AA Cargo's Butler: differentiate and improve visibility or risk losing business

10 / 11 / 2015

American Airlines Cargo has called on the airfreight industry to differentiate itself from competitors and potential new market entrants or risk losing market share.

AA Cargo president Jim Butler said the risk of standing still and not differentiating was more significant than in the past as ocean carriers and integrators improved their services and new technologies allowed the potential for new market entrants.

The development of 3D printing, localised distribution and nearshouring, where production is located close to final destination, were also potential disruptors, he said.

“We are all facing much shorter deadlines, rapid technological change and more competition than before,” he said.

“Every day we see new technology platforms emerge that could produce near-term transformation in the logistics industry.”

To improve, the industry needed to reduce total door-to-door transit times from an average of seven days and also improve in its use of digital technologies.

“In our industry, we still provide significant push-back in the move towards electronic solutions, such as e-air waybills (E-AWB) and we have to move past this.

“E-AWBs are only the first step, we have to prioritise a strong push towards all e-freight as the benefits of aggregated data alone will ultimately open up new strategic opportunities.

“Recent momentum is encouraging, but we have to get there more quickly. Shippers increasingly expect to have visibility on the location of their shipments in real time and accessible across a variety of platforms.

“Our customers do not view this as a nice to have anymore, not in a world where such visibility has tangible effects on co-ordinating production schedules.”

Increased data visibility would also allow the supply chain to improve reaction to potential delays and other issues.

To improve visibility and speed, Butler encouraged the seamless sharing of data across the supply chain and closer co-operation between shippers, airlines, ground handlers and freight forwarders.

“The industry has been very fractured and speed will require an alignment of the key players; we need to look for opportunities to improve all aspects of the business," Butler said.

“But before we can talk about an integrated solution for shippers we have a long way to go to provide timely updates for each other to increase speed and improve efficiencies.

“Being able to quickly transmit last minute changes prior to arrival would enable air carriers to reduce the potential for refusals.

“Knowing when trucks are on route will allow airlines to better plan better traffic flow through the airport and therefore keep drivers from waiting for long periods of time.”

He said that while he felt all supply chain players should work more closely, he didn’t think this would mean airlines would go directly to the shipper.

“Our forwarding partners provide a lot of services that airlines could not do efficiently and in many cases could not do anyway,” he said.

AA Cargo president Jim Butler was speaking at Air and Sea Cargo Americas.