Air cargo accounts for 35 per cent of the value of global trade despite carrying only 1 per cent of trade volume. For an industry with this enormous potential to carry anything quickly between two countries, 1 per cent of trade volume is still less. This means there are hindering factors for growth. Technology comes as an enabler to connect the missing part of the puzzle. Some aspects are non-negotiable priorities that can also be addressed through technological adoption. However, there are obstacles to achieving 100 per cent digital adoption.
The IATA e-freight initiative was launched in 2006 to establish an end-to-end digital documentation process in air cargo movement. This initiative also aims to promote a collaborative working environment, thereby making way for fewer errors and more than 90 per cent accuracy. On the other hand, the European Union comes up with mandates to ensure the sustainability of the overall process, such as the EU Deforestation and Carbon Tax. Due to all these factors, airlines, operators and others actively insist on going digital for processes such as electronic air waybills, electronic manifests and other key documents.
Apart from regulatory pressures, each stakeholder demands transparency and real-time visibility of cargo movement. However, very little has been achieved so far in terms of making the airport cargo precinct visible to the stakeholders. Additionally, the excitement surrounding Artificial Intelligence (AI) is driving airport operators to integrate digital technologies enriched with AI. Consequently, the demand for digital readiness has never been higher.
Sustainability has become a non-negotiable priority. It’s no longer a “nice-to-have” but a critical business imperative. Minimising fuel consumption, optimising routes, and reducing carbon emissions are essential goals. Achieving these requires leveraging advanced technologies like AI and IoT, which help optimise operations and monitor environmental impact.
Currently, the processes are unorganised to a large extent, and they offer a challenge for the industry overall. For example, managing terminal operations alone is significantly unorganised. The terminal operator or the ground handler finds it challenging to handle a massive inflow of trucks at a given time. Therefore, stakeholders continuously seek standard operating procedures to enable better operations management in a sustainable manner.
Challenges to 100% digitalisation
Semi-digital processes
Semi-digital processes in air cargo, where manual steps persist alongside digital tools, create inefficiencies and data silos that hinder end-to-end visibility. This fragmented approach slows down workflows, increases error rates, and limits real-time collaboration across stakeholders. As a result, the transition to fully integrated, automated systems is delayed, impeding the industry’s digital maturity and ability to respond swiftly to evolving customer and regulatory demands.
Cybersecurity concerns
Cybersecurity is a major concern as the air cargo industry accelerates digital transformation. With the increased adoption of connected systems, IoT devices, and cloud-based platforms, air cargo operations are more exposed to cyber threats such as data breaches, ransomware, and hacking attempts. These risks can disrupt logistics, compromise sensitive shipment data, and undermine trust among industry stakeholders. Patchy cybersecurity protocols and a lack of industry-wide standards further heighten vulnerability, especially in a global network with varied digital maturity. Proactive investment in robust cybersecurity measures, regular staff training, and international collaboration are essential to safeguard operational continuity and protect critical information assets.
Cost involved in infrastructure
Cost remains a significant barrier to the air cargo industry’s digital readiness. Implementing advanced technologies such as automation, IoT devices, and an integrated management platform requires substantial upfront investment, which can be prohibitive for smaller operators. Ongoing expenses, including software licenses, cybersecurity, system upgrades, and staff training, add to the financial burden. Furthermore, the uncertain return on investment (ROI) and the need to upgrade existing legacy systems deter many stakeholders from rapid digital adoption. Without sufficient financial resources or clear incentives, the industry’s shift towards digitalisation risks becoming uneven and slow, limiting competitiveness and global operational efficiency.
Technology as an enabler for digital readiness
Technology disruptions, particularly in AI, are reshaping the industry. Predictive AI, used for forecasting cargo volumes and optimising schedules, has matured. Now, generative AI is emerging, offering transformative potential across operations. Computer vision is already being utilised in warehouses to track ULDs and volumetrics. Natural Language Processing (NLP) and Intelligent Document Processing (IDP) further streamline processes, automating shipment tracking and data entry tasks. These advancements reduce inefficiencies and free up resources for strategic initiatives.
The industry faces a choice: operate as a commodity-focused on volume and low prices or become a boutique provider delivering specialised, high-quality services. Overlapping services blur traditional roles, while new technologies promise transformational change. The path forward is clear, i.e., innovate, collaborate, and adopt strategies that optimise costs and revenues.
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