2020 Future of Freight Series General Logistics Technology LogTech

The Future of Air Cargo Digitization through the Lens of Air France/KLM VP

 

Would you be shocked if you learned that the vast majority of a major airline’s cargo revenues come from digital channels?

We were too. Sit back. That’s not the only data point that shows just how forward thinking some cargo airlines are. 

So far in the Future of Freight series, we’ve had the chance to hear from tech reporters, forwarders, carriers, enterprise BCOs and even Alibaba. Last week, we finally got a chance to hear from someone playing an important role in the future of air cargo –  Robert Kunen, VP Distribution & Customer Support at Air France/KLM/Martinair Cargo

As with many in the airline industry, Robert’s world was turned upside down this year, and he credits digital solutions with Air France/KLM’s ability to stay agile through the pandemic. But that wouldn’t have been possible with seeing the humans on both ends. 

Air cargo digitization accelerated by demand and COVID-19

Air cargo may have a bad rap with digitization. After all, eAWBs have been available for well over a decade, but the adoption rate is still only at about 68%.

But Robert explained the barrier to eAWBs is less the industry’s resistance to change and more the nature of the tech: eAWBs specifically need to go through so many channels within the logistics chain – airport authorities, customs, the various airlines and shippers involved – that everyone needs to have the same digital capabilities, otherwise it simply won’t work. 

In other words – until there is the possibility of mass adoption, the value of going all in is far, far lower.

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Are eBookings any different?

With Digital Air Cargo eBookings, on the other hand, airlines can invest in their own system  and then invite forwarders to use it without any new tech requirements of their own.

Other than a web browser, that is. This allows airlines full ownership of their innovation agendas, and removes all tech barriers to forwarders actually using it. And this is exactly what Air France/KLM has done with its MyCargo eBooking platform, which now accounts for nearly half of their air cargo bookings.

“In 2018, when I took up this position, digital cargo eBookings were at around 8% at the beginning of the year. Right now we are already at 43% for July.”

The pressure to digitize has never been stronger than in during the pandemic. Almost instantly, airlines across the world were brought to a standstill, and needed to find ways to adapt quickly to this new reality.

Air France/KLM realized they needed to react and quickly created new solutions for the website including an updates page where customers eager for information could see daily network updates. Soon they had thousands of hits per day, and realized just how open customers could be to change.

|”The speed of adoption of our customers is higher than we think.”|

But real innovation is much more than creating a simple website. 

Early on during the outbreak, air cargo capacity was tight and demand for charters was peaking. So Robert’s team quickly created a solution for customers to internally bid on charter flights, which soon outperformed their existing sales channels.

“We had some kind of auction experiment called KickCharter that in two weeks time we developed and put on our website. Looking back now we flew more charters sold through KickCharter then that we have sold through our telephone.”

Even now, when many companies are only focused on doing what they can to keep afloat, Robert continues to work on the development of digital distribution tools. He believes that customer adoption to digital has accelerated, and the digital transformation within the industry is just beginning.

Designing for the customer

The demand for digital air cargo comes straight from the customer – the forwarder. Which is why actually getting customers to use new platforms, has two critical aspects:

First, is the importance of user experience (UX). Any new design should be approached from the perspective of the user. This is pretty much the de facto for any digital experience.

The second part is ensuring that digital platforms don’t compete with other distribution channels. For instance, a rate on a website should be the same rate a customer gets by phone. 

But much more than that, each channel – digital or otherwise – serves a particular purpose. As VP of both distribution and customer support, Robert believes that going digital works best when paired with a human approach, and that means getting in the mind of his customer. 

There are certain things that make digital platforms great for customers – speed, transparency, 24/7 availability; and perhaps more importantly, that’s where many customers already are.

“Our distribution strategy was always based on the principle that you want to be where the customer is.”

However, when it comes to customer service, especially when dealing with complex solutions or building business relationships, Robert thinks old and new school is the way to go. 

He wants the platforms to be clear enough that customers immediately know where they should go for the service or solution they’re after. Which is why he considers Air France/KLM’s approach a multichannel one rather than an omnichannel one -each channel serves a particular purpose best.

While Robert knows the importance of digitization within air cargo, and is actively working towards it, he made it clear throughout the conversation that the human touch can’t be replaced, at least not for decades to come.

“We believe that the best model is a combination of the human and the digital.”

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