Tag Archives: Air Freight

Cargo News, Ignazio Coraci

What can the industry learn from KLM’s new air cargo e-commerce strategy?

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The pace at which we all respond to the demands of our customers is critical – and recent investments made by some of the world’s leading air cargo operators suggest that the industry is finally getting the message about e-commerce.

Prime position

The sector is booming within the air cargo industry and KLM Cargo have now invested in a combination-carrier-operated sorting system at its Amsterdam Schiphol airport site that is able to handle package-level air freight. It’s been designed specifically to handle post, express and pharmaceutical cargo.

That means that KLM Cargo should now have the systems in place to fully take advantage of the growth in e-commerce traffic. Marcel de Nooijer, executive vice president of KLM Cargo explains: “E-commerce is a fast-growing branch in the cargo industry. This innovative system allows us to keep pace with the rapid increase in post and express consignments. The system is faster and smarter, allowing us to offer better service to our customers.”

Same-day revolution

KLM Cargo have described the new facility as a world first, and it’s clear that it should now allow the business to make more use of its air freight capacity. KLM Cargo have teamed up with Netherlands-based Parcel International to run 12Send, a new same-day delivery service for Europe. They’ve already piloted the service on routes between Amsterdam and Barcelona, and have held successful trials in London, Madrid and Stockholm.

A lesson for the sector

Ignazio Coraci comments: “This is a sign of things to come. No industry can afford to ignore their customers. The investment made at Amsterdam Schiphol is an indication that businesses are slowly beginning to listen to changing customer needs, and I feel that we are starting to move in the right direction. This kind of investment is essential if carriers want to survive as new markets develop.”

Cargo News, Ignazio Coraci

Is blockchain technology the answer for air freight?

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We’ve talked in this blog before about the need for the air cargo industry to begin to move away from the paper-based systems that so often clog up many of our processes. As our customers become accustomed to services that deliver more responsive, flexible solutions and with the higher service expectations that have grown out of the increasing use of mobile technology, we need to respond quickly.

First steps

The International Air Transport Association (IATA) have already made a number of steps towards doing this, not least through their support of the e-freight digital process transformation programme.

“Our customers are telling us that they expect more,” said Alexandre de Juniac, IATA’s Director General and CEO. “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.

“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.”

Is blockchain the answer?

Blockchain is often talked about as being just the kind of innovative technology that supports these aims. But what is it, and how can it be assimilated successfully into the processes and systems of a 21st century air cargo industry?

Well, simply put blockchain technology uses a shared digital ledger to record transactions across a number of computers. The advantages for users are that everyone can see any changes made to public blockchains, creating a more transparent process. Every single transaction made on a blockchain is also immutable – so it cannot be altered or deleted by anyone. A blockchain also creates a single ledger, seen by everyone, that any new transactions are added to – cutting down on any complications and removing the need for lots of different ledgers.

Air freight applications

So what would this potentially look like in an air freight operation? Using blockchain technology within this context creates a cloud-based system that is essentially more secure way of recording shipments. And because of the way that blockchain technology works, it’s also secure from hacking – as well as being a permanent record of transitions that is shareable between multiple users.

While blockchain has yet to really be tested thoroughly within an air cargo setting, it’s already made an impact with marine shippers. Here’s what Jody Cleworth, CEO of British freight forwarder Marine Transport International Limited (MTI) has to say: “Blockchain has the ability to empower our industry into a true digital age,” he said. “The sheer volume of containers processed per year means that safely decentralizing the management of these containers will radically reduce the complexities of shipping.”

Time to invest

Ignazio Coraci comments: “Blockchain technology is precisely the sort of innovative solution to age-old problems that we should be applying within our own industry. It’s important that other sectors aren’t allowed to steal a march on the air freight industry by adopting innovations that will serve customers in a way that we can’t offer yet – the time to act is now.”

Cargo News, Ignazio Coraci

Business continuity

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Cyber attacks by hackers are becoming a huge problem in our increasingly connected and technology-driven world.

A growing threat

Recent examples include the global ransomware attack back in May that disrupted many critical systems – not least in the UK’s National Health Service, which was badly affected for a number of weeks, severely impacting patient care. Closer to home in – terms of the air freight industry at least – was the attack on marine container shippers AP Moller Maersk, that saw a large number of their critical IT systems hit by the so-called ‘Petya’ operation.

One of the key phrases that is usually heard in the aftermath of such attacks is the need for a more robust procedure around ‘business continuity.’ But what does this really mean, and what steps has the industry already taken to lessen the impact of similar attacks – or even global IT system failures such as the one that recently hit British Airways – in the future?

Plan B

A new system that has been implemented in the UK might give some clues as to the future shape of our industry’s response to this issue. The ‘CCS-UK Fallback’ system is intended to allow the UK air cargo industry to continue running in the event of any prolonged problems with the HMRC’s vital CHIEF (Customs Handling of Import and Export Freight) system. The new system means that traders will be able to continue processing Customs export declarations even with CHIEF down, and it has been designed to run for 30 days. The system’s development is a great example of collaboration between the private sector and government to safeguard an industry that’s worth billions.

“We have recently seen the horrendous impact of major IT system failures in aviation, and this cannot be allowed to happen to the UK air cargo industry which provides essential support to UK trade and industry, helps maintain our competitiveness on the world stage and supplies urgent commodities that are sometimes a matter of life and death,” says Steve Parker, DHL’s Head of Customs for Europe and Chairman of the CCS-UK User Group.

Safeguarding our customers

Ignazio Coraci comments: “The CCS-UK Fallback system is a real step forward, and I think it could be used as a model right across the sector. The service that we provide as an industry must have effective protection and we should all have business continuity plans in place – it’s the least we owe to the millions of customers who rely on us.”

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

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

Malpensa Airport to See Strong Growth in 2017

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New reports indicate that Milan’s Malpensa airport saw strong air cargo growth in early 2017, and this momentum is only set to pick up further throughout the rest of the year. Ignazio Coraci comments.

Base of operations

Malpensa is the most strategically placed airport in Southern Europe. It is located in Lombardy, which is the richest region in Italy and a key driver of its economy, providing a multitude of opportunities for air cargo firms. Malpensa is also the only Southern-European hub to be ranked among the top 10 European cargo airports, making it very attractive for carriers who wish to serve this profitable market.

Malpensa airport also serves as our base of operations here at SW Italia. From Malpensa, we provide all-cargo services around the world, flying to far-flung destinations such as Azerbaijan, China and the US. We have quickly established ourselves as one of Italy’s leading all-cargo services, partly due to this advantageous location, and we are now expanding our fleet, to grow our company further.

Malpensa growth

There is a lot of potential to be found at Malpensa airport. Figures quoted by Air Cargo Week, an industry publication, suggest that for the past three years, the amount of air freight which passed through Malpensa grew at an average of 8%. But Malpensa’s air freight volumes expanded by a staggering 13% in the opening two months of 2017, showing that business is booming at the airport.

Meanwhile, this data suggests that in 2016, Malpensa’s air freight volumes rose by 7.4%. The airport’s air cargo volumes kept rising in early 2017 due to a stable economy, robust imports and exports and recovering road feeder service volumes. Experts believe that these same factors will ensure that Malpensa’s air freight volumes keep growing during the rest of the year, benefitting air cargo firms.

Contributing factors

There are various factors, which have attributed to the recent growth of Malpensa’s air freight numbers. The airport has long-been as a hub for the transport of goods such as pharmaceuticals, clothes, machinery, sports cars and perishables e.g. wine. Some of these, most notably pharmaceuticals, are seeing rapid growth, and coupled with the rising number of both small and heavy packages that are being transported from the hub, this is helping grow Malpensa’s air cargo volumes.

ignazio coraci looks at growth at Malpensa AirportWe should also not that Asia and the US – which is set to see robust air cargo growth long-term, account for over 70% of exports from Milan. Due to the recovery of import flows and increasing capacity of both direct and indirect services, the US market was a practically prominent driver of Malpensa’s growth in 2016. Meanwhile, Malpensa-based carriers are increasingly targeting new markets, such as South America, and this could boost the airport’s fortunes further going forward.

It is particularly interesting to note that Italy is only set to experience modest economic growth over the next few years, as it is not viewed by foreign companies as an easy place to do business. However in spite of this, Malpensa airport is expected to post further air cargo increases, in part because e-rising commerce is creating a climbing, constant stream of traffic for couriers based at the airport.

New opportunities

Commenting on these figures, Ignazio said: “Our location has allowed us to turn SW Italia into one of Italy’s leading all-cargo services. As Malpensa airport fulfils its potential and sees its air cargo volumes expand further in 2017, there will be new opportunities for us to capitalise on, allowing SW Italia to grow its operations and launch services to new markets, so we can thrive going forward.”

Cargo News, Ignazio Coraci

Air Freight Grows Significantly in Miami

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Ignazio Coraci comments on recently-released figures, which indicate that during the past year, air cargo traffic volumes grew significantly in the US port city of Miami.

Amazing opportunities

There is amazing potential to be found in the US air cargo sector. A study published by the US’ Federal Aviation Administration (FAA) projected that in terms of RTMS, total American air freight traffic for domestic and global routes will climb by 1.4% during 2017. Meanwhile, the FAA forecast that total US air freight RTMs will grow on average by 3.1% per annum between 2017 and 2037.

It appears as though a fair share of this potential lies in Miami – a city located on the sea-coast of Florida, one of the US’ most populous states. Miami is a centre of business, finance, commerce and pharmaceuticals, while its location makes the city one of the primary entry points into the lucrative US market. These factors are making Miami an increasingly attractive destination for air cargo firms.

Booming air cargo

According to Freight Week, an industry publication, the city’s rising status as an air cargo hub, is leading to a rise in air cargo rates for its Miami International Airport (MIA). The US’ Department of Commerce recently revealed that the value of air cargo which passed through the hub increased by 8% during the previous year, to reach US$5.3 billion, showing that Miami’s fortunes are rising.

ignazio coraci looks at growth at miami airportIt is important to note that for a decade, Florida has ranked as the US’ fourth largest state in terms of gross domestic product (GDP).  It held this position in 2005, when the state’s GDP was US$700.3 billion and it retained this ranking in 2015, with a state GDP of US$888.1 billion. This has benefitted Miami’s air cargo industry, which accounted for a colossal 92% of Florida’s total air trade value in 2016.

Stronger prospects

Commenting on this news Carlos Gimenez, the Mayor of Miami-Dade County, where the city is located, said: “MIA’s continued growth means a stronger economy and more job creation for our community… That’s something each of our [county’s] 2.7 million residents can be proud of.” Data also shows that the lion’s share of MIA’s air cargo growth can be attributed to pharmaceuticals.

Between 2011 and 2016, MIA’s air cargo rates for pharmaceuticals jumped by 140%, with a rise of 48% registered in the past year alone, to reach US$4.4 billion by the close of last year. Expanding, Miami-Dade Aviation Director Emilio González argued: “Our efforts to maximize pharma freight traffic at MIA continue to pay dividends for Miami-Dade County, the state and the nation… The World Health Organization projects that the global pharma industry will rise in value from US$300 billion to US$400 billion within the next three years, and we want to position MIA at the centre of that growth trend.”

Tapping US markets

Speaking out on this news, Ignazio noted: “We can see, from the release of these figures, that along with other East-Coast locations such as New York, Miami is set to be a prosperous market for air cargo firms going forward. At SW Italia we are looking to tap into the lucrative US market, by developing a Milan to Chicago service and we may expand to East-Coast locations as time passes, so we can harness the potential to be found in the US, and build a booming international all-cargo operation in future.”

Cargo News, Ignazio Coraci

Freight Rises Across Europe’s Airports in February 2017

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New figures show that the volume of freight passing through Europe’s airports increased in February, suggesting that the continent’s air cargo market is stronger than ever. Ignazio Coraci comments.

Rich markets

Europe is one of the richest regions on earth, with some of the biggest economies in the world including the UK, France and Germany. The continent’s wealth and hungry consumer markets, coupled with the rise of e-commerce, have made Europe an increasingly lucrative place for air cargo firms.

We are seeing Europe’s airports thrive within this environment, as air cargo firms transport goods through these pivotal gateways in ever-increasing numbers. Just look at Heathrow airport, the primary gateway for the UK’s booming capital London, as an example. Last year, the expansion rate of cargo which passed through Heathrow outpaced its passenger growth, showing that business is booming.

High growth

According to Air Cargo Week, an industry portal, Europe’s airports kept recording growth early into 2017, as their freight traffic ticked up by 3.4% of February this year. The best performer for February was Frankfurt airport, as the gateway saw its air cargo volumes expand by 2.2%, hitting 153,870 tonnes, in February, while in the first two months of the year, its air freight growth came in a 4.2%.

These figures were released by sector body the Airports Council International (ACI) Europe, who also noted that Heathrow performed well during the first two months of the year, recording respectable air freight growth of 4.2%, meaning that 251,212 tonnes passed through Heathrow in this period. Also Heathrow themselves have announced that their freight volumes grew by 4% in February 2017, contrasting slightly with ACI Europe’s figure for the airport’s February expansion, which was 4.4%.

What was interesting was that ACI Europe recorded stronger progress in non-EU, than EU airports. According to the body, non-EU airports experienced 4.7% air cargo growth during February, while EU airports racked up 2.7% in air freight expansion. Meanwhile, the air cargo growth rate for all of Europe was 5.4% in the opening two months of this year, with the expansion rate coming in at 9.1% and 4.8% for non-EU and EU airports.

Major progress  

Commenting on the release of ACI Europe’s latest figures, Ignazio Coraci said: “It is apparent that 2017 got off to a great start for the airports of Europe, with their air cargo volumes expanding, in year-on-year terms, fairly significantly. It is clear that as the dust settles from an eventful 2016, and consumers buy goods in ever-greater numbers online, the European air cargo sector has benefitted, suggesting the coming year could be a positive one for one of the world’s most lucrative air cargo sectors.”