Tech takes off: Inside the digital adoption surge

The need to streamline operations in the airfreight industry was revealed by the COVID-19 pandemic, which sparked accelerated digitalization as stakeholders were forced to navigate congested ports, surging demand for airfreight capacity and labor shortages. The archaic method of booking capacity among stakeholders — freight forwarders and ground handlers included — has been quickly replaced by automated processes that help to optimize trucking operations at airports , ground handling operations, e-air waybills , digital booking capabilities and more. “Generally, technology has made things more accessible, it’s made things easier,” Simon Watson, director and co-founder of U.K.-based digital charter brokerage Chartersync, told Air Cargo World . “The traditional quoting using traditional methods is: You send an email, you wait for a response, or you make a call, and then you write up an email to your client. Obviously, that’s quite clumsy, [and] it always means that no single broker or person can reach out to the entire market and know with confidence that they have the best option.” Indeed, the number of cargo carriers signing onto platforms like WebCargo by Freightos or Germany-based cargo.one has skyrocketed since 2019 as more stakeholders see the visibility and accessibility that digitized processes provide, though digital booking has been around for some time . And as the rate of digital adoption surges, the once-fragmented industry is being transformed by the efficiency brought by technology. Digital bookings surge It’s no surprise that the rate of digital bookings has risen considerably of late, given the airfreight rate volatility and global disruptions that continue to plague the industry in the wake of the pandemic. The number of digital airfreight bookings on Freightos’ WebCargo platform in Q1 2022, for example, has increased 351% year over year , according to the booking company. Similarly, even before the pandemic began, the e-booking platform cargo.one reported triple-digit YoY growth, Simson Demmer, vice president of partnerships , told Air Cargo World . “We see this strong growth trend continuing, both accelerated by the pandemic and more structural shifts as digital capabilities grow and digital cargo booking becomes the norm, not the exception,” Demmer said. The number of carriers signing on with WebCargo has also increased considerably. The booking company had one carrier in 2018, Freightos Group Chief Executive Zvi Schreiber told Air Cargo World . But no fewer than eight airlines signed on in 2021, and 2022 is “just getting started,” with LATAM Cargo being the latest airline to launch its cargo capacity on the platform . Other recently-added carriers include American Airlines Cargo , Teleport , Caribbean Airlines Cargo and Air Canada Cargo . Meanwhile, at least 3,500 freight forwarders are now utilizing the WebCargo system, as roughly two to three are added to the platform daily, he added. “The carriers [that] have an [application programming interface] (API) or have a digital connection are getting more and more bookings … [and] that’s growing very fast,” Schreiber said. “It’s saving cost; it’s saving errors; it’s allowing them to change the price, even hour by hour.” Other carriers may decide to go a different route, however, to enable digital booking capabilities through APIs. For instance, carrier Lufthansa has partnered with software solutions company WiseTech Global to launch a direct e-booking API connection, offering digital booking options without involving a third-party platform. So, the rate of digital booking adoption continues to grow as carriers who have adopted such solutions reap the corresponding benefits, including greater visibility of product offerings and capacity, leading other carriers to follow, Schreiber said. Ground handlers eye automation efforts Although digital booking may be today’s hot topic, stakeholders, including ground handlers, continue to look at other ways to leverage technology to help fill the gaps caused by high labor turnover rates and the need for supply chain transparency. The labor crisis that has plagued the airfreight industry for many years was only exacerbated by the pandemic, which demonstrated how difficult it can be to retain labor. In fact, some companies have seen more than 100% turnover in one month, Yuval Baruch, CEO at U.K.-based cargo management tech company Hermes Logistics Technologies, told Air Cargo World . Hermes offers an ecosystem of automation solutions that work to optimize ground handling operations, whether for ground handlers, carriers or airports, Baruch said. In fact, the company has automated most of the ground handling at Frankfurt Airport (FRA) on behalf of around five customers. Hermes’ system also has automated a large warehouse in China that handles roughly 2 million tonnes annually, he added. Automating processes through technology ultimately helps save manpower, Baruch said. For example, automated stackers would save a lot of time because the build-up, breakdown and storage process would not have to be performed manually, requiring fewer employees. Baruch further noted that Hermes’ platform is also integrating with volumetric scanners and has implemented the process in Singapore in partnership with robotics technology provider SpeedCargo. Volumetric scanners automatically scan cargo moving through the warehouse or doorway , making the measuring process easier for handlers or other staff members. “You no longer need a few people or one person [to] go around measuring the box; [the box] just runs through volumetric, and the [measurements] are captured,” he said. Menzies Aviation, the ground handling subsidiary of Edinburgh-based aviation holding company John Menzies, has also invested in technology to improve operational efficiency and relieve pressure on employees. “Utilizing technology such as robots or setting up a centralized control center will relieve some pressure on our cargo employees, allowing them to focus on other priorities and higher value tasks,” Menzies Aviation Vice President of Cargo Technology Rory Fidler told Air Cargo World. Increased digitization also improves working conditions within cargo warehouses, he added. Currently, Menzies’ cargo facility at London Heathrow Airport (LHR) serves as an innovation space, where the handler can test and develop new technologies in collaboration with suppliers, Fidler said. In fact, the company earlier this year held its first Technology Showcase at LHR, where 14 tech companies, including Microsoft, and next-generation logistics startups presented various solutions to enhance operations. Menzies is looking to launch eight new solutions. “We are looking at a variety of new technologies, such as robotics, paper digitization and artificial intelligence for a centralized data control tower, cargo dimensioning and pallet utilization,” Fidler said. “In parallel with these new solutions, we are working on enterprise-level digitization to optimize our internal processes, increase speed and efficiency and reduce risk … Our investments in cloud infrastructure are one of the key enablers of this growth, providing a scalable computing capacity to collect, analyze and process data.” While additional investment is not only needed to help automate manual procedures , technology can also make training new talent more easy and efficient. Training is simpler and faster with technology, Hermes’ Baruch said. “It helps prevent errors, even with situations [where] you have a lot of [staff] turnaround,” he said. “So, if you have good tools that are easy to train on, easy to operate, it helps with these types of staffing issues.” At the end of the day, efficiency is key and made possible through automated features, including digital booking, Sebastien Podgorski, senior manager of cargo digital at Air Canada Cargo, said during a digital booking session at the Air Cargo Tech Summit . “Manpower planning is huge for ground handlers, and digital bookings … makes things more efficient,” Podgorski said. While the actual booking may not help ground handlers, “The information that is available from digital channels — that top-of-the-funnel information that we have — is really what helps.” Podgorski further noted that there can be additional applications as airlines continue to develop their own tools to ensure more cohesive and transparent drop-off times, or what doors are available at the terminal. “As more information gets shared across the supply chain, that’s where greater efficiency can really start to happen,” Podgorski said. “And where you can start pre-planning some of these things and avoiding these 10-hour drop-off or pickup delays, which can absolutely crush any efficiency that you’re trying to build into your business.” Challenges to digital adoption Major change doesn’t come without its challenges, however, especially in a fragmented industry. “You do see a big variance in terms of both process and willingness to adopt, and change management is different from region to region,” Hermes’ Baruch said. Even if management does want to move toward digital adoption – whatever that may be – there may still be resistance on the ground. When that happens, it becomes “very difficult to push through digitalization,” he added. Indeed, mindset remains to be one of the largest barriers impacting digital adoption, including among ground handlers, Menzies’ Shidler noted. “There is currently a sectorwide hesitancy to change and implement newer solutions,” Fidler said. “In order to see real development in air cargo technology, new solutions must be seen as a support to businesses and not be forced on users, which requires close partnership between airports, suppliers and handlers.” Collaboration and partnership across all stakeholders can become easier by integrating systems, Fidler added. “As data exchange can support visibility and transparency, and eventually lead to increased efficiency, the capability of sharing the right data seamlessly with airport authorities and airlines gains critical importance,” he said. Menzies utilizes fully mobile operational systems that enable employees to capture data on the go. Meanwhile, the handler’s cloud architecture provides access to the data both internally and to Menzies’ customers. Fidler further noted that the handler has kicked off various projects to enable “further data visibility, predictive analytics using artificial intelligence” to better serve airport authorities and airline customers that need near real-time data. Willingness to adopt technology can also look different regionally. “I think Europe is a bit ahead compared with the U.S.,” Baruch said. “We find processes or generally another level of automation in the U.S. not as advanced as Europe. I think, because of the cost of labor in some markets, people will not invest in technology. “So when you see markets where labor is inexpensive, that’s where you would see more resistance to invest. Expensive labor is typically a very good catalyst for digitalization because when people start costing you money, you’re looking at technology,” he added. The rate of adoption for digital booking capabilities also may vary from region to region, WebCargo’s Schreiber said. Digital booking initially started in Europe, and the first few partners were all European; more recently, the Americas have come onboard, but the one region with a “slight bit” of reluctance is Asia, he noted. “We have very few Asian carriers, but from discussions I understand that they are catching up,” Schreiber said. “They just didn’t have the IT readiness … and Asia is following quickly.” Asia remains a huge market as it transports some of the largest volumes. In fact, Hong Kong International Airport (HKG) and Shanghai Pudong International Airport (PVG) ranked No. 1 and No. 3, respectively, among the world’s airports for cargo tonnage in 2021, according to preliminary data from Airports Council International (ACI). In 2021, HKG exceeded 5 million tonnes in cargo throughput, up 12.5% from 2020, while PVG handled 3.98 million tonnes of cargo, up 8% YoY. “If you look at the biggest markets, like China and Hong Kong, there’s a lot of capacity there that is sold with big allocations to master loaders … there’s less of a spot market,” he said. “Maybe that’s also the reason it was not as urgent for them, whereas a lot of cargo coming out of Europe and the Americas is spot, and you need to digitize it.” Changing attitudes and efficiency But attitudes toward the new technology are slowly changing. “I’m really not seeing a lot of resistance anymore – very little,” Schreiber said of digital adoption. Indeed, as carriers and ground handlers continue to see positive results of the shift, the less hesitant stakeholders are to consider transitioning to automated processes. “Forwarders and airlines have seen great results from digital booking: reducing manual work, increasing visibility and reach, freeing up time to spend with customers while better meeting market demands on speed,” cargo.one’s Demmer said. In turn, “Any reservations about digital bookings have quickly fallen away. At the same time, airlines recognize the benefits of digital sales and data-driven buying journeys, because they confer a competitive advantage.” Despite these more open attitudes however, the tech transition remains challenging for companies or regions without a robust IT infrastructure for support. Technology stakeholders must therefore ensure their solutions not only help streamline processes but are simple to integrate with legacy systems. Several factors come into play with a technology shift, according to Baruch. One is exposure: Stakeholders must know what is available to trial so they can see the benefits for themselves. Another important factor is cost. “Make the entry-level [service] at least affordable, and make it gradual or value-oriented pricing,” he said. Freightos’ WebCargo’s approach to encourage the adoption of its booking platform was to make it easy and free, Schreiber said. “To adopt it, we made [WebCargo] free, we made the user interface super simple,” he said. “No training is needed … We have people who sign up and start booking within minutes.” Whether implementing an API connection, automated trucking solution or joining a third-party booking platform, the future of freight is inevitably digital. Moving away from analog forms of documentation and communication and opting for real-time solutions instead will streamline operations and help provide visibility for stakeholders across the industry. “Today, [the] question is no longer about whether to go digital, but how fast digitalization can progress with both forwarders and airlines pushing ahead on all fronts,” Demmer said.

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