TF Spotlight: Sophisticated platforms like Cargo Community Systems should not be optional
There is no doubt that Airlines are shocked and decimated financially due to their inability to cope with a pandemic, yet air cargo stood out in its value in supplying needed medical and components to keep the industries working. 60% of all cargo was in passenger’s bellies pre-COVID, and suddenly that was gone; now, major Airlines that fly so-called Pfreighters (pax aircraft, cargo only) to try to generate some needed revenue are the most profitable divisions. My question to any CEO of Airlines reading this; has this convinced you to make cargo now a core business going forward, were any lessons learned?
The most underrated product in air cargo is sitting beneath every passenger’s feet, belly cargo space on a direct flight between any two Airports, especially those that operate on intercontinental and longer-haul routes. Nothing Fed Ex, UPS, DHL Express, Amazon and Ali Baba offer as a product can be moved faster than on a direct flight to its destination. The missing elements for our industry to exploit this advantage are all on the ground, at Airports and with GHA. The major key missing element is Cargo Community Systems and compliance with paperless technology. The entire Logistics world works that way except us; scheduled carrier cargo capacity, which is direct and point-to-point, is flawless in potential. Yet, it is the only means of transport that is so fractured it cannot see what is about to hit them or the opportunity this USP presents. The world has changed; hopefully, we are ready to change and embrace technology.
Airports have always built warehouses based on “Dwell times”, meaning how long cargo dwells in that facility. In present times, air cargo should not dwell any longer than a few hours. Transit cargo should be handled with the same rapidity as passenger baggage; the solutions are there, we know how to do it, and it will happen. ACS is a major part of the solutions in a new business model. It can comply with demands for assurance of time, transparency and only then price. The Airports must make cargo facilities their marketing tool for their clients for the Airlines and GHA tenants to stay competitive and relevant.
Governments are moving with speed to promote trade facilitation; security regimes are being tightened not just for terrorism but also for economic security reasons. If the Airports are to serve their major clients, the Airlines must give them the capability to introduce high-value products and verticals such as e-commerce, express, and cool chain. There is only one way to do that effectively, through automation and sophisticated data systems such as an ACS. In my opinion, it should not be optional. For the greater good of the Airports, the total community should take precedence.
We saw a changing landscape for global air Logistics before COVID, and anyone who did not use and appreciate the benefits as a consumer of e-Commerce products understands it well now. What COVID-19 has done is advance the business case for e- Retailers and platforms that cater to that business, such as Amazon and Ali Baba, by 3 to 5 years from prior expectations. B to B, business was approx. 70% of traffic before COVID and B to C 30%. Major integrators now report it’s more like 50/50, a huge shift in consumer behaviour for normal consumers like you and me. Will we go back to shopping in malls or the High Street after COVID? Perhaps for the social experience, but no one is going to return to the ways of old.
To date, the primary air Logistics beneficiaries of the e-commerce boom have been the integrated express carriers (e.g., FedEx, UPS, DHL) and e-Commerce retailers’ in-house air operations (e.g. Amazon Air). Passenger Airlines now have an important opportunity to penetrate this market. To do so effectively, however, they will need to offer specialised processing services tailored to e-commerce, including enhanced tracking and tracing, rapid clearance, last-mile delivery, and — above all else — speed and reliability in delivery from end to end. Cargo revenue is as much a function of the value of the cargo as volume. Passenger Airlines have an opportunity to attract the highest-value commodities, which can generate significantly greater revenue by focusing on the quality of the services offered.
Data exchange capabilities resulting in solutions offering speed, transparency, and quality for Airlines and Airports are paramount. Strategic Aviation Solutions International (SASI), in response to the unprecedented changes required in air Logistics, has been building successful content for the original training. SASI has been adding extensive material on economic sustainability for all stakeholders in the air Logistics chain, with an emphasis on Airlines, Airports, GHA and GSSA, beneficial cargo owners, forwarders and any other stakeholders participating in a possible seamless solution, and CILT U.K certified (The Chartered Institute of Logistics and Transport Professional). SASI has also provided training and learning programs directly with individual entities such as Air Canada, Southwest Airlines, Hawaiian Airlines, and WFS Americas.