The rise of e-commerce is rapidly changing the logistics industry, but is continuing to provide challenges that must be overcome, reports James Muir from Miami.
In the first session of the Air & Sea Cargo Americas conference on 1 November titled ‘Trade trends in the Americas’, SeaLand chief executive officer (CEO), Craig Mygatt; Estafeta international business manager, Diana Najera; UPS president for the Americas region,
Romaine Seguin; and Atlas Air executive vice president & chief commercial officer, Michael Steen, who is also Titan Aviation president & CEO; explained to delegates how logistics has changed in recent years and what may happen in the near future.
E-commerce was a major talking point, especially as consumers want products and expect them to turn up immediately.
Seguin explained: “E-commerce has radically changed logistics, it has created last mile challenges. Customers expect free shipping but nothing is free in shipping, there is a cost there somewhere.”
Session moderator Richard Roffman, who is the publisher of Cuba Trade Magazine, agreed, saying a few years ago consumers expected to wait a few days for delivery but now expect to be able to order products on their phones and to receive constant updates such as who packed it and other information.
Steen commented that improvements in the global economy bring both good and bad news, saying: “The global economy is doing great and this is fuelling purchasing, but this brings challenges for the supply chain.
“Technology is there to support industry but regulations are going to be the biggest challenge. Cross border is one of the biggest challenges we face.”
Seguin pointed out that Latin American customs processes are not advanced or automated and UPS is working with government officials to show them what it should look like, with consistent tax and duties.
She says: “It is all manual south of Miami, there are delays whether it is for cargo or express. We spend a lot of time explaining what technology can do. When we explain to finance ministers that they will get consistent revenue they use it.”
Embracing new technology is essential to being successful in the future, and Seguin believes whichever company can provide last mile services that satisfy the customer will be the winner.
She says: “We have enhanced our business, pharma is very strategic for us. My advice is work out how to integrate into changes.”
Steen says the main change Atlas Air has experienced over the past 10 years is the type of customer it provides aircraft for.
In the past it primarily dealt with scheduled airlines but now 70 per cent of the market is for express and e-commerce.
He says: “A lot of companies have different specialities, adding value to consumers. Looking ahead there are tremendous opportunities ahead.”
Najera says while air cargo operators plan their fleet up to seven years in advance, in e-commerce this is every year, and Estafeta is consistently adding new trucks.
She explained: “In terms of e-commerce you have to have a lot of contact with customers, you must understand how they behave. We are doing a lot in online marketing, a lot of research into what customers wants for planning how to serve them in the future.”
Moderator Roffman described the need to change by saying: “If you don’t adapt then you’re a dinosaur and you will become extinct.”