Escalating trade wars, industry consolidation, over capacity, and rising consumer expectations are adding pressure to forwarders and air freight services, driving investment in digital services, according to a report by global tech market advisory firm, ABI Research.
The ‘Air Freight Transportation Technology Trends’ application analysis report also found that e-commerce, tariffs, and disruptors are driving the need for investment in analytics, platforms, and professional services, driving air freight technology services adoption to rise by a 17 per cent CAGR.
The report also found digital aviation freight services are to exceed $1.7 billion in revenue by 2024, with connection revenues alone rising by 25 per cent from 2018 to 2024.
Technology innovation beyond safety, the report said is driven by the need for transparency and integration and digitizing aviation freight services improves business processes for slot reservations, goods tracking, online quoting, and digital invoicing.
“Beyond analytics and platforms, the international air freight industry will need to redefine the notion of delivery. Emerging opportunities include cold chain enhancements, near real-time visibility, and 30-minute deliveries via Unmanned Aircraft Systems,” said Susan Beardslee, principal analyst, intelligent transportation & e-freight at ABI Research.
“Competitors who do not embrace the evolution and lag behind early adopters will have to face inefficiencies, decreased profits, their partners, and their customers,” Beardslee warned.
ABI said near-term expectations are mixed for the transportation industry in 2019, but increasing air freight traffic is moving to APAC, including Vietnam, Malaysia, Thailand, and Singapore, and the long-term outlook is strong.
The report also found that specialty services will continue to thrive such as Panalpina’s temperature-controlled offerings, IBS Software’s iCargo integrated SaaS platform, Kuehne + Nagel’s Enterprise Visibility tool, and Inseego’s C-Track insights.
Expanding freight services include online marketplaces, ground equipment tracking and augmented reality for cargo sizing.
The report also said air freight carriers are intent on becoming closer to their shippers; digitizing and enhancing shipper-to-air carrier direct bookings will become the norm. At the same time, disruptive vendors including Amazon and Alibaba/Cainiao are growing their presence and influence, poised to drive further integration and consolidation.
And the digital evolution of modern air cargo will include the larger logistics picture from maritime to rail, over the road, and air, as well as connections to smart warehouses to address greater risk mitigation and margin/recurring revenue opportunities.
