Why digital standards matter in global trade
Headlines reporting supply chain disruption have been all too frequent in recent times. Port congestion, ...
The air cargo industry has an “embarrassing” track record in technology adoption, one senior airline executive said today.
Speaking at the Air Cargo China event in Shanghai, Lufthansa Cargo chief commercial officer Alexis von Hoensbroech said the industry’s slow progress was not for lack of ideas.
“I think, in general, the air cargo industry is still pretty traditional and it’s not really embracing technology.
“Although there are many ideas on what technology can bring, the ability of this industry to embrace change is actually very slow. We’re full of buzzwords and everybody talks about them without really knowing what’s behind it,” he said.
He highlighted the “awful” implementation of electronic air waybills (e-AWBs) as an example.
“People started talking about them in the late nineties, but it took more than a decade to actually turn the idea into a product. Now in 2018, we’ve just achieved 50% e-AWB penetration. This is 20 years after we started talking about it. It’s a really embarrassing performance in terms of implementation.”
Greater e-AWB implementation, combined with artificial intelligence-powered quotations that bypass the need for back-and-forth emails, could help to automate 70% of all air cargo transactions, he claimed, which would save the industry “$1bn or $2bn”.
Mr von Hoensbroech said: “If we don’t take this first step, we will not be able to take the next, necessary, steps to eventually get rid of all the paper documents in air cargo. This is not rocket science; once you have digitalised these documents, we can send 70% of all cargo without paper.
“It would also allow the centralisation of data, which would massively improve the efficiency of the whole supply chain. Once the paper is gone we can start moving away from the sequential movement of data. Today the freight moves and the data moves with it, but this is the most primitive way of doing it.”
He added that the rise of online freight marketplaces and digital forwarders would not mean carriers doing business directly with shippers.
“I don’t think air cargo carriers will change their approach. We don’t deal directly with shippers and we don’t see this changing, even though there might be some competitors coming up, simply because we don’t offer certain forwarder services that shippers need.
“Regarding the platforms; from our perspective, we’re ready to offer rates there, but only if there’s lots of forwarders on the same platform, which will then facilitate the transaction.
“This will increase transparency, because rates will become more visible in the market. But without the forwarder as part of the transaction I don’t think it’s going to happen.”
Mr von Hoensbroech is to leave Lufthansa Cargo to join sister carrier Austrian Airlines as chief executive in August.