The consolidation of ground handlers and airlines is set to continue in Europe, according to Hermes’ chief cargo officer, Steve Montgomery (pictured above).
He believes the current European air cargo marketplace is as competitive as ever with “very tight margins” and pressure is increasing on the continent’s carriers from expanding Middle East airlines.
Montgomery notes there are challenges in Europe especially for cargo handlers, who are historically more conservative and the focus is simply on making “reasonable profits” so they can continue to invest.
He feels modernisation of processes and using more technology is vital to be competitive: “The need for modernisation is always there and the value for money should always be considered. Today, there is not even one company that can allow itself to operate without some level of modernisation as PC and HH for users, managing software, automation, and paperless work etc.
“A more modernised approach will be to adopt full automation, RFID, beacons and IOT, business intelligence, data mining and big data and other new innovations but the value for money is always there as a brake and a filter.”
Montgomery says in Hermes’ experiences cargo handlers can feel like they are being squeezed by expectations of airlines and freight forwarders, noting it is often only technological advances that can take an operation forward with regards to process improvements, and service delivery.
Hermes he says believes the acquisition of a quality, process-driven, best practice integrated CMS is the most important investment a cargo handler can make, but tight operating profits make purchasing new technology a challenge and a big decision.
Growing competition and massive investments made by competitors in the Middle East and Asia he notes is forcing European operators to invest. “We believe the first ones to invest will also be the ones to benefit the most from increased capabilities and profits,” Montgomery says.
The Hermes CMS he says improves efficiency; reduces errors and cost; has the capability to handle more within the same facility with the same staff; handle new airline products; offer additional services; and the capability to project the impact of new customer requirements.
Hermes is working on other technology including beacons to monitor temperature, location and movement of cargo in the warehouse, a generic work tool allowing customers to define and add their own specific internal processes and a new technology road map with mobility, archiving solution, and business intelligence.
Montgomery concludes air cargo firms “cannot afford” to neglect technology and must adopt the latest innovations to grow now and into the future.