In the course of a tough year, air cargo digitalisation takes off
By: Thelma Etim
Tags: Transportation, Logistics, Digital Transformation, Technology, Air Cargo

SADLY, it has taken a global health pandemic to inspire air cargo industry digitalisation.

COVID-19 has inadvertently helped the airfreight industry reach a major turning point that airline association IATA has been championing for years: dragging a reluctant airfreight industry kicking and screaming into the digital age.

Shippers’ unequivocal demands for greater accessibility, transparency, efficiency and speed — especially noticeable qualities amidst the health crisis and with the general switch to e-commerce trading — has forced a remarkable air cargo industry volte-face move away from antiquated, legacy, manual, paper-based processes.

With their eye on enhanced profitably, some airfreight companies have now shrewdly turned to a group of dynamic digital disruptors to transform their transactions. Cargo.One is typically such an innovator which is currently propelling the acceleration of digitalisation amongst major players operating in global airfreight supply chains.

Moritz Claussen, one of three co-founders and one of two managing directors of Cargo.One, explains how the company’s digitalisation products have been assisting airline cargo departments through the pandemic crisis. “We have seen that the need and demand for digital distribution has grown substantially, especially with COVID-19 hitting the market,” he observes. “With rates and available freight capacities being more volatile than ever, Cargo.One is now the perfect partner to distribute air cargo capacities effectively to freight forwarders,” he states.

“We are digitally connected to the core cargo systems of all our partner airlines, allowing us to reflect real-time information on [our] platform and to facilitate bookings with instant confirmations.”

This way, the disruptor is also helping to free up much-needed resources in airlines’ thinly-stretched sales departments. “Digitalisation helps them focus [instead] on value-adding tasks — while at the same time digitally processing sales of general, express and cooled cargo for them, with no need for manual interference.”

The air cargo industry’s emergence into the digital sunlight has led to two distinct key advantages in these difficult times: firstly, cost-savings through efficiency gains in sales transactions and, secondly, incremental revenue opportunities — “by enabling airlines to sell to a vast and fast-growing increasing number of freight forwarders, at the right price,” Claussen insists.

He cites a comment from Jonathan Celetaria, the European sales director at strategic partner AirBridgeCargo (ABC) Airlines. “Over the past year, we have been able to access new market segments through Cargo.One, all the while improving the quality of our customer experience,” is Celetaria’s endorsement.

If more proof were needed of the digital footprint that Cargo.One’s e-bookings platform has made in such a small space of time, Condor, TUI and Sunclass ­– all of which have sales departments outsourced to the ECS group — are the latest airlines to have entered into partnerships with the Berlin-based, data-driven digital distribution channel, in which Lufthansa Cargo is a shareholder.

“With the prospect of digitalisation, we are currently in the process of integrating more carriers to the platform.”

They have joined TAP Air Portugal, Japan’s largest airline All Nippon Airways (ANA), Etihad Cargo, Japanese freighter airline Nippon Cargo Airlines, EL AL Israel Airlines’ freight division, Russia’s AirbridgeCargo (ABC) Airlines and its UK affiliate CargoLogicAir (CLA), Finnair Cargo and Brussels Airlines.

After only three years of doing business, Cargo.One’s total number of carriers already stands at 15, whilst the number of forwarders its platform is able to reach, including the global players Agility, Hellmann Worldwide Logistics and Dachser, has risen to 2,000. This figure includes many small- and medium-sized companies that were previously difficult or impossible to serve because of their embedded, costly manual processes.

Claussen further outlines: “We are currently in the process of integrating more carriers to the platform, with a number of large players from other continents lined up to join. While we are still only serving a relatively small percentage of all global airlines on the platform, we are growing rapidly. Combining large global carriers such as Lufthansa Cargo, ANA Cargo or AirBridgeCargo, for example, with smaller local players such as Finnair Cargo or TAP Air Cargo on the platform, we have been very successful in creating a great network coverage.”

At the click of a button, the system allows freight forwarders to instantly find capacity and real-time prices to almost any destination airport in the world — a particularly valuable development particularly in volatile times. “This capability has led to a substantial increase in the number of freight forwarders that have registered to book on Cargo.One over the past nine months. Year-over-year (2019–2020) our user base has tripled,” he underscores.

“The beauty of what we have been able to build is that we can integrate with literally any legacy system.”

It doesn’t end there. Overall, Claussen sees a high sense of urgency and awareness amongst other airlines all around the globe to digitise their business and thereby save costs and reach more customers. At the end of July, the enterprise announced it had raised US$18.6million capital investment to expand into North America and Asia markets, which will facilitate its ambition to build a global e-transactions system for the entire airfreight industry.

Claussen explains how the cash injection has already assisted the business in the rapid expansion of its services. “We are constantly working on bringing new functionalities and features to both our airline partners and those freight forwarders using our platform. To support this mission, we have grown our team significantly over the last few months which is helping us to keep up with integrating new airlines and entering new markets while at the same time delivering new product features,” he reveals.

Amongst those new features are options that allow teams to easily collaborate remotely, or improve the monitoring of new special events such as passive temperature-controlled shipments, for example. Furthermore, the company has invested in an array of data manipulation products “to support our partners in making data-driven decisions and better monitoring of their own performance,” Claussen emphasises. “Lastly, we are eyeing expansion into new [geographical] market [areas] to support our airline partners with a more global offering.”

Not surprisingly, the digital disruptor has been growing “at crazy rates” over the last year. “Bookings have increased by more than 600 per cent on the platform year-on-year, whilst we are now serving almost 2,000 freight forwarding branch offices on Cargo.One,” Claussen reveals.

“The beauty of what we have been able to build is that we can integrate with literally any legacy system,” he points out.“In fact, we have formed strategic partnerships with a number of digitalisation technology partners in the industry, for example IBS Software, to create plug-and-play solutions.” The company has successfully integrated with carriers that run on versions of Accelya’s SkyChain, Champ’s Cargospot, IBS Software’s iCargo, Champ Cargosystems’ eChamp and many other self-developed systems. “And, while we prefer working with application programming interfaces (APIs) and web services, we know how to make much simpler technology work,” he underlines.

Looking ahead, Claussen notes: “Over the next months and the whole year of 2021, the air cargo industry will play a crucial role in distributing COVID-19 vaccines around the world and [already] we see many airlines working hard to be able to provide the right infrastructure to master this major global challenge, for example, by preparing their cool hubs.”

Not surprisingly, he predicts that digitalisation will have accelerated further within the airfreight industry within the next two or three years, as most airlines will have established or will be in the process of establishing an infrastructure that allows them to distribute their offering much more effectively via digital booking channels.

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This story first appeared in aircargoeye.com on 11 December 2020