19 Jan The 1st step to safeguard the future of air cargo
International Air Transport Association reports that 52 million metric tons of cargo are transported every year through Air transport. In a nutshell, this accounts for 35 percent of global trade by value and US$18.6 billion worth of cargo every day. But the industry is bleeding due to numerous challenges, such as visibility, congestion, lack of efficiency, and cyber threats. Even though there has been an initiative to overcome all these challenges on a micro-level, these challenges persist even today in major airports across North America.
A whitepaper presented by the Airforwarders Association (AfA) and the National Customs Brokers and Forwarders Association of America (NCBFAA) identified five essential focus areas to address these challenges effectively. These recommendations are supported by six-point criteria to achieve the most optimal solution.
Technology and automation
Having a digital infrastructure or at least having a digital communication framework is necessary in today’s world. However, the rate of adoption in North America is sluggish, and the reluctance to technology adoption is way too high, as stakeholders believe there is a high investment risk.
The whitepaper suggests that technology adoption and automation in some of the logistics processes must be made mandatory. Therefore, the implementation of cargo community systems and single window solutions will soon become mandatory for all stakeholders. This way, 100 percent digitization will soon be achieved across airports in North America.
Apart from making a community platform essential, stakeholders are required to utilize point solutions too, so that they can address specific pain areas that fall beyond the ecosystem’s purview.
Infrastructure
It is seen that some of the major airports lack infrastructure, even though they lack some basic facilities or are not equipped with a large cargo terminal to handle the huge load. Hence, the whitepaper raises questions such as,
Are the cargo buildings appropriately sized for the number of carriers being handled and the cargo volume of ULD and loose freight passing through the facilities?
Is there sufficient access from the highway system to the airport, access from the airport to the cargo facility, and an appropriate trucking apron for truck queuing and manoeuvring?
Both associations believe these questions can be answered when digitization becomes a part of the infrastructure.
Levels of service
It is noted that in several instances, the level of service isn’t in-depth to meet the demand-supply gap. Industry experts believe that this lack of depth is due to poorly defined service standards. Therefore, there is a need to define these standards and technology intervention will have a significant role to play here as well.
For example, with a cargo community system in place, the service standards can be defined with a mandatory framework so that the service providers adhere to the standards by default. There are real-time examples in some of the major airports in North America and Asia Pacific with well-defined service standards utilizing technology adoption.
Policy, regulations and guidelines
Post the pandemic outbreak, regulatory guidelines are more focused on facilitating trade, even during adversities. Every day, we see a new guideline coming from a regulatory authority that stresses the utility of a digitization initiative or a guideline to adhere to. The document stresses cooperation from each stakeholder so that the initiative achieves 100 percent results.
Staff shortage and resource management
Unique labour dynamics in the air cargo industry were a burning issue during the peak pandemic time. Reportedly, during the peak time, the government had announced unemployment benefit schemes that were a disincentive for some staff to return to the workforce. However, not everyone was ready to take the risk. As a result, there was a shortage of staff, and even today, the ripple effects are felt in some regions worldwide. According to industry estimates, staff shortage at the peak of the COVID-19 lockdown was 30 percent.
Since then, the need for technology adoption has been soaring. However, stakeholders are reluctant to go digital as they see it as an investment. Therefore, the whitepaper suggests that staff shortage can be tackled by automating processes.
Safeguarding the future
The document is a revolutionary initiative and analyses the impact of each and every action taken by a service provider and a regulatory body. By accepting the facts mentioned in the document, the industry will significantly benefit and achieve higher business synergies. However, it is up to the stakeholders and regulators to take it forward and shape a framework to implement all the positive transformations mentioned in the document.