail was thus born. Bigger planes followed with more capacity to carry people, their luggage and there still were available spaces for sending something more from origin to the destination and thus air freight was born. Airlines have been carrying air freight since that very first flight that carried letters, and almost every airline around the world have a cargo program today. Yet, air cargo is a challenging business.

Cargo requires complete human attention, starting from receiving the freight till the delivery, unlike a passenger who moves around by him/herself. Cargo needs to be carried, inspected, stored, built into ULDs, and transferred from one carrier to another until it reaches its final destination where all the unboxing happens till it is delivered to the consignee - all processes incur a cost for transporting it. The growing number of aircraft brings extra capacity into the market every year – another challenge. As every other airline is also offering similar product or service, airlines are at the mercy of the multiple business partners like forwarders for cargo business. Advances in technology like 3D printing is revolutionizing manufacturing and could possibly take away the staple diet of cargo carrier which are high-value technology products, low in weight but high in value. Airlines thus are facing challenges from every side though they do all the heavy lifting of freight.

However in spite of so many analysts and industrial experts predicting the doom for airfreight, it still goes on with cargo bringing in the money considering the fact that there is spare capacity in the belly that carries freight.

In an increasingly commoditized air cargo market, Is this going to be the situation forever, for the cargo business of airlines or would it be any different? What could an airline do differently that will differentiate them in the market with significant competitive advantage?

Special Product Offering for Air Cargo

If an airline is willing to pay serious attention and focus on building its cargo business, there are numerous areas that promises to save cost and increase revenue generating capability. Developing and sustaining a differentiated product offering is one of the ways in which an airline can truly add value to its customers and achieve improved yield and revenue from its air cargo business.

However building differentiated offerings is also challenging as it requires the airline to setup the necessary infrastructure and processes in place in its network to ensure that the product delivers what it promises to deliver.

Sports cars, jewelry, pets, race horses, medicines and human organs that fly these days need special processes, care and attention such that each item is handled for their unique properties and requirements. Jewelry needs extra security, pets' need to be fed at intervals and medicines/ human organs need to maintain specific temperature to retain reliability.

Going by the perceived value of these shipments alone it is evident that the shipper is looking for solutions that guarantee shortest transit time, least amount of risk and maximum integrity from origin to the destination for their shipments.

How to get there

Airlines that are doing well in transporting these special cargo have not been doing so through magic. They have tried and tested and improved on various process and technology areas to achieve the success that they have today in this niche business area by focusing on the products as well as the networks in which they will offer these services, the SLAs they will adhere to and the training requirements of their staff. They would also need to invest in a robust and flexible cargo handling solution that will be able to change the requirements of the product in a super-short time frame unheard of with legacy systems.

The cargo IT solution is particularly an important element of the overall infrastructure as it drives the overall air cargo business of airlines. As the central coordinating engine that holds all customer data and business logic, as well as interfaces to all supporting systems, the air cargo system holds a lot of potential for improving the business for cargo carriers.

Case in point

The airline wants to take advantage of the business of transporting temperature sensitive medicines by freight and wishes to launch a special product that ensures a fool-proof mechanism for shippers like medicine manufacturers, to send their shipments to marketers around the world. The special product offered by the airline for such critical shipments has to take care of all aspects of the shipping at the airline side and one of the key requirement and success criteria is avoidance of temperature excursions while in transit for pharmaceuticals and perishables. How can IT help?

Value from integrated cargo IT

The IT solution is a central integrator of data as well as tasks that drive the cargo business. At the airline side, the acceptance of freight is moved from paper to iPad. Input is taken while accepting freight and the data goes to the central server in real-time. The accepted freight is moved to a storage facility and the barcode scanner application in a smart device records the location and tells the central server about it. The data becomes feed to booking system or the scheduling system. Based on the requirements of freight, the system will look for resources that are required for transport – temperature controlled ULDs, whether they are available for the shipment day or how and when they can be made available for carrying this freight.

The booking triggers multiple scheduled tasks that makes the resources ready for transport and alerts are sent to smart phones and tablets of the end user who will follow instructions to pick the right freight from the warehouse or the temperature controlled facility for transport. Automated instructions follow on specific time period for loading on to ULDs and recording of temperature/ pressure/ other parameter value as required through smart devices on real-time. User can record the temperature on ULDs, weight of ULDs, voltage percentage on ULDs, the amount of dry ice present, serial number in the case of valuables etc. Also assisted with a check-sheet on the iPhone/iPad screen ensuring that all data is captured and sent to the server in real-time.

The input data is validated in the system that will drive successive steps (for example to charge the ULD batteries if they were found to be below the acceptable threshold) until it is transported to the destination and there is a closure of process steps of the special product.

By steering the process through automation aided by smart devices, the IT solution ensures consistency in process steps, predictable output and alert mechanism for supervisory intervention etc. These automated alerts and process steps ensures that the airline is fully in control of the special product that it is delivering for the customer. Airlines have deployed such system and they are delivering results.

Bottom line

A capable IT solution is central in the airline's ability to achieve its objectives of increasing revenue potential and reducing costs from operations through the introduction of such special products.

Also, the solution serves a huge human cause which is the transportation of life saving drugs, human organs etc. which have a high rate of failure if allowed to deviate from strict transportation requirements around temperature, pressure and other parameters. The transportation of fresh fruits, vegetables, flowers etc. are important to the economies that depend on these commodities for their livelihood. Such solutions help solve real business issues and in that process help human lives, societies and their future.