Category Archives: Ignazio Coraci

Cargo News, Ignazio Coraci

Customer insight is key

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The future of the air cargo industry will depend on our ability to listen to customers – and to then apply the insights we gain to create systems and processes that put their needs at the heart of the way we all work. That was the main focus of a speech made by Alexandre de Juniac, Director General and CEO of the International Air Transport Association (IATA) when he spoke at this year’s 11th World Cargo Symposium in Abu Dhabi.

Progress required

Mr de Juniac made the comments on the back of a positive start to the year for air cargo markets around the world – which has seen growth on the up after a number of years of stagnation. However it is clear that much of this growth has happened despite – rather than because of – the systems that the industry uses. This needs to change, says Mr de Juniac – with the focus falling on two key areas where real progress can be made – firstly introducing simple, modern electronic processes, and secondly looking at how our businesses can quickly and flexibly meet specific customer needs.

Time to listen

“Listening to the customer has never been more important,” he says. “The positive forces currently supporting growth are good news. But our customers are telling us that they expect more. Complicated and convoluted paper-based processes that are basically unchanged from the 16th century are still being used in air cargo today. Our customers pay a premium to ship by air and they rightly expect modern processes and high quality services.”

Rapid response

“Shippers today want responsive services based on intelligent systems able to self-monitor, send real-time alerts and respond to deviation. Technologically speaking, this is totally possible. The key to this and other innovations is using data efficiently and effectively. Finding solutions to unfulfilled (or even unrealized) expectations creates value for customers. And that propels a business forward.

Time to work smarter

Ignazio Coraci comments: “Technology offers so many potential solutions to problems that are currently detrimental to the experience that air cargo customers are having. Much of this technology already exists – or will do very soon – and it’s absolutely critical that as an industry we doing everything we can to embrace this and improve the service we provide.”

Cargo News, Ignazio Coraci

Encouraging growth continues

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Growth in air cargo demand is often a sign of better economic times to come – as companies focus on restocking their inventories quickly. So, the recent news that air freight markets around the world are reporting increased demand in April 2017 is certainly welcome, although the picture isn’t completely positive.

Demand is up

But back to those figures – according to the International Air Transport Association (IATA), demand rose for air cargo rose by 8.5% in April this year. The report explained that while this figure is down from the 13.4% year-on-year growth that we saw in March this year, it’s much better than the average annual growth rate of 3.5% that we’ve experienced as an industry over the past five years. However the report from IATA also said that growth in freight capacity, measured in available freight tonne kilometers (AFTKs), slowed to 3.9% in April 2017.

A positive start

Despite this, it seems that the overall state of the industry is in reasonable shape, and the good numbers continue to build on an already positive start to the year. Every region – with the exception of Latin America – has seen year-on-year increases in demand so far this year. This has been driven in particular by the very healthy freight volume figures seen in Asia-Pacific – which has expanded by 8.4% in April 2017 compared to the same period in 2016. Capacity in the Asia-Pacific region has also increased by 3.7%.

More work needed

The report from IATA sounded a note of caution however. They have suggested that there is still plenty of work to do in the air cargo industry if it going to turn these encouraging figures into a sustained upturn.

Seize the moment

Ignazio Coraci comments: “While the growth rates we’re seeing are very encouraging, we really need to make sure that we take this opportunity as an industry to look again at our processes. Modernisation is key here – let’s make sure that we use the growth and progress that we’re seeing at the moment in air cargo markets worldwide as a catalyst for change across the industry.”

Cargo News, Ignazio Coraci

Service matters in an automated future

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We’ve spoken before about the need for an investment in technology to bring the air cargo business into the 21st century. But it’s also worth considering what kind of changes that technology will bring to the industry, and how it will impact possibly the single most import aspect of all the work we do – the service we give to our customers.

A look ahead

So how different will the air freight industry look in five years’ time? What impact will an increasing investment in cutting technology have had on the way we all work? And what opportunities do the trends in the industry present for those companies looking to get ahead of the competition?

An automated future?

A recent survey by online booking portal Freightos of nearly 70 freight forwarders has provided some intriguing answers. Many of the respondents asked – 75% – thought that future of air cargo looked very much like the revolution that has transformed banking. The model for many banks today is build on a high degree of automation, with a personal touch when it matters. Many of the freight forwarders suggested that processes will become largely automated, and that much of the physical process of actually moving goods from A to B will be handled by technology like automated stowage and self-driving forklifts.

It’s a picture of an industry that’s very different from today – but one that holds many opportunities.

Service will define us

Ignazio Coraci comments: “As our industry becomes increasingly digitised and automated, those real-life touchpoints between the customer and the forwarder will become ever more critical. Good customer service will be a key differentiator for people choosing between different air cargo operators – and that is a real opportunity to gain a business advantage for those companies who invest wisely.”

Cargo News, Ignazio Coraci

Investment in technology is key

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It’s fair to say that the air cargo isn’t noted for it’s rapid adoption of technology to make systems and processes more efficient and less costly. And according to Dheeraj Kohli, vice president and global head of travel and transportation for Unisys Corporation, the industry may soon start to pay the price, if it doesn’t get up to speed rapidly. Speaking to Air Cargo News, Mr Kohli wrote about how inefficiencies are now starting to hurt the bottom line.

Growing concerns

“Respondents to a 2015 air cargo survey stated that process inefficiencies are leading to a widespread inability to optimise revenues,” says Mr Kohli. “Three out of four air cargo executives said that this has contributed to revenue leakage and over half surveyed believe it has led to problems with pricing integrity and consistency.

“In an increasingly complex economic landscape and highly competitive global marketplace, the airfreight industry must reassess how it can use technology to create more innovative and adaptive business models. Not only that, it must abandon a previously conservative approach to IT investment.”

Slow to catch on

To make matters worse, many of the solutions that could streamline the air freight industry are already available – the issue is that many companies have been slow to adopt them. The picture isn’t all bad however – Mr Kohli points to IATA’s hard work on promoting the “e-freight” campaign as a positive first step.

“While current e-Air Waybill (e-AWB) penetration is on track to hit the 2016 year-end target of 56% set by IATA, it is only the first step towards a more technologically-integrated future for air cargo,” he says. “There are a multitude of other technological innovations that the industry has so far only briefly flirted with.”

Investment needed

These include everything from an automated system that classifies cargo as soon as shipment data is available through to an integrated cargo pricing system, but the industry needs to invest and approach the technology with an open mind.

Ignazio Coraci comments: “Technology offers boundless opportunities for us to streamline our business – but the will to adopt and invest in these innovations has to be there. As an industry we all need to work more closely together to find ways of integrating new technologies into our systems and processes.”

Cargo News, Ignazio Coraci

A positive outlook for the US

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While this year has been a politically volatile one for the US – with a new president and jittery markets – the North American air cargo industry has got off to an encouraging start in 2017. There are some caveats to the good news, with indications that cargo demand rates haven’t improved as rapidly as last year and that revenues per cargo tonne have taken a hit – but overall the picture is encouraging.

Top performers

Take the performance of the three major US carriers, United, American and Delta. A snapshot of their numbers shows that they’ve seen rapid increases in cargo demand in April. with the largest of the three – United – showing an impressive 19.5% year-on-year increase in demand during April with 265m cargo ton miles (CTM).

The global picture

The positive start has been matched by global growth overall in the industry, hailed recently by Alexandre de Juniac, the International Air Transport Association (IATA)’s Director General and CEO.

“It’s been a good start to the year for air cargo. Demand growth accelerated in January, bolstered by strengthening export orders. And that outpaced the capacity growth which should be positive for yields. And, longer-term, the entry into force of the Trade Facilitation Agreement (TFA) will cut red tape at the borders for faster, cheaper and easier trade. The onus is now on the industry to seize the opportunity to accelerate the modernization of processes to make air cargo an even more compelling option for shippers.”

A platform for growth

SW Italia’s Ignazio Coraci comments: Clearly, the US market is one that is very important to our business. It’s encouraging to see that the numbers bear out what we’ve experienced so far this year – a positive increase in cargo and a great base to build on for the rest of the year.

Cargo News, Ignazio Coraci

A threat – or an opportunity?

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It’s been called the ‘New Silk Road’ – a massive infrastructure programme, led by the Chinese, that will bring together the economies of the Asia-Pacific region through new roads, pipelines, ports, high speed rai links and fibre optic cables. The project – formally known as One Belt, One Road (OBOR) – is set to transform the region and create a new economic powerhouse.

A growing pattern

It’s within this context that DHL’s recent addition of another rail connection to Belarus and the establishment of the first regular connection between Shenzhen in China and Minsk has important implications for the air cargo industry. The new route follows a pattern of investment in rail services between the Far East and Europe over recent years, and will make use a rail system that now connects a number of cities in China with Europe. So what does this mean for the air freight business?

A threat to air cargo?

Clearly the new boom in rail links poses a threat to the air cargo industry: rail is quicker than shipping, and can be around 80 per cent of the cost of air. There will be a growing challenge to the air cargo industry in the coming years as customers see the opportunity to take advantage of the lower costs but slower transit times of rail versus the higher costs but faster turnaround of air freight.

An opportunity for all

ASC Cargo‘s CEO Ignazio Coraci comments: “As an industry, we should see vast infrastructure projects like the OBOR as an opportunity for everyone. While it’s clear that the growing capability to move freight by rail could be seen as a threat to the air cargo industry, I believe firmly that there will still be a role in future for the fast turnarounds and efficient service that air cargo offers. The growth that projects such as this will bring to the region with its booming economies, will ultimately benefit everyone – our industry included.”

Cargo News, Ignazio Coraci

Simplifying the Business

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IATA’s flagship Simplifying the Business (STB) programme has transformed the passenger airline industry – now it’s time for cargo.

The passenger airline industry has transformed over the last decade or so – think electronic ticketing, barcoded boarding passes, mobile boarding passes and self-service check-in. But it’s also fair to say that the air cargo industry has sometimes struggled to keep up with the pace of change.

An inefficient process

The air cargo business is a complex one – and there are multiple points along the journey that a piece of freight takes that can cause issues for our customers, from inefficient and complex paper-based systems to a lack of transparency.

The industry transformation programme announced by IATA is all about improving two key areas – the service that air cargo carriers provide, and the efficiency of that service. The stated aim of Simplifying the Business (StB) for Cargo is to make air cargo easier, smarter and faster.

Areas of focus

Celine Hourcade, head of cargo transformation at IATA, laid out some of the key issues that the new programme will focus on – the areas of visibility, creating modern processes and making the booking procedure faster.

To achieve these aims, Hourcade explained that the project would be looking at five projects that, if implemented properly, could transform the industry –

These were e-freight, which uses electronic documentation; digital cargo, which would create a shared digital record; interactive cargo, which would share data and improve visibility; smart facilities to drive excellence and an air cargo incidents database.

The right approach

Ignazio Coraci of SW Italia comments: “The Simplifying The Business programme already has a great track record in the passenger industry, and it’s to be hoped that the successful approach taken to transform that area of the business can be just as successful with air cargo. The key is for everyone in the industry to approach the future with an open mind – the opportunities are huge if we go about this the right way.”

Cargo News, Ignazio Coraci

A time to transform

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The annual CNS Partnership Conference is an important date in the air cargo calendar, and this year’s event was a chance to reflect on the pace of change in our industry.

Air cargo is a hugely complex business. It’s a $100 billion industry that can sometimes seem to move incredibly slowly, particularly where technology – and change in general – is concerned.

Slow to adapt

These concerns were touched on recently at the Annual CNS Partnership conference. The event – one of the premier events in the air cargo year – is an opportunity to bring together hundreds of the world’s leading air cargo professionals to discuss the latest developments in the industry.

This year’s keynote address was given by Ryan Petersen, the CEO of Flexport. His is a business that reflects the changing face of our industry – a software-driven freight forwarder that is at the forefront of modernising the business. Yet, as he pointed out in his speech, the industry is sometimes slow to change.

“Airlines offer something nobody needs,” he said – they “move cargo from airport to airport, but every single piece of cargo must go door to door.”

A patchy service

Petersen’s comments were echoed at the event by Blake Bowlin, global transportation procurement manager at Caterpillar. “The quality of supply chain is hit or miss,” said, adding that “Airport to airport is fine, but we look at it from a door-to-door perspective.”

This goes to the heart of one of the major issues facing the industry – that while shippers are looking for a door to door service, the complexity of air cargo with its multiple hand-offs makes this incredibly complicated.

A digital future

Unsurprisingly, given Flexport’s software-driven approach to the future of forwarding, Petersen used the speech at the CNS Partnership event to look ahead at how technology might transform our industry for the better. He talked about the potential impact of technology that can reroute cargo in transit, and autonomous, programmable freight that can even make its own decisions on the best route to the end customer.

An open approach

Ignazio Coraci, CEO of SW Italia comments: “The way that we adapt and integrate these new technologies into our industry, simplifying the complex processes and ultimately improving the quality of service for our customers is critical. We need to be flexible and open, while creating a robust network of interconnected systems that help our experts on the ground to do their jobs even better.”

Cargo News, Ignazio Coraci

Hong Kong keeps top spot

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A vital part of ASC Cargo and SW Italia’s business – Hong Kong airport – has once again been named the world’s busiest cargo hub. Ignazio Coraci comments.

There were many uncertainties in 2016 – the Brexit vote, the election of President Trump and a generally more protectionist approach to global trade – but the second half of the year still marked an upturn for air cargo markets.

A positive outlook

Airports Council International – who run an annual review of the world’s 20 leading cargo hubs – have released figures that point to a confident mood in the industry. According to their latest study, much of this positivity is down to inventory build-ups and increased export orders – something that should last for the short term at least.

Leading light

There’s nowhere that this confidence is more evident than in the airport named as the world’s busiest air cargo site – Hong Kong. While the rest of the air cargo industry saw throughput increasing by 3.3% last year – up to 47.4m metric tonnes – Hong Kong saw traffic increase by 3.5% to 4.6m tonnes. The impressive figures for Hong Kong were one of the highlights of Airports Council International’s report that ranked the top 20 cargo airports for 2016 along with the preliminary world airport traffic rankings.

Strong signals

Ignazio comments: “Importantly for ASC Cargo and SW Italia’s business – and for the air cargo industry as a whole – Hong Kong’s continuing strong performance has shown that businesses are feeling increasingly confident about the future. In addition to the encouraging figures for Hong Kong, airports in the crucial US market also appear to be performing strongly, with Memphis, Louisville, Miami, Los Angeles and Chicago all appearing in Airports Council International’s top 20 for 2016.”

Cargo News, Ignazio Coraci

A more agile future?

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With proposals for new regulations on the use of small drones for commercial use in the pipeline, Ignazio Coraci gives his thoughts on the implications of this technology for the future of the air cargo business

The future may very well be unmanned. Whether drones will ever replace the full scale aircraft used by air cargo operators like ASC Cargo and SW Italia is doubtful, but the development of drone technology is already having an interesting implications for our industry.

Big business

One early sign of the growing importance of drone technology has been the recent deal between DHL and Chines consumer electronics exporter, Shenzhen Youkeshu Technologies. DHL’s Global Forwarding air and ocean freight specialist business has agreed to manage shipments of the Chinese company’s drones and unmanned vehicles to over 100 countries – and while DHL won’t be using drones to make their own deliveries just yet, the quantities of the products being transported are a sign of the rapid growth of this area of technology.

The shape of things to come?

Take another recent development – the release of pictures of a prototype unmanned vehicle that could soon be running up to 315 kilos of cargo between Los Angeles and Hawaii. It’s early days of course, but the start up business – called Natilus – is interesting, because the vehicle they’ve created would be able to integrate into the kind of infrastructure that already exists in the industry. The prototype would be able to dock at a traditional maritime port slip – and the team behind it plan to have it up and flying by 2020.

New rules

Finally, the recent legislative proposals by European Aviation Safety Agency (EASA) aim to address the safety issues around the operation of small drones, as well as privacy, security and data protection concerns.

A changing landscape

Ignazio comments: “The legislation shows just how significant this kind of technology is becoming. Whatever the ultimate implications are for the air cargo industry, it’s clear that drones and unmanned vehicles will almost certainly become an important part of the transport infrastructure – and as customers continue to demand delivery systems that are more rapid, more agile and more flexible, everyone in the industry needs to adapt to this changing landscape.”