Digital air cargo: 40 per cent now available online, says Freightos

WHAT a digital difference two years of global health pandemic has made to the air cargo industry’s manual, paper-based, legacy ways of conducting business, observes Thelma Etim, editor of aircargoeye.com.

Findings from digital disruptor Freightos Group’s second comprehensive survey on the subject of air cargo digitalisation — its first was conducted in 2019 — not only reveals a marked long-awaited change in attitudes towards digitalisation but also reveals how, over the last 24 months, third-party online airfreight booking platforms have suddenly become highly popular amongst carriers responding to demand for greater visibility, speed and efficiency, something from which the booming B2C e-commerce sector already benefits immensely.

The bad old days of forwarders frustratingly waiting for telephone call responses, or a fax or an e-mail from an airline confirming their cargo capacity booking or that the goods have actually flown as booked — could eventually be over, the report discovers.

The latest survey shows that almost 40 per cent of global airfreight capacity is now available online — “shifting air cargo e-bookings from vision to reality” — it says.

Freightos’ findings from its Global Air Carrier Digital Connectivity Report 2022 indicate that 40 per cent of carriers now allow forwarders to both interrogate their websites for real-time prices for available capacity and also for e-bookings activities. This compares with 27 and 18 per cent of ocean liners, it says.

“25 per cent [of air carriers] now offer contract, spot-booking and tracking application programming interfaces (API) compared with zero in 2019. On corporate websites, 46 per cent of airlines now offer instant rate searches and a third of them offer instant e-bookings, versus 10 and 25 per cent respectively three years ago,” the report underscores.

Few allow payments to be made online

WiseTech Global’s CargoWise, Cargo.One, CargoAi, Hangar A and IBS Software’s iCargo’s SPRINT are among the disruptor e-bookings platforms now being utilised by a string of airlines including Etihad Cargo, Qatar Airways Cargo, Saudia Cargo, Lufthansa Cargo, Air France/KLM Martinair Cargo, Emirates SkyCargo, Turkish Cargo, IAG Cargo, Virgin Atlantic Cargo, Air Canada Cargo, American Airlines Cargo, Tap Air Cargo, MasAir, MASCargo, LATAM Airlines group, EL AL Cargo, Finnair Cargo, Singapore Airlines Cargo, Cargolux and many more.

Despite this remarkable progress, there is still a long way to go. Few carriers, just 17 per cent, offer e-bookings for allotted volumes, and only four per cent enable payments to be made online. Nevertheless, online shipment tracking is now widely utilised by 42 per cent of airlines, the findings show.

Peter Roberts, head of distribution at IAG Cargo, endorses the benefits of the industry’s digitalisation journey. “Not only have our e-bookings increased, but the average weight per e-booking has too, suggesting that customer-trust is growing. In addition to improving both customer satisfaction and our reach, the data unlocked through e-bookings also enables better business intelligence and a data-driven strategy,” he says.

The airfreight division of the International Airlines Group (IAG) is among a string of major players which have developed their own in-house portals that operate in tandem with the platforms of the disruptors.

Johnny Rubio, chief commercial officer at Azerbaijan cargo airline Silk Way West, points out that the biggest challenge for the mid-sized carrier has been how to introduce e-bookings into its processes without a massive investment of resources and capital. “By partnering with proven providers instead of developing in-house, there was no need [for us] to reinvent the wheel. Digital sales not only make our range of products highly visible, but they also make them available to a wider customer base,” he states.

Currently, more than 38 per cent of the world’s airfreight capacity is digitalised — a massive 90 per cent increase in comparison with only one year ago. “In the fragmented air market, airlines are eager for the ‘low-touch’ access to new customers, new segments and new geographies that platforms represent, even at the cost of making price and service comparisons easier. And, the volatility of air cargo during the last two years serves as a catalyst for this trend,” says a Freightos statement.

Shifts in API utilisation

In the meantime, over the last two years, different strategies towards the utilisation of APIs have been emerging amongst individual airlines. “Whilst some do not prioritise sharing their APIs, others make them widely available to provide better access and closer ties with customers, whilst others [simply] promote them as premium, paid products,” the report says.

Freightos believes this recent trend in particular is significant. “API progress will be transformative when information can be shared end-to-end digitally and automatically. Nevertheless, from just three years ago, air cargo APIs have gained significant traction,” its survey says.

The latest Freightos survey findings notably include:

• A quarter of the top airfreight carriers now all share contract and spot-rate data, as well as e-bookings — digital requests with instant confirmation — via APIs;
• For some — 17 per cent — spot-rates communicated to customers are adjusted based on real-time capacity changes;
• Tracking data APIs have become the most prevalent [tool], with a third of carriers offering them, but with less progress in e-airwaybill (eAWB) APIs, even though the non-profit digital container shipping association (DCSA) estimates that air cargo carriers could collectively save US$100 million annually with a shift to eAWBs;
• As in sea freight, amongst carriers with APIs, about one third do not publicise or promote them to their customers. “These [air] carriers may just not see value in sharing these connections, or this fact may illustrate [their] reluctance to enable easy price comparisons — whether in a customer’s system or on a third-party platform.”

Simone Huber, global air operations manager at forwarding giant Kuehne + Nagel (K + N), has discovered that APIs and an airline’s automated processes now allow K + N to gain quick access to capacity and rates in real-time — “directly from our transportation management system (TMS). This eliminates slow manual processes via phone, e-mail and carrier websites,” she reveals.

In contrast, other businesses are perceiving that the convenience of APIs is just a new premium service offering. Some carriers have developed suites of their own APIs available on a subscription basis. Some individual forwarders are also developing their own APIs — alongside online portals — to improve their own efficiency and customer service standards, the research shows.

One example of this is multimodal consolidator ECU Worldwide, which proffers both website features and APIs that start from the initial quote and e-bookings process and extend through the entire less-than-container-load (LCL) shipping chain. More than half of that entity’s overall bookings are now digitally derived, it reports, with almost 50 per cent through the API. According to ECU, these new digital channels have reduced the length of the booking process by about 20 per cent, and customer retention is now highest among its digital customers, the report adds.

Philip Blumenthal, chief transformation officer at ECU Worldwide, discloses: “We think of it as a triangle of efficiency, visibility and intelligence. We save time and costs. Our customers not only get the efficiency and satisfaction of an instantly confirmed shipment, but they also gain visibility and insights into their supply chain that they need now more than ever.”

The Freightos findings also point out that some forwarders are now utilising its WebCargo product’s rate management system which enables customers to examine rates and book shipments with the forwarder via a simple e-mail. “Rate management systems, carrier-forwarder/shipper booking portals and platforms, and forwarder-shipper portals/platforms are already proving the benefits of digital connectivity to the different links in the chain, but are mostly siloed to that particular connection and feature,” the report observes.

The real leap will come when these are all [finally] interconnected and automated. “That stage will open up a new world of possibilities for efficiency, visibility and intelligence in the air cargo supply chain,” Freightos concludes.

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Originally published at https://aircargoeye.com on 20 April 2022