Transforming air cargo sales and distribution through digitization
Remember those images of telephone switchboard operators plugging cables into different jacks to establish phone calls? As we stare at our smartphones today, thankfully, those images are part of history. While the telecoms industry has made giant strides over the past decades, some industries are still lagging behind technological evolution. Underpinned by legacy systems, outdated messaging types, and heavy manual intervention in too many cases, air cargo is one of them.
Air cargo retail, today
Faxes, emails, call centers, and industry teletype messaging have dominated air cargo sales and distribution for decades. They still do. And this approach has served the industry well for just about as long. But as technology continues its relentless evolution, too many players in the air cargo industry are still stuck with legacy systems and their old ways of operating. Those who have not embarked on digital transformation journeys are being outpaced by those who have, and that gap will only continue to accelerate.
As technology simplifies our lives and makes us more productive, we expect similar digital experiences across all facets of our daily interactions. The air cargo industry is ripe for digital transformation, as too many players still suffer from:
- Lack of reliable visibility on capacity, which is business-critical - particularly for last-minute bookings
- Static base rates and tariff structures that do not optimize full revenue potential
- Inability to respond quickly to changing market conditions, such as through promotional offers or a sudden surge in demand
- Lack of real-time feedback on booking confirmations or shipment monitoring, for example, leading to intensive and costly manual intervention for follow-up activities. All this while customers wait for extended periods just to get their bookings confirmed.
Dealing with legacy technology´s limitations involves costly and inefficient workarounds, particularly when it comes to data. Looking at this in the context of today´s data-driven economy, where enterprises are doing all they can to maximize the use of data, it becomes evident that this is the big opportunity cost of staying with legacy technology. Modern design principles and cloud-based capabilities enable new generation IT systems to provide rich features to mitigate these issues. The impact of the above pain points on customer and user experiences, and overall business performance, is clear.
Air cargo's digital transformation
New online cargo sales channels have begun to appear that seek to address current industry shortcomings. Forward-looking carriers are leading the digital transformation drive and have already undertaken massive system overhauls to take their cargo businesses to the next level. As key airline partners and players in the logistics supply chain, large freight forwarders are following suit. The race is on to eliminate dependency on heavy manual intervention and paper-based processes, improve data quality and integrity, transform customer and user experiences, and enable better collaboration across the value chain. Establishing real-time connectivity between cargo airlines, freight forwarders, and these new sales channels allows:
- Better forwarder experience through instant confirmation of bookings
- Opportunities to maximize and optimize revenue potential through dynamic pricing
- Faster time to market for innovative, high-premium products and services
- More agility and data-driven insights that accelerate responses to changing market needs
- Ability to roll out marketing campaigns and promotional offers to specific high-value partners
- Reduced manual intervention-driven inefficiencies, costs, and human errors through automation.
Overall, the digital transformation we are witnessing enables cargo airlines to offer smoother and more differentiated experiences for their valued forwarder customers. Activities across the value chain can be tracked and monitored in real-time. Analytical tools enable data-driven insights by helping understand customer preferences, profitable rates, seasonal demand variations, and much more. And ultimately, automation allows sales teams to focus on more strategic activities rather than getting bogged down in operational and transactional tasks.
Key considerations for the road ahead
Extracting the full benefits and opportunities of the emerging digital features comes down to having the right technology and being open to changing established work habits. While replacing legacy technology with best-of-breed applications can boost specific advantages, hyper-connected end-to-end platforms drive efficiencies and collaboration across the entire value chain.
To extract digitization´s full benefits when embarking on transformation journeys, there are several factors air cargo carriers should consider, including:
- Identifying those untapped geographies and customer segments that, when addressed through the right digitization initiatives, can help you meet your business' growth goals
- Adopting development and integration approaches based on the "build once, deploy many" principle to achieve quick results, faster time to market, and greater penetration across ever-growing sales channels and forwarders
- Taking advantage of reusable, scalable, and light-weight technologies, such as APIs, that allow greater flexibility and facilitate adoption
- Being equipped with the right set of tools to continuously derive insights and act on them
- Creating a community-driven development model through participation and alignment with emerging common standards such as ONE Record. Adhering to common standards facilitates efficient and large-scale adoption across the value chain to drive growth.
Ajith Pancily Poothiyot forms part of the Product Management & Strategy vertical at IBS Software and heads Special Initiatives for Airline Cargo Solutions. In his current role, Ajith spends most of his time building products that enhance partnerships and collaboration in the air cargo supply chain. He comes with 10 years of experience in product strategy, product management, thought leadership, and corporate planning. Ajith holds a Masters in Management from IIM Udaipur and an undergraduate degree in Electrical & Electronics from NIT Calicut, India.