1. Air cargo has proved to be the game-changer during the pandemic. Will this attention stay or fade?
As quickly as cargo became the hero for the airline industry during the COVID-19 pandemic, it has already lost its appeal and heading back to pre-pandemic status.
In a recent GHI presentation, “Precious Cargo”, where I had the opportunity to address the audience, we agreed that the air cargo is the hero of 2020 & 2021 seems now to be “precious memories”.
Air cargo will continue to grow, but I don’t know if it will continue to be considered as “super hero” for the airline and supply chain industry, even though we are witnessing many ocean carriers getting into the airline business. With the continued stagnating conditions in the supply chain, air cargo will remain a leading supply chain link, and I don’t think this will fade anytime soon. After a country or port comes off of lockdown, cargo needs to move in the quickest way possible to catch up with the demand of essential merchandise and materials. Air cargo will come to the rescue. Although moving cargo by air is much more expensive than ocean, sometimes the cost of not having the needed material far out ways the cost of losing the sale or inability to manufacture a product.
2. How are technology and cost reduction related?
Technology allows for advanced sharing of shipment information, which in turn allows all stakeholders to better prepare for the next status. Having the ability to prepare in advance gives the ability to reduce cost, as complex decision making can be carried out to avoid additional cost, which is required for unexpected shipment processing. We can reduce labor cost using technology, allowing entities to better position their staff to offer exceptional and well-planned customer service. Using a technology like the Kale ACS not only reduces cost, it helps the environment too. We did a study in 2021 where we positively identified how our cutting-edge technology reduced labor costs, increased transfer efficiencies, and reduced fuel consumption and CO2 emissions. Using our PING technology can help save thousands of trees by replacing the paper AWB with electronic data. This technology also reduces airline and handler cost because a counter staff agent doesn’t enter the AWB data manually for the manifest.
With technology, PING converts the PDF of the AWB into the proper XML format and reduces the time it takes the agent to check in the driver and reduces the amount of time the driver will have to spend at the terminal, dropping off air cargo.
3. There is a growing trend of freight services expanding. How do you see this altering the Air cargo industry?
The air cargo industry is truly at an evolutionary stage with the development of UMA (drones) and air cargo ships. Several companies are already testing final-mile drone deliveries with great success. The biggest hold up for more use of these UMAs is regulatory requirements.
Companies like Natilus and Boeing have manufactured all-cargo aircraft that move in a fraction of the time we currently know that these aircraft can carry 50-60% more cargo than the current all-cargo aircraft, thus increasing capacity for the growing air freight industry, which includes e-commerce business. There have been over ten new airlines opened in the past two years, including some in the US–Breeze, Avelo, and Aha! As mentioned above, ocean carriers such as CMA CGM are getting into the air cargo business. As freight services in other modes expand, so will air cargo services. Air cargo is growing to a point where some states and cities are opening cargo only airports. Many of these ports are looking at investing in technology, or digital infrastructure, upfront, to assist them in maximizing their sometimes very limited physical infrastructure.
4. How has the pandemic changed the dynamics in the Air Cargo industry? Please throw some light pertaining specifically to North America?
Absolutely, and very much in the e-commerce world. There was more online shopping in the past two years than in the previous 10. I do not see this trend changing much in the near future as people have become very comfortable having everything from clothes to food delivered directly to their doorstep, and many times on the same day as ordered. While we are getting out of our homes more, we are still very reliant on and enjoying the “door delivery service” we have embraced over the pandemic years. The air cargo industry in North America continues to maintain its stability and continue to be an economic driver in Logistics whether it gets its true recognition from the air cargo industry or not.
The pandemic still plagues the air cargo industry’s workforce. I was travelling recently, and there was such a shortage of airline staff at the airport that 38 flights had to be cancelled. When this happens, a domino effect takes off. Not only are passengers inconvenienced, but cargo stops moving, too. Depending on when the next flight is flying out for a particular destination, there could be a need to move the cargo via a different mode of transportation.
Many final destination moves for international air cargo in the US are completed on trucks. Having to move additional, unplanned air cargo because of flight cancellations puts a strain on that link of the supply chain too, which is also short-staffed and suffering. The cargo arriving unscheduled at the air cargo terminal continues the domino effect, as the handlers also start feeling the staffing woes created by the pandemic.