Opportunities for air freight industry transformation this year

posted on 8th March 2023
Opportunities for air freight industry transformation this year

Cargo Community Systems being implemented at dozens of airports and ports across the world will drive growth and innovation, connecting the varied stakeholders on a common platform and changing the industry forever, highlights Kale Logistics Solutions’ CEO Amar More

Air cargo demand will likely decrease in 2023 compared to 2022 as spending on goods is declining from pandemic-driven highs. Furthermore, global inflation, looming war, and other factors like modal shifts are all acting against air cargo growth.
But 2023 is full of opportunities for those who inspire customer confidence. The outlook for the year is positive with fundamental trends such as digitalisation and sustainability. The year will not require a core change in strategy but (the industry) should continue to drive measures already underway and maintain a forward-looking willingness to learn. Also, according to IATA, the global airline industry is expected to finally return to profitability in 2023.
Cargo Community Systems (CCS) will drive a lot of growth and innovation in the industry. These platforms will connect the varied group of stakeholders in the air and maritime industries on a common platform, changing the industry forever and for the better.
These CCS act as an accurate ‘Air Cargo Single Window’ system that eliminates duplication of data entry (in the air cargo value chain, the same data gets entered at least six times, if not more), reduces unnecessary paperwork, addresses airport congestion issues, enhances the security of the air cargo supply chain, and brings shipment visibility to all stakeholders.
An airport being an anchor of such a platform will transform the whole industry as the airport is a strong neutral player in the supply chain. In Kale’s estimates, Air Cargo Community Systems can unlock over $9bn annually and save around 120,000 trees a year, thereby contributing to environmental conservation.

Challenges and opportunities
The logistics industry has varying degrees of IT maturity among its stakeholders. Large players have sophisticated IT solutions to manage their end-to-end operations, but the small and medium-sized enterprises (SMEs) are still on excel-based data – or, worse, maintain physical files. Though they are disparate in operations, what links them is the common data and the same cargo they handle at various times during the shipment journey. With different contours of IT systems, the movement of cargo across the supply chain suffers. Data discrepancy, time-consuming operations, and a lack of trade visibility and transparency exist, making the entire supply chain inefficient and non-conforming.
Making the logistics fraternity aware of the benefits of digitisation is the most critical part. In several regions, they are still reluctant for various reasons. Stakeholders believe that digitisation will bring extra costs and that they need to set up a separate infrastructure. However, only some understand that the tech solutions do not require a different infrastructure cost.
Kale has created this airport and port community system platform where the data, instead of being exchanged on pieces of paper, is exchanged electronically. This helps eliminate congestion and unnecessary paperwork, and it brings in a lot of visibility to processes. The cargo community systems are accessible, affordable, and scalable to the needs of the airports/ports, thereby synchronising the entire supply chain.
New and emerging technologies
Technologies like Blockchain, AI and Machine Learning, IoT, mobile apps, robotics, and big data will shape logistics and cargo movement in the future. Let’s look at some of them:
Blockchain – Transparency and data privacy are critical issues for air cargo stakeholders. Right from sharing crucial advanced information safely to securing the information from phishing attacks and data thefts, the need to safeguard data is pretty high. That’s where Blockchain comes into play. Blockchain has seen an upward adoption in use cases like Bill of Landing, Crypto, Certificate of Origin, and Digital Trade Corridors.
Artificial Intelligence – Predictive and cognitive capabilities is the need of the hour for the logistics industry, especially for the transportation companies to identify faster routes to reach the airport/port terminal. Data sets about inventory, supplier performance, demand fluctuations and even conditions along a route, such as weather or customs delays, can be used to plan and/or act in real time, facilitating decision-making and increasing speed.
IoT and Wearables – In the past few years, wearable gadgets have engulfed the markets pretty much globally. The next trend is creating wearables that enable performing business functions remotely. 24/7 cargo movement tracking and receiving and sending advanced information are some examples of activities that can be performed with wearables.
Robotics – Chatbots and language models like ChatGPT have the potential to revolutionise the logistics industry. By providing instant, accurate information and streamlining communication, ChatGPT can help logistics companies improve efficiency, increase customer satisfaction, and reduce costs.

Working together more effectively
Any Cargo Community System thrives and grows only with the industry participating and contributing. The beauty of this platform is that it can accommodate competing companies to provide complementary point solutions by honouring data rules that are not conflicting and proprietary.
The air cargo industry continues to be dominated by paper-driven legacy systems and procedures which are time-consuming and expensive to comply. Clearly, there is a need to expedite some of the technology initiatives to not just automate all information systems but also to streamline redundant processes and regulations. There is a need to integrate air cargo infrastructure and overall global and regional logistics infrastructure – with the likes of multi-modal logistics hubs specifically catering to airports – and create hubs for transhipment of air cargo by simplifying processes.

Improving air freight processes in 2023
We are working on some of the game-changing technologies that have the potential to change the way cargo is handled. Digital transformation is now an integral part of the functioning of logistics enterprises, governments and communities. We continue to play a critical role in this transformation, helping clients embrace new technologies initially to cope with the crisis and, since then, to innovate at scale and grow their businesses. As we engage with more than 100 airports and ports across the world to simplify their technology landscape and strengthen their core by building a cloud-based digital foundation and embedding intelligent automation into their cargo operations, we are also on a mission to create the world’s largest Digital Logistics Cloud-Enabled Platform for the international supply chain.
We have kept the innovation wheel churning, offering e-services to enterprises, and designed a Sea-Air Corridor for multi-modal cargo movement, introduced the Logistics e-Marketplace, Enterprise Logistics and Customs Control Tower.

Amar More is CEO of Kale Logistics Solutions. www.kalelogistics.com