Putzger perspective: Perfect storm lessons for air cargo
31 / 08 / 2021
It would seem that perfect storms can perfect themselves. Life in the logistics business since spring 2020 has been frequently described as a perfect storm, one that keeps going and gets worse.
One such moment of abrupt decline was the rapid hit of the latest Covid-19 outbreak in China on airfreight in mid-August, as swift measures to halt the virus slowed down airport operations, causing swathes of flight cancellations.
Some 42% of the daily flights from Beijing were hit, while Shanghai Pudong lost one-third of its normal daily flights.
Inevitably the loss of capacity aggravated the scramble for lift. Capacity had already been tight, and the impact of the Covid outbreak on container shipping translates into more cargo shifting to airfreight.
The abrupt capacity slump also reinforced the critical importance of visibility along the supply chain to detect disruptions as early as possible.
Recent efforts in this industry have been impressive, as airlines and handlers have equipped warehouses and containers with sensors and tags and striven to digitise processes as much as possible. For some carriers more sophisticated tracking capability is a mark of distinction.
External providers have pushed the envelope. In June a supply chain visibility platform introduced AI-powered technology for airfreight that enables automated and highly accurate estimated time of arrival updates.
According to the provider, this greatly reduces the number of e-mail enquiries for shipment status information, freeing up staff for other tasks.
In these frantic days nobody has the time to bounce e-mails back and forth to nail a booking, as the space may well have been snapped up online by another forwarder by the time the reply comes in.
The pace of the industry and its transformation has accelerated. It is increasingly becoming impossible to manage without the use of automation to perform routine processes.
The advance of online pricing and booking platforms reflects how more and more airlines and forwarders are looking for digital solutions to save precious time and costs.
With the proliferation of cloud-based technology offerings and off-the-shelf solutions, smaller forwarders can keep pace with their larger rivals.
They have often been accused of resisting technology, but that misses the mark. As entrepreneurs, they have to see a clear cost benefit before they embark on an investment. Today a lot of automation, like superior tracking, becomes essential to remain in business.
The service element that smaller agents like to stress comes on top of that.