Anish Kapoor, sr EVP – travel, hospitality and logistics operations of Teleperformance India, throws light on how logistics companies and air cargo carriers are increasingly adopting disruptive technologies into their processes to optimise supply chains
Guest Post: Transforming air cargo through digital transformation
Despite air travel taking off once again in the aftermath of the pandemic, especially for hospitality and leisure, challenges persist in the sector. The air cargo sector may have experienced a post-pandemic ‘gold rush’ back in 2021, but ongoing supply chain disruptions are complicating day-to-day operations. Issues such as unreported cargo volumes, aircraft space availability, freight capacity, fuel costs, facility space, handling, and delivery continue to surface.
This is a difficult situation, as air cargo is the most sought-after logistics channel, and a vital component to the global supply chain. It is responsible for moving goods around the world quickly and efficiently, whether that be food, raw materials, or essential medicines. Yet, despite facing challenges, global air cargo traffic is forecasted by Statistia Research to grow 4 percent per year from 2020 through to 2039. In this same period, global airmail and airfreight traffic are expected to increase by 1.7 and 4.1 percent respectively.
In fact, Boeing projects an 80 percent demand in wide-bodied aircrafts – an extra 2,800 freighters – over the next 20 years. To counter these challenges and meet rising demand, air cargo and logistics businesses are turning to technology and transforming digitally. With advancements, adaptations and innovation, the air cargo industry is poised for significant changes in the coming decade.
Implementing digital one-office for air cargo
It is widely understood that supply chains are tricky, complex, and prone to disruptions. Many logistics providers often fail to have full oversight of the end-to-end journey of goods – spanning from the warehouse, to transportation, and, finally, to the end user’s doorstep. This process intensifies during seasonal spikes like Christmas, where there is a surge in goods needing transportation.
The solution lies in eliminating unproductive silos by digitally integrating the front, middle, and back-office functions to make operations simpler, faster and safer. By doing so, logistic companies and air cargo providers can achieve full oversight, and streamline the end-to-end business operations, boosting efficiency.
By having full visibility across various silos, leaders are empowered to make proactive decisions grounded in real-time operational data insights. With an increased need for logistics to match the rapid shifts in technology and demand, every segment of the supply chain must synchronise to refine processes and augment employee agility.
This unified strategy, guided by expertise, allows logistics providers and air carriers to streamline their cargo procedures, opening the doors for specialist freight airports to introduce services into the supply chain for additional revenue streams.
Air cargo automation for data-driven intelligence
Cargo revenue is expected to reach $149.4 billion in 2023, down from $201.4 billion in 2022, but this is still about 50 percent higher than its pre-pandemic levels, according to IATA.
It also predicts that global air cargo volumes will decline 4 percent year-on-year in 2023 due to economic slowdown, and because of under-reported volumes, inaccurate declarations, and the lack of real-time tracking. These oversights, often stemming from human error in manual processes, can compromise loading efficiency, and even result in storage fees. To address this, it is vital for logistics businesses to blend their team’s human expertise with the power of advanced technology and data-driven insights – what we call a truly ‘High-Tech, High-Touch’ approach.
Air Cargo providers who embrace digital transformation and integrate advanced technologies are clearly leading the way in today’s digital era. Fully autonomous robotic inventory management systems, implemented through the one-office approach, can minimise the risk of human error. The rise of technologies such as sensors and trackers for package monitoring, and scanners for cargo capture, is evident. These tools produce highly accurate, real-time data, allowing full visibility to freight workers and preventing supply chain hiccups. Such data provides actionable insights and empowers decision makers – for example, if they see a package is often being held up at a certain point, they can put in place proactive measures to prevent this, or give more accurate delivery estimates. This transparency also fosters a happier end-user experience, by granting them insights into package location and expected delivery times.
Automation technologies and robots are revolutionising inventory management by conducting nightly audits for inventory checking and generating reports that pinpoint UTLs (unable to locate pallets), misplaced goods and rack occupancy levels. By automating these routine and time-consuming tasks, warehouse employees are freed up to tackle tasks that are more complex. Moreover, this data provides more accurate space and air carrier forecasting, and maximises the volume of cargo handled, ensuring smoother and more efficient operations.
The potential of AI for simpler, smarter and faster operations
The standout buzzword, Artificial Intelligence (AI), is shaking up numerous industries. Elevating services beyond mere automation, AI is taking it to the next level, by enriching business operations, services and customer experiences. By leveraging AI, businesses can deploy advanced solutions such as machine learning and data analytics, to automate back-office functions, improve customer interactions, and gain valuable insights from vast data sets. Particularly, AI has the potential to revolutionise the logistics and air cargo sectors in a number of transformative ways. AI can fine-tune routing and scheduling, leading to streamlined cargo operations. For instance, if there is a spike in raw materials, there’s likely a subsequent rise in transport demand. AI can spot such nuanced patterns, prompting workers to secure additional carriers.
By analysing real-time data, including flight patterns, weather conditions, and cargo demand, AI-powered technologies can guide both humans and cargo airlines in making smarter and more informed decisions regarding flight destinations, timings, and load factors, all of which directly affects the bottom line.
In a time of surging demand for air cargo carriers, AI is pivotal in averting aircraft shortages. Using predictive AI, providers can use sensor data to predict when specific aircraft components might require servicing or replacement. This not only curtails supply chain disruptions, but also avoids expensive repairs. Such proactive measures are essential for cargo airlines aiming for expansion and keen to maintain a competitive edge.
The future of air cargo
In the world of logistics and air cargo, there is an intensifying urgency for strategies to promote efficiency, transparency, and reduce hitches. Through embracing a one-office approach to fuel automation and AI-powered processes, carriers can turn to trusted partners that provide simpler, safer, and faster solutions to optimise supply chains.
As humans and technology become increasingly intertwined, championing this fusion of high tech with a personal touch will serve as a definite catalyst for business expansion.