Tag Archives: technology

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

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.”