Technology and the smell of fear: 'I love it', says American Airlines Cargo chief
American Airlines Cargo is embracing technology: during the long run-up to installing its iCargo system, ...
Forwarders need to rein back their “monopolistic” tendencies and learn how to collaborate and share data to ensure a successful future.
“Forwarders now want to keep their options open; they hope they might get a better rate with a different carrier. So for less than 10% of shipments, they will hijack the whole logistics chain,” said Arnaud Lambert, CEO of IT company Champ Cargosystems.
“We need to change the mindset – there is bigger value if you share than if you keep the data. Otherwise you hold 90% of the chain hostage.
“The fundamental question is about sharing,” he said, speaking at TIACA’s Air Cargo Forum last week in Toronto.
Shippers also expressed their support for greater transparency from forwarders.
“Fragmentation is delaying and making the coordination of data more complex,” said Denis Choumert, chairman of the European Shippers’ Council.
Customers should be at the heart of technology decisions, he added.
“If this industry is to retain its margins, it needs to get smarter in the way it responds to customers,” agreed James Hookham, secretary general of the Global Shippers’ Forum.
“Thousands of new customers are looking for ways to distribute goods. But we need common ownership of data. Shippers don’t just think uni-modally. The 2017 spike in air cargo was transfer traffic from deepsea shipping. Shippers expect and need a common definition and visibility.”
However, visibility from individual forwarders is not sufficient, argued the panel.
“Transparency is very important. What a forwarder shares with a customer is not transparent – they need access to all information,” said Bart Pouwels, head of cargo for Amsterdam Airport Schiphol.
“That’s where we need to go. I don’t believe in a supply chain, but a supply community.”
Lars Magnusson, business architect for Ericsson, said: “As a freight buyer, you can get integrated solutions from your service provider. But you don’t hear the door close behind you – and then you are stuck. These type of monopolistic approaches are not for the future.
“You need to configure your supply chain for specific processes. The days of fixed supply chains and massive lanes are over. You need access to data across many shipments.”
Mr Choumert added: “Small shippers would like a one-stop shop, but larger shippers would like an interface with different parts of the supply chain. “
Lack of transparency gave forwarders too great an opportunity to overcharge at the expense of shippers, argued Mr Magnusson.
“We need network sharing. I can tell the service provider that I need this shipment on this date. So perhaps I could truck it all the way at a lower cost. But I want an upfront and honest answer – and not to end up having to pay for air freight.”
Mr Hookham argued that quality measures should be included in the shared data.
“The industry has got to start demonstrating how shippers have benefited from this supposed visibility. I want to see real examples.”
The technology is there, and investment need not be more than 1% of revenue – and the benefits could be huge. Artificial intelligence, for example, could be used to predict which customers would opt for which solution, they said.
“Digitisation is the way to go – but in small bits. Use existing ecosystems, use each other’s learning,” said Dheeraj Kohli, global head of Unisys.
“It’s an exciting time. Adoption and education is key. If not everyone adopts, it will not work. And if we are going to build the future, we have to act today.”