Sharing of information is the biggest problem in the chain

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Digital transformation and adoption of new technologies within the air cargo industry is gaining traction and evolving.

However, there is still much work to do and the need for less resistance to change to technology, and more sharing of information to improve transparency become ever more important.

CHAMP Cargosystems chief executive officer, Arnaud Lambert (pictured below) believes although the industry has changed in the last five years in embracing more technology, more needs to done and it “doesn’t have a choice”.

“The market is still there and the numbers are there and it will continue to be interesting market for many people, but there are many people now and especially between competition in the traditional air cargo space, which is most of the focus today.

“The integrators are playing a big role in that market and the disruptions in my view comes from the new entrants that are shaking the whole thing like Amazon. We know Amazon from the IT side and when they go into something they are pretty sure on what they are going to do and they have the critical mass do this,” Lambert says.

He feels the advantage Amazon has is in air cargo is its “super customer experience” and is something the rest of the supply chain needs to learn from and improve.

“That is what is at this stage in this fragmented industry from shipper to consignee what is missing – as the shipper is craving traceability of their cargo and they will offer that,” Lambert says.

He adds: “We have a logistics chain that goes for five to seven days door-to-door in the world, but they have two to three days so in terms of business value proposition we need to combine speed, reliability of the service and customer experience and is something where we as an industry in this fragmented part need to wake up.

“It starts by full digitisation and it is about interoperability and about being part of the same value chain and the end customer needs to see the same value.”

There has been some resistance to adopt new technology and Lambert feels adoption is slow within air cargo, explaining: “It is slow and clearly it is not an industry with high margins and the distribution is not balanced, and we have clearly different actors, but I think the technology adoption is not something you cannot do alone, as if you can have high technology adoption in one part of the chain.

“If you don’t have the rest of the chain at the same level your investment will give you only a certain position, but it does not help. I can see more people sharing technology as that is the direction it is going.

“But technology is not the issue anymore. For many years this industry has not exactly been at the forefront of technology and we are a technology service provider.

“We know now that when we come with certain technologies we have more openness, but it is now about moving from openness to action.”

Lambert feels air cargo could take a leaf out of the book of other industries such as the automotive sector as he notes it is highly integrated on the logistics side despite the fact it also has a lot of different “actors”.

He says: “This industry is not doing it, and there is still something to correct, which is not obvious but we do not have a choice anymore in my view anymore because it is at a critical stage with Amazon starting hub to hub in the US and that is being extended and maybe internationally.”

But he believes technology alone will not solve the challenges air cargo faces and he feels the most important area is the quality of information exchange.

Lambert explains: “The quality of information exchange is the biggest part of the problem. We can see the amount of rejections because of structure as we process around 12 million air waybills on behalf of our customers and we proves the same amount in terms of messaging and then there is six million customs declarations.

“For us it is about ease of doing business for them and we are trying to ease their experience so they can focus on doing what they do, but we all need to play together.”

And he notes: “The end customer is the shipper and we all work for the same customer and need to all put our hands together – not one putting his hand around the information and releasing it at the last minute so others cannot plan on his/her side – and this starts with the shipper.”

Lambert points out: “On the e-freight side it is not about removing the paper – the key thing is about availability of information for everybody from the same logistics chain for that shipment who should have access to the information real-time from the beginning from the shippers side. Even if you are at the end of the chain it should be there.”