The air cargo industry has a long way to go when it comes to data quality, availability of key data points, and management and usage of the already existing cargo-related data. CargoTech and its members reflect on the current usage and untapped potentials of the data gold mine and share their vision of where they see the industry in five years’ time.
Cédric Millet, President of CargoTech, explained: “Big data, data analytics, predictive analytics, real-time information, artificial intelligence, data transparency, data quality – the many buzzwords associated with data feature in every digitalisation panel discussion at every air cargo conference.”
Yet, the industry is complex and fragmented, and its individual players – airlines, forwarders, customs, handlers, airports, etc. are all at varying stages of the digital journey, which reflects on the quality and quantity of data available and how they use it.
“Our CargoTech mission is to proactively remove this complexity and offer data products and software powered by data to enhance transparency and accuracy, increase efficiency and profitability. Clean and actionable data is the common root to industry success.”
Tip of the iceberg
”While the industry recently made huge progress in digitalising key operational processes such as booking, distribution and tracking, it has only tapped into about 20-30 percent of its data usage potential,” Matt Petot, CEO of CargoAi, stated. The industry players that are just beginning the “digital transformation” journey are focusing first on operational efficiency, not so much on data as there is a lack of clarity or understanding on what the data can be used for. The more “digitally mature” companies that have been investing in technology for a while have started unlocking the potential of data to improve their commercial decision-making leading to increased revenues and profits.
Infinite potential
“Capacity forecast, overbooking strategy, pricing recommendation are made possible through leveraging large and complex data sets combined with predictive models. These are three very concrete examples of initiatives where using data increases the topline of an airline,“ Nathanael de Tarade, CEO of Wiremind Cargo, laid out. One of the biggest potential lies in predictive analytics.
Better data usage also contributes to the sustainability of the industry: accurate capacity forecasting, providing visibility of “unused” or empty legs for charter flights, overbooking recommendations powered by data are ways to maximise the capacity utilisation and ultimately ship less “air” and reduce unnecessary trips and fuel consumption. By reducing idle time and inefficiencies, data can finally help achieve more sustainable operations.
What are the blocking points?
Lack of standardisation, reluctance to share data due to competitive concerns, and fragmented systems across various stakeholders are the major barriers. Trust and collaboration need to be built within the ecosystem to unlock full data transparency.
Clarity on what the data will be used for, and full utilisation of available data are the industry’s biggest potentials. Organisations are often very focused on capturing more data but do not yet make the best use of the data they already have. Rotate’s CEO Ryan Keyrouse confirmed: “We often see data collection for the sake of it, without a full understanding of how it will lead to better commercial decisions.”
Nathanael De Tarade, CEO Wiremind Cargo pointed to problems in data quality: “Make sure the right data exists. We see many data quality issues and a lack of structure in managing all cargo-related data.” While this is certainly not the case for all cargo stakeholders, “it is more the rule than the exception”.
Standardisation and data pioneers
At the current pace of digital adoption it could take another five to seven years for the air cargo industry to fully utilise its data potential. The capabilities already exist, so it is simply a matter of adoption. Companies prioritising data management have a huge competitive advantage over those less digitally advanced. Communication and education on the advantages is needed to overcome the reluctance to implement a solution that has not yet been tried and tested by another company. “The industry needs forward-thinking, open-minded cargo data pioneers who embrace innovation. In our industry, someone has to show the way, try things and proves that something works for others to follow. This is the mindset that is correlated with digital transformation success” Cédric Millet, President of CargoTech, said. “They also need to understand how the use data can create tangible value, whether that’s through operational efficiency or increased revenues.”
More data, fewer people?
Automating repetitive tasks through data frees up human resources for higher-value activities, like decision-making and strategic planning. However, it requires a significant mindset shift and reskilling for employees to operate in a more “data-driven” environment. The key is not to reduce the workforce but to empower it by leveraging data to enhance human capabilities. Nobody likes to do repetitive tasks that could be automated. It’s about making these jobs more interesting, and our industry more attractive. In a context of labour shortage in air cargo, that certainly should be a priority for the industry.
Five years from now
CargoTech envisages that, in five years’ time, the industry will enjoy a seamless flow of standardised, high-quality and real-time data between all parties — airlines, airports, freight forwarders, and customs — and fragmentation will be a thing of the past. Operations will be more predictive, allowing for smoother planning, faster customs clearance, and greater sustainability. In Simon Watson’s (CEO of Aerios) ideal world, decisions will be driven by data instead of ‘gut feel’. Many repetitive tasks will become automated, increasing efficiency and reaction speed, and all stakeholders will share data through one commonly accepted standard, enabling further process optimisation.
With advanced AI and machine learning algorithms in place, we’ll see more efficient network planning, dynamic pricing models, and hopefully higher sustainability levels through smarter resource utilisation.
Crucial ingredient
“Data is the one main ingredient in all CargoTech solutions, and crucial for continued innovation. We therefore seek to educate and lobby for higher data quality, availability and governance. Once airlines and market players understand the benefits of sharing data, they will reap the rewards of cost efficiencies and revenue increase,” Cédric Millet, President of CargoTech, concluded. “And our members will be in a position to offer even better “data-powered” digital solutions to successfully drive the industry forward in the 21st century.”
