Today’s market offers an abundance of opportunities for small and mid-sized forwarders to arm themselves with technology, according to Amit Agarwal, former air digitization expert at DHL and Panalpina/DSV.
“Every day there’s a new platform, a new tool out,” he said, adding that this offers smaller forwarders tools to compete with larger rivals that have sophisticated technology at their fingertips.
For all the pain and misery it has brought to people, industries and economies, the Covid-19 pandemic has accelerated the adoption of new technologies in the logistics arena. “Covid has been a catalyst for change,” said Eric LaValle, digital supply chain and customer experience technology portfolio leader at T-Mobile.
As the pandemic disrupted supply chains in multiple areas, visibility emerged as a vital instrument to identify problems and plot possible alternatives. With a broader array of tools available on that front, operators are looking beyond the challenges of coping with disruption toward heightened optimization of processes. Greg Orr, president of trucking firm CFI, says that the company’s drivers spend 15-18 hours a week on average waiting, which translates into more than 30,000 hours of idling for the firm. Visibility is key to reduce this unproductive time, he said.
Notwithstanding all the recent advances, real-time visibility is still very much in the future. Kendra Phillips, CTO supply chain solutions of Ryder Systems, pointed out that supply chains are still very much paper-based, which marks a formidable obstacle.
Digitization is essential for visibility, agreed Mario Cordero, executive director of the port of Long Beach. One of his major objectives is to establish a platform for the various users and stakeholders of the port to access and use to communicate.
One of the functions of such a platform will be the ability to book gate times for truckers, he said. Managing truck access to air cargo terminals has also been very much the initial drive of cargo community platforms that have sprung up at the international airports of Atlanta and Dallas/Fort Worth over the past year. Faced with landside congestion, some major airfreight gateways in Europe have found slot booking for truckers through such platforms a valuable tool to bring down wait times.
A number of airlines have been pushing aggressively to shift bookings for ad hoc shipments online. Now some of them are changing their approach to rates, shifting from static pricing set historically twice a year to dynamic regimes that respond to market conditions and fluctuations.
“Dynamic pricing is picking up,” observed Agarwal. “It takes away a lot of friction between an airline and a forwarder.”
However, not all airlines are ready for this, he noted. A lot of airlines have not made the step to link their pricing to capacity and booking platforms, he remarked.
“The biggest pain point is that there is no standard for e-booking. It varies from carrier to carrier,” he said.
For that matter, many airlines are still hamstrung by legacy systems. Angela Hudson, who has been leading the IT transformation of American Airlines Cargo, noted that maintaining these legacy systems is not only cumbersome but also costly.
American recently completed the cutover from a legacy system that encompassed a patchwork of some 90 different elements into a cloud-based system, the iCargo package from IBS Software. The migration took three years altogether.
“It wasn’t an easy implementation,” said Hudson, adding that for the airline’s staff it marked a massive change in work routines.
She described the completion of the cutover as the jumping off point to connect with customers in new ways and develop new services and functionalities. “It allows us to be more flexible, more nimble,” she said. “We can start saying ‘yes’ to things we had to say ‘no’ to.”
One area where American Cargo has barely scratched the surface so far is the use of AI, she said. Some projects are under way to enable greater predictability with flights and capacity and to make projections about no shows.
Air Canada Cargo, which has run some AI projects under a scheme supported by the Canadian government, found that scrutiny by AI of cancellations, no shows and discrepancies between booked and tendered volumes could help optimise load factors by as much as 6-8%.
Ocean terminals are also turning increasingly to AI. The port of Montreal embarked on a project this summer to use predictive analytics for the purpose of improving operation planning and reducing transit times for containers. It has been hailed as another milestone on the port’s quest to realize its ‘Smart Port’ vision.
While the disruptions experienced in the Covid-19 outbreak has unleashed a wave of feverish activity in the logistics arena to beef up visibility, connectivity and efficiencies, early adopters are still often left frustrated with the lack of progress at many players.
Orr lamented that a lot of information that TFI provides to clients is ignored. “It’s frustrating,” he said.
Still, the pandemic has convinced many operators of the need to upgrade their technological capabilities. At the same time, compliance keeps pushing up the bar and prompting new innovation. September saw the introduction of a cargo screening tool to detect misdeclared and undeclared dangerous goods in containerized shipments. According to the technology provider, Maersk was the first client to sign up.
Ian Putzger
