As organizations across all industries ramp up their digitization efforts and invest in technology that helps them work more efficiently, the air cargo sector is well-positioned to take advantage of this trend. From reducing delays to eliminating errors to automating repetitive processes, supply chain digitization helps air cargo carriers be more productive in an increasingly demanding business environment.
According to Blume Global, air freight plays a critical role in the healthy supply chain ecosystem. And while it stands as one of the more expensive ways to ship goods, air freight’s speediness gives it a major advantage in a world where more customers expect same-day and next-day deliveries.
“Air cargo carriers can greatly benefit from digitizing their supply chain, and gaining greater visibility for both themselves and their customers,” the company points out. “This also helps to build agility into the supply chain mix, providing more options for supply chain managers.”
6 Reasons to Digitize
Here are six more reasons why air cargo carriers are (or, should be) investing in technology, applications, and processes that support supply chain digitization:
- Air cargo management is a fragmented process with a lot of different moving parts. According to Freightwaves, the typical freight consignment booked by a forwarder and shipped in the belly of a passenger airplane takes five to six days to reach its consignee, though it takes less than a day to fly it to the destination market. “The remaining time is often spent sitting in customs waiting for processing and clearance, or hung up in the web that also includes ground handlers, customs brokers, truckers, and importers,” it explains. “The time that a shipment languishes on the ground nullifies the benefits of air shipping for which a shipper often pays a dear premium.”
- Next-day shipments have become the norm. One of the main factors pushing for greater use of air freight is Amazon Prime’s next-day shipping promise. “The popularity of Amazon’s membership program, and the convenience of receiving goods within 24 hours is forcing the rest of the industry to play catchup,” Blume Global points out. “If air cargo carriers want to remain competitive, digitization is essential.”
- Carriers need more data-sharing and visibility. From customers and contracts to aircraft and assets, air cargo carriers have to be able to access and share information that keeps everyone in the loop. “A centralized platform can bring together air cargo data across multiple sources and protocols, providing one view of the truth for insights and reporting,” Blume Global states. “This makes it much easier to resolve issues, identify demands, and remain flexible.”
- The air freight business comes with high costs. High fixed costs for assets and aircraft converge with variable expenses like fuel to create a significant expense base for carriers. Because of this, maximizing efficiency is an imperative. “Gathering data from multiple sources allows for deep analysis that can identify opportunities for cost reduction, problem-solving, agility, and service improvement,” Blume Global adds.
- The industry is ripe for innovation. A key enabler of cross-border trade, air freight supports both express deliveries and the long-distance and efficient transportation of sensitive and critical goods. To optimize these freight movements, air cargo carriers need the same advanced technologies that their ground, rail, and ocean colleagues are investing in. “Digitization is seen as a key lever for the development of new innovative services and solutions,” Sia Partners points out, “which will drive efficiency in the air cargo ecosystem and deliver incremental value to the end customers.”
- Millennials and Gen Y are demanding it. Younger consumers demand less paper and are accustomed to automation not only in their airfreight transactions but throughout their lives. “Forwarders and their airline partners who ignore this trend do so at their peril as automation will be essential to compete in the future,” Freightwaves
According IATA, each international air shipment requires more than 30 different paper documents to process and submit. As they fold more digitization into their supply chains, carriers can effectively chip away at this number, streamline their processes, and create a more efficient end-to-end supply chain where everyone wins.