The building momentum of digitalisation

posted on 17th March 2022
The building momentum of digitalisation

More and more air cargo processes and functions are being digitalised, and the integration of modules and systems is becoming ever easier – thanks to the ubiquity of APIs and the inevitable retreat of legacy systems – laying the foundation for new efficiencies through artificial intelligence, reports Ian Putzger

It has been slow coming, but the past two years have brought further significant advances in digitalisation of various aspects of air freight, including within cargo handling operations, bringing extraordinary potential gains through artificial intelligence (AI) much closer to than seemed possible two years ago. And as more and more air cargo processes and functions are digitalised, and the integration of modules and systems becomes ever easier, an apparently unstoppable momentum is building, as the already achieved gains also make the further potential benefits increasingly apparent.
Hermes Logistics Technology, for example, has started working with the IT University of Copenhagen and Dnata to explore new machine learning models for the handler’s cargo business. This follows the implementation at Dnata’s Singapore facility of the tech provider’s New Generation Ecosystem (Hermes NG) – which aims to streamline workflows, provide greater transparency across the handling process, and improve data sharing for all sections of the supply chain. Hermes NG data can be used with AI and machine learning algorithms to help decision making and optimise business and handling processes.
And CHAMP Cargosystems has been rolling out its CargoSpot Mobile offering in air freight warehouses, reports core cargo product director Shaz Aslam, adding that CHAMP is getting ready to roll out a new checklist app for special cargoes. He has seen increased investment both from airlines and handlers.
Other technology providers also report heightened interest among handlers in digitisation initiatives. Awery Aviation Software has traditionally dealt with airlines and GSSAs, but over the last 6-12 months it has had more interaction with handlers, says CCO Tristan Koch.
Hermes’ CTO Marcus Campbell observes: “We’re seeing more and more interest in warehouse automation, automated retrieval systems that are able to interact with our CMS (cargo management system) and actually create the automated movement of cargo within the warehouse.”

Proliferation of sensors in warehouses
The proliferation of Bluetooth and IoT sensors in warehouses around the planet is producing a wealth of data and increasing the industry’s appetite for visibility.
“IoT is not about trying any more. We can see real benefits,” remarks CHAMP’s Aslam. He views the technology as an integral part of the journey toward smart facilities and believes that, before long, all warehouses in an airline’s network will be connected with IoT.
“The technology is there. The challenge is the rollout, installing in the facilities,” he says. “You deal with several departments. It’s more of a collaboration challenge.”

Data flowing from widening sources
Data are flowing through the system from a widening pool of sources as more and more information is captured electronically or converted into digital format through automation. The airlines’ push for electronic booking means for handlers that the shipment data they receive are increasingly entered by the forwarder at the time of booking, if not by the shipper if the forwarder has automated his own booking process.
“With fast and accurate data, a handler does not have to waste time correcting mistakes from booking,” says Koch. “Online booking matters greatly to handlers. The biggest single issue is the quality and timeliness of the information that the carrier sends.”

Cargo handler Menzies Aviation has been working with KCL, which provides a software application for paper digitisation. Whereas there are about 160 pieces of paper for a freighter that had to be printed, scanned, stamped and signed, now Menzies scans in one flight pack and the different stakeholders can log into the system to access the information at any time. During the first quarter this technology, which involves industrial-grade scanners, will be implemented in Melbourne and Sydney, says Rory Fidler, vice-president for cargo technology.

Automating bookings
Airlines and GSSAs routinely receive e-mail blasts from forwarders looking for quotes for a shipment, which they had to respond to with return messages. Awery offers a solution that automates the process. With a single mouse click the software reads the information in the e-mail and uses it to people a form for booking. If the database of the airline or GSSA harbours pricing parameters for the particular customer, this is automatically accessed.
“The conversion rate is amazing,” says Koch. For a Chinese airline that launched flights to Europe, Awery converted 60% of the bookings to automatic processing within weeks, he reports.

Making data cleaner
Fidler stresses the need to make data cleaner, which he calls a huge priority for everybody.
“Data really needs to be clean and as accurate as possible in order to leverage artificial intelligence agrees Campbell. “That’s an area where we’ve been putting a lot of focus in.”
As part of a broader logistics puzzle, the data in air cargo do not exist in a vacuum. Shippers’ need for end-to-end supply chain visibility entails the requirement for air freight data to be accessible to tools and systems that are not native to this industry. They have to be compatible with shipper systems and providers of multimodal tracking and visibility platforms like FourKites or Tive. Tech provider Kale Logistics Solutions is working with Dnata in Dubai on major upgrades to the handler’s platform. Among other elements, this includes plans for the interface with other modes of transport.
“We’re looking at things like sea-air, road-air elements, to move data from the port to air,” says Kale director Amar More.
Awery has been talking with companies that provide visibility for shippers to add an air freight solution to the mix. This has been a mixed bag, notes Koch. “Some of these activities are automated, some aren’t,” he reports.

Integrating with BCOs
When it comes to integrating with systems of beneficial cargo owners, there is very little standardisation and, if it exists, very little compliance, notes More.
For the most part, the issue is not an absence of standards, but a lack of adoption, he points out. “There is a UN standards library, but it’s not adopted yet,” he says.
Usually, interfacing is not a problem on a small scale, but when it comes to connectivity on a global level, standards are necessary, remarks Henk Mulder, head of digital cargo at IATA. The airline body is talking with standard setting bodies from other modes of transport to establish common ground.
“This is not about competition – who offers the best solution – it’s about compatibility,” he says.

ONE Record progress
During the pandemic IATA completed work on the specifications for ONE Record, the standard for data sharing to create a single record view of a shipment. “Some companies have implemented it and are using it on an operational basis,” says Mulder.
“The idea of ONE Record using an API to share data with a common data model is relatively new at an industrial scale,” he remarks. “On an individual scale, the most advanced companies have been doing this for a while.”
He sees transformative potential in this, pointing to a hackathon that IATA organised on a weekend. The first use of ONE Record there was traditional, like sending an air waybill, but soon the participants came up with solutions that simply were not possible before, he recalls.
“They can solve problems that they didn’t know they had or couldn’t do before,” he comments “This is not about challenges we can solve with a traditional, legacy approach.”

Broader visibility
The deployment of IoT technology in warehouses is not only increasing the use of shipment visibility tools but also the scope, allowing the monitoring of multiple parameters like temperature and humidity levels. This has created a new expectation to have standards for this aspect and a willingness to use them, Mulder notes.
He was impressed by the level of participation in the work on IATA’s Interactive Cargo Standard, a set of standards and guidelines for interactivity and devices. Besides identifying a common data model that everybody can use, work on this project involved clarification of legal terms and conditions of the usage of data as it changes hands, and the matter of safety approval processes for devices.
The working group structured a common approval process for tech providers to get the blessing of an airline for the use of its devices. Now IATA is planning to create a global database to show which devices have been approved by which airline.
Mulder expects other parties like customs to join this. “That platform will grow,” he predicts.

Integrating with other systems
Standards aside, integration of modules and systems has become much easier, notes Koch. In the development of new solutions, a major priority is to make sure that they can integrate with other systems, he adds.
Two elements have made this much easier – the ubiquity of APIs and the gradual but inevitable retreat of legacy systems from the scene. According to More, their demise is on the horizon. Migration to a cloud-based platform is a given, he says.
Aslam comments: “Whenever we have to interface with legacy systems, it takes more time. The application of today needs to interact with the outside world, it needs API capability, without the restrictions of legacy systems. The beauty of the app is, you don’t really have to learn it – unlike a legacy system, it’s intuitive.”

Technology providers partnering
Increasingly technology providers join forces to offer new solutions to their clientele or open the door to new markets. “We’re finding a lot of technology now merging together a bit,” says Koch. “We’re talking to partners about scanning systems.”
Hermes has teamed up with platform provider Nallian to offer truck slot booking functionality. “We intend to make that a key component in our CMS,” says Campbell. The pair are eyeing some other functionalities. “We are looking at payments; we are looking at automation systems,” he reveals.
Menzies is working with a cargo community system (CCS) in Los Angeles, where it now gets about 60 truck slot bookings a week. “We have a dedicated dock for people that are using that,” says Fidler. “It shaves off time for them.” Menzies plans to implement this in Sydney and Melbourne in the second quarter.

CCS e-marketplace extension
Slot bookings are often the first functionality that airport communities embrace, but CCSs offer a whole smorgasbord of functionalities, notes More. Kale recently partnered with Private Sector Foundation Uganda to offer a logistics e-marketplace across the full multimodal logistics ecosystem in the African country.
“On a platform, some participants may want to sell their services,” More says. “In Uganda they said: ‘Why don’t we build that as a core?’ A marketplace was always in our kitty. It was a natural extension of the port and airport CCSs we’re providing.”
At this point, the evolution of CCSs is about building fully functional platforms, followed by the adoption of standards. Down the road, he envisages the emergence of digital corridors between airports that can provide end-to-end shipment visibility. Among other things, this should reduce inventory in a supply chain, he remarks.

Machine learning potential
To most actors, the biggest future gains that digitisation opens lie in the use of machine learning. Aslam remarks that AI is critical to make goods and autonomous vehicles move in a smart warehouse.
It also helps in risk management, he adds. It can determine which shipments could have risk, and AI-powered apps can scan various social media for information about looming closures of facilities and other disruptions in the supply chain.
Fidler is planning to install technology that uses 3D cameras in combination with algorithms to accurately capture shapes and dimensions of cargo. These data flow to another module which leverages artificial intelligence for load planning, using algorithms to maximise loads on a plane by computing the best distribution of cargo among the ULDs in line for the flight.

Raising pallet utilisation
The system should raise utilisation at the pallet level by three to five percent. “That’s a game changer,” he says.
AI should also be used in conjunction with internet protocol (IP) cameras to deal with incidents in the warehouse. Traditionally, this involves security staff going through hours of CCTV camera footage to establish what happened, but this could be taken over by AI. Moreover, the technology could prevent some incidents in the first place, for instance sending an alert when an unauthorised person enters a dangerous goods area, Fidler thinks.
“AI could also be used to check if cargo is properly screened,” he adds.

Intelligent document management
One area where More sees potential is intelligent document management in handling companies. “For example, as air waybills are uploaded, the machine learns if there is a shipment to Turkey and tax information is missing,” he says.
While handlers are discovering new possibilities in AI, Mulder notes that this will take some time to unfold. “It is slow coming,” he observes, pointing to the large number of actors in supply chains, which makes it challenging to connect all the data. Still, the advance of digitisation has brought this a lot closer to reality than seemed possible two years ago.