Kuehne + Nagel’s global head of air logistics operations, Thomas Puglisi, believes more-available and more-accurate information and a culture of proactive communication can help the sector predict potential bottlenecks and solve problems before they amass
What have you been doing to improve air freight operational efficiency and communications, and what will you do this year?
There has been a realisation within the air cargo industry for some time that things could be done better, more efficiently, and with greater accuracy. This was amplified during the pandemic. It is why we began our eTouch initiative several years ago and why we believe even more that the digitalisation of the touchpoints in the air cargo supply chain is the only way to achieve an efficient model. Less ‘manual work’ allows our experts and those of our partners to focus on servicing the business, talking to our customers, and ensuring we have time to be proactive and creative in our work.
eTouch focuses on addressing the key touchpoints and handovers between all parties in a digital manner. These touchpoints range from digital booking channels for our customers to digital document production, to real-time pickup and proof-of-delivery data management, and the ability to access air carrier capacity on a host-to-host basis. The less manual work needed to manage information, the fewer resources needed to chase and correct information, then collectively, the more efficient we become.
How can you and other stakeholders in the air freight supply chain work more effectively this year to improve visibility and streamline cargo operational processes – for example, to minimise the congestion, delays and volatility experienced last year at certain cargo handling stations and airports?
There is not one magical elixir that can solve the problems of congestion, delays and uncertainty. But what we can prescribe is a regimen comprised of several steps to help us get better.
A core part of the ‘get well’ regimen is addressing information accuracy and timeliness. We struggle in this context as an industry – for some time, and more-so of late, for various reasons. When information is inaccurate, late, or missing, we are then caught off guard and unprepared. When we are unprepared, problems begin to build.
It is still difficult to comprehend, with the technology and communication tools available to us today, why we still must manually chase information, cargo disposition, cargo location, completeness, and so on; why information is still managed in different formats, with different definitions of completeness or timeliness, and with a different understanding of the actual content. There have been valiant efforts to reconcile some of these problems via IATA initiatives, CiQ and so on. However, without discipline, with rules of engagement that are still too interpretative, we are not progressing. We must fix this pattern and find a common path forward.
But this alone is not the single cure. Much work needs to be done to collectively understand what it means to be proactive. This is a cultural aspect as much as a technical one. We are too reactive in how we communicate. We wait too long to indicate, alert, raise a flag about problems or deviations to what was expected, and we are even worse at advising what is being done to reconcile the problem in a timely manner.
It is important that we take a few simple steps to avoid what we experienced in the past year plus. Better, available, and more accurate information. A culture of proactivity in how we communicate, how we predict potential bottlenecks, and how we solve problems before the problems amass to a point where they are unsolvable.
But despite the challenges that our teams and our partners faced, we executed in an environment that was constantly changing, constantly evolving and constantly frustrating.
How can we better incentivise stakeholders in the air freight supply chain to support these aims?
If the past two years have taught us anything, it is the importance of what we do to the well-being of people. Without our ability to do what we do, society as a whole would have been in a much different, and likely not as steady, place as we are today. Our aim should be to continue to prove our importance and our place in that model. It is not a given. Our role to support that well-being is one that is earned.
The incentive then becomes clear, because it is the same for all participants – air carrier, logistics intermediary, haulier, handling agent, or industry ASP. If we fail, then we are not contributing to that well-being. If we fail, society will look to other avenues that are less prone to fail for contribution.
What role will new and emerging technology play?
Technology is an enabler. It enables processes. A sound process enabled by sound technology is a critical component to success. But we must not be lured by the shiny object alone. The groundwork must be done to ensure the soundness of the processes. Technology then allows us to begin the work of execution and of optimisation.
This is why, for example, the use of technology such as APIs works when there is a process that they support which makes sense. We have first-hand experience of this. As part of our eTouch program, having deployed APIs with our carrier partners to enable Host 2 Host interactions centred around engagement across many links in the chain, we evidenced that the harder work was not the technical connectivity but rather the understanding and alignment of the processes, what was expected, and how the expectation would sometimes require a different thought ‘process’.
Look no further than sensor technology. Sensors these days can read temperature, humidity, shock, light exposure and a myriad of other pieces of information. The technology is wonderful and readily available; however, the processes that make the technology as effective as it can be are not where they need to be in a homogeneous way. Real-time GPS location trackers are similarly positioned, where the technology is waiting in many cases for the process to catch up. Our focus then must be to identify the role that the processes combined with the technology will play. And clearly, that role must be to address some of the maladies we have identified still exist.
Other expectations for air freight in 2022
We see a steadily increasing demand for environmentally friendly air logistics services. As offsetting is considered not the first choice any longer, customers are asking for solutions that allow them to reduce or avoid their emissions. Clean, renewable fuels are currently the most effective measure to achieve true decarbonisation in our industry. We have developed multiple solutions to support like customers with their sustainability goals. For instance, an innovative Sea-Air service, Sustainable Aviation Fuel (SAF) options, lighter pallets, or combustible, thinner wrapping foils to cover cargo on pallets.
Customers can avoid carbon emissions of their shipments globally with bio SAF and power-to-liquid or synthetic SAF solutions. Synthetic SAF is considered to be the long‐term solution for aviation as it can be produced without availability limits, avoiding biomass supply limitations, and can reduce emissions by up to 100%.
Close collaboration with all industry stakeholders plays a vital role in the attainment of the goals towards a low-carbon business model.