Three cargo products desperate for better platform integration

Three cargo products desperate for better platform integration

The propensity of high value cargo to take to the air, rather than other channels, is influenced primarily by one single factor - speed and secondly, reliability. But this also places great demands on maintaining the security and integrity of the shipment, which is a key driver for the modernization currently happening as well as envisioned for the future in the air cargo supply chain.

IATA has declared a commitment to "deliver enhanced value for the industry by driving a safe, secure, profitable and sustainable air cargo supply chain". IATA has formally identified unregulated supply chain participants as a "threat" to air cargo, while lack of transparency and communication between stakeholders is acknowledged as a "weakness", in their Cargo Strategy document.

In today's hyperconnected world, an expectation of "hyper visibility" will quickly become part of expected standards from businesses. The key question is then – are we ready as an industry to deliver? What is the state of the union today in the air cargo industry with its multitude of stakeholders to deliver to this consumer expectation? Are we well and truly in the path towards enabling hyper visibility across the supply chain and to satisfy the growing appetite for data and visibility? 

Defining a cargo product 

A cargo product, as offered by an airline in association with its partners, represents a sense of standardization across the supply chain. It indicates an ability to differentiate service levels in such a way that the problems associated with the supply chain are solved (at some level) specific to the requirement of a particular category of shipments – "special cargo" as they are broadly called. The customization is evident not just in how the airline and its ground handlers handle the shipment, but also in terms of how a shipper registers the shipment and tracks it on its way to the consignee.

The service level agreement will include encoded information about how the airline is supposed to handle the special cargo (beyond basic service) – this could include periodic tracking of environmental metrics, enhanced speed of delivery, atypical safety precautions, high levels of transparency to let the shipper/consignee have a good level of visibility into the handling of the package, etc. These are enabled through special infrastructure and thereby results in increased cost of carriage for the goods – this is why it makes sense to apply them to high value cargo.

Why some products demand platform integration 

It is key to ensure that the service levels agreed upon are complied with downstream as well, as the goods pass from one link in the chain to another. Damage to sensitive shipments is often irreversible, but a good data framework will enable the stakeholder to identify the offending link in the chain, as well as prevent such losses in the future. Here are three key examples of commercially relevant goods which require consistent attention across the value chain to ensure safe carriage from shipper to consignee. 

1. Live animals 

With the exception of goods classified as HAZMAT, and even weaponized materials, the one category that demands a lot of attention from the airline and other cargo partners is that of live animals. Assigning a value to the life of the animal will itself trigger debate, not to mention the sentimental/emotional value of pets and the commercial value associated with some animals like racehorses. A lot of the complexity stems from the fact that there is very little consistency associated with the ideal environment for animals to exist in, or how they will respond to changes from their natural habitat. 

Apart from the perceptible aspects like temperature, humidity, presence of pollutants, etc. there are some natural interaction protocols to consider. Some animals are greatly sensitive to the environmental conditions immediately around them, such as the presence of other animals which have a predatory instinct, despite the fact that both of them may be in sturdy cages and there is no actual danger of one attacking the other. 

2. Pharma and perishables 

Perishables were among the first to be identified as good prospects for air cargo, considering their high sensitivity to temperature and humidity factors. Over time, airlines have built up a certain amount of maturity in their infrastructure and processes designed to carry these, but they still pose a high risk because imported goods in this category are subject to heavy examination at various ports and the slightest hint of damage may cause the entire shipment to be rejected.

While intelligent systems are able to prevent most of these, it is important for the airline to insist on a greater level of compatibility in the infrastructure and processes followed by all links in the supply chain. A key part of this is the platform integration, which will result in more efficient communication and data exchange across different links. 

3. Objects of artistic/historic value 

The value associated with some specific objects, especially stemming from artistic, archaeological or otherwise commercial rarity is meaningless without a traceable provenance. This is key to eliminating imitations that may falsely claim the same value as the original. This means the integrity of the supply chain is of utmost importance, as is the total transparency of the entire shipment process. Air cargo is the chosen channel for such shipments, and it is a great value addition to have the entire supply chain integrated in terms of the systems which would govern this.

Imagine the Mona Lisa being transported for a special show, or a shipment of a special variety of diamonds. Integrity is paramount, but there are also environmental protections to be given to the shipment. It is ironic that the value of the shipment, in some of these cases, is more than the aircraft's or even the airline company's in some extreme cases! 

Conclusion 

As the responsible party on either side of the key piece (the airline) on the supply chain, Ground Handling Agents typically have a lot of exposure to the risk of outdated systems. Hence, there is a real need for bringing them up to speed in the technical advancements led by air cargo carriers. To quote IATA once again, "Modernizing air cargo and making digital the new business as usual is an imperative. Digitization is a key enabler for the development of new innovative services and solutions, thus increasing the value of the air freight to shippers." 


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. 

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Wednesday, 16 January 2019

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