What’s Holding Back Customer-Centric Air Cargo?

  

By Etan Efrati, Freightos

As the cream of air cargo’s innovators held turns on the floor, this question came up time and again.

The recurring answer? The industry’s mindset is holding customer-centric air cargo back.

And, as if choreographed, speakers from startups, carriers, and forwarders brought up example after another of where the forces of change are finally breaking through.

That was my big take from Elevate, presented by Air Cargo World earlier this month.

Full disclosure: This article contains many great quotes from the conference’s speakers.

The Technology Is Already Here

Tech startups, as well as innovative corporates, are chiselling away at the industry’s many opportunities, including:

It was clear from the speakers that by and large, air freight technology and signs of innovation already here.

Let’s face it, the concept of harnessing technology to streamline operations and become more customer focused is hardly new. Other industries have reinvented themselves, or, like e-commerce, grown from nothing by doing just that.

The E-commerce Influence On Air Freight

Not just as an industry worth emulating, e-commerce came up time and again in other contexts.

Changing Customer Expectations

The new breed of consumer has been weaned on Amazon-level freight service expectations, spanning pricing, booking, and service To this add the even more demanding expectations of a new breed of entrepreneurs, and these are the shippers that the logistics providers must now learn how to cater to.

[There are now retailers out there who are] going from zero to a hundred million dollars without having to cut their teeth at Walmart or Amazon.
Charley Dehoney, Exec VP Strategy and Growth at Airspace Technologies

Creating New Business

I would attribute a lot of the demand that we’ve seen in the marketplace to e-commerce.
Matt Castle, VP Global Forwarding Products and Services, C.H. Robinson

Spearheading Tech Innovation

In ten years, 80% of air cargo will be unmanned and carry five times more cargo … because of increasing e-commerce.

Svilen Rangelov, Chief Executive Officer, Dronamics

New Entrant To The Industry

Clearly, Amazon Prime Air, and everything else that will eventually make up Amazon Logistics, will be direct competition, racing towards online logistics services. But, as one speaker noted, for Amazon it’s not about entering the logistics space in an impactful way, it’s about delivering on customer demands.

Spur For Changing Industry Mindset

And that thinking has been missing not only in air cargo but the whole of transport logistics. BoldIQ’s CEO Roei Ganzarski summed it up, “E-commerce is leading the way in changing our mindset.”

The Industry’s Mindset Is Changing

That last point is pertinent because speaker after speaker noted that it’s not technology, but the industry’s mindset that’s holding it back, something we’ve been screaming from the rafters for a while. Passenger travel’s timeline is a great indicator of this. Alaska Airlines launched online seat booking in December 1995 – over 20 years ago!

What the first online seat booking site (1995) looked like. Image courtesy of Alaska Airlines.

Here are some of the more blunt comments.

It’s no longer about bills of lading … We’re inhibited by the supply chain thinking of fifty years ago … The industry mindset is holding everything back.

Roei Ganzarski, President and Chief Executive Officer, BoldIQ

The biggest constraint is people’s mindsets.

Svilen Rangelov, Chief Executive Officer, Dronamics

How did airlines get so far behind? American Airlines introduced real-time electronic reservations in 1964.

Zvi Schreiber, our CEO here at Freightos

And indeed, there is evidence that the mindset is changing. Once perceived as enemies, the new tech companies are increasingly been seen as allies. Industry players are gaining trust, according to Chris Ferris of IBM, and that will be the key to their blockchain technology trial’s success.

Tech companies know the importance of trust.

We don’t look to disrupt the industry. Rather we want to empower it with great technology. Disruption in supply chain and freight forwarding creates uncertainty when dealing with companies inventories. Empowerment in an industry that still relies heavily on relationships creates less friction and a higher adoption rate.

Dan Acosta, Chief Executive Officer, Globatom

The conference was full of examples of pioneers who are now embracing technology and customer centricity. Here are just a few mentioned over the day:

  • Qantas opening access to operational data, technology platforms and anonymised customer insights to ten startups in its accelerator program.
  • Those forwarders embracing electronic freight sales, for instance via the Freightos Marketplace.
  • Admittedly an ocean cargo example, but after the experience of e-AWB, the air cargo industry should be watching the Port of Rotterdam trials of blockchain technology for sharing logistical and contract information.
  • Delta Cargo and Panalpina who have introduced digital cargo sales.

What’s holding customer-centric air cargo back? There are precedents in many other industries. The technology is there. Customers are definitely ready. The industry mindset may not have been there, but now the pioneers are changing that.

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