Freightos and IAG Cargo drive digitalisation

By Rebecca Jeffrey

Freightos’ global vice president of business development Camilo Garcia Cervera. Photo: Freightos

IAG Cargo and Freightos are stepping into 2023 with an ongoing digitalisation partnership that has seen customer accessibility and useability go from strength to strength.

In June 2019, cargo booking platform WebCargo by Freightos became the first live user of IAG Cargo’s digital APIs (Application Programming Interfaces).

The partnership provides freight forwarder customers with instant access to rates and route availability on the WebCargo platform and enables them to make and manage bookings in real time to International Airlines Group (IAG) subsidiary IAG Cargo’s worldwide destinations.

In addition to enabling booking through WebCargo, IAG Cargo also invested in developing APIs that can be integrated directly into customer systems, allowing customers the choice to book via IAGCargo.com or their own system.

Air cargo companies are embracing digitalisation which has helped WebCargo’s evolution and increased the benefits for IAG Cargo, says Freightos’ global vice president of business development Camilo Garcia Cervera.

“IAG Cargo has seen a whole evolution of a marketplace.

“When IAG Cargo joined WebCargo three years ago, digitalisation and e-bookings were at the beginning stages.”

Now there are over 30 different airlines offering their capacity and rates on the WebCargo platform.

Cervera says that the insights and data that the platform has been able to gather as it has grown have been shared with IAG Cargo to aid them in decisions about adjusting capacity and rates.

“IAG Cargo has seen a great digitalisation journey, which has perhaps gone from purely transactional to a lot more strategic,” he says.

IAG Cargo – whose sister companies include Aer Lingus, British Airways, Iberia, LEVEL and Vueling –  entered into the partnership at a time when it aimed to invest in digital solutions and online booking on its website, as well as digitally “distribute across a variety of channels and partners,” explains the company’s chief commercial officer John Cheetham.

He says: “What we see with WebCargo by Freightos is a great opportunity to further our distribution to reach customers that haven’t interacted with IAG Cargo before.”

On the subject of whether digitalisation aids planning for unexpected changes within the industry, Cheetham says: “I think working with forward thinking partners like WebCargo by Freightos allows us to improve the amount of data and information that we have.

“That will drive good decisions, irrespective of what the external factors are. And that’s critical to us.”

More recently, WebCargo launched a new service named ‘WebCargo Pay’ that allows forwarders to pay for their bookings on the platform rather than having to use a separate payment tool.

IAG Cargo is one of the companies that took part in the trial beginning May 2022.

“We want to make sure that we help airlines expand their customer base without increasing their financial exposure, whereby WebCargo by Freightos provides the technology and the means for both airlines and freight forwarders to increase their business,” says Cervera.

“WebCargo Pay is already available to customers in the UK, US, Ireland, Europe, India, Singapore and South Africa, and will soon be available in other markets.

“It offers companies additional insights into who their true customers are, and how to present capacity and rates to new customers.”

Cheetham adds: “It’s given us visibility of a customer group that would previously have been completely invisible to us and an opportunity to distribute our capacity to customers who would not normally hold IAG Cargo, British Airways or Iberia Airway etc. waybill stock.

“Our interaction with these types of customers previously would have been via co-loaders, intermediaries and consolidators and we wouldn’t have had the visibility of who’s necessarily actually buying our capacity.”

He adds that taking part in the trial has helped IAG Cargo more clearly identify customers that are the right fit for its prioritised product, which targets customers with specific shipments, in contrast to customers engaged in consolidating freight and moving large amounts regularly.

“IAG Cargo’s prioritised product has late cut offs, a high priority on board and early handover to the customer. It’s designed for specific shipments that need to get to specific destinations at certain times with certain urgency.”

John Cheetham, IAG Cargo

John Cheetham. Photo: IAG Cargo

Market differentiation

The advent of digitalisation has inevitably seen an increase in digital platforms for the air cargo community.

However, Freightos, Cervera says, has evolved beyond a booking platform to differentiate itself from market competition.

“At Freightos we cater for the requirements of the different stakeholders in the in the supply chain industry, including shippers, forwarders and carriers, latterly catering for the needs of airlines, ocean liners and road feeder services.

“It’s a much broader view on digitisation, the one that makes us different to others and the one that is allowing us to use digitisation to really transform the industry.”

In June 2022, Freightos and Gesher entered into a definitive merger agreement to see the portal being listed on the NASDAQ stock exchange.

Due to take place early this year, this is expected to generate additional funding for Freightos to keep on investing in the development of digitalisation-related products, software and features.

Meanwhile IAG Cargo and Freightos plan to work on strengthening and adapting their partnership to market needs.

Cervera says: “We are jointly working on ensuring that our coverage matches the broad network that IAG Cargo offers through its subsidiary company flights to ensure that we bring business from the 90 different countries where we have customers and where IAG Cargo has a significant presence.

“We are also working on producing data that IAG Cargo can use to maintain its leading position in the market by adjusting its product offering to its customer bases as often as required.

“It’s a partnership based on growth and added value and that really is what we are looking for.”

Cheetham is optimistic about IAG Cargo’s digital future with Freightos. “We’re digitally investing heavily in IAG cargo.com to provide a far more functional platform for our customers to interact directly with us.

“And we’re investing in working with third party platforms like WebCargo to improve the opportunity for customers to interact with us digitally.”

“Some of the data that’s available from work we’ve already done has really helped us to drive and design products that are suitable for our customers as well as put capacity in the right areas.”

He adds: “We’re also putting a renewed emphasis on the e-airway bill to improve our penetration there.”

Is digitalisation on track?

The air cargo industry has been criticised for being too slow to adopt and implement digitalisation, but this is unfounded points out Cervera.

“If we look at the speed of adoption of digitalisation in the last three to four years and we compare this growth to that in a parallel industry, very few cases will be able to show the exponential growth that we’re seeing.”

The speed of implementation with current initiatives compared to older ones is evident, he says. For example, the e-airway bill is just now being regarded as successful, despite being introduced more than 20 years ago.

However, Cheetham believes there is a long way for the industry to go in getting a handle on digitalisation.

“I don’t think I know a single air cargo executive who’s happy with the level of digitalisation that’s been achieved within the industry so far.

“We look over to the levels of online booking penetration that the passenger market has and we’re jealous of it.”

But, Cheetham adds, it’s important not to compare the air cargo industry like for like with other industries.

“The air cargo industry is slightly more complicated than other industries. We have a lot of paperwork that must travel with shipments.

“Shipments by their nature are very bespoke. It’s not one person per seat. Cargo doesn’t necessarily follow the same rules that other things do.”

Cervera says Freightos is seeing is a continuous exponential growth in e-booking transactional activity.

On WebCargo geographical trends specifically, he says: “Our largest market for WebCargo by Freightos is Germany, but our fastest growing region is the US.”

The service offering is tailored depending on the level of adoption and different business cultures, he explains.

“We have a significant presence in markets like India and clearly our offer there needs to be different to the one that we currently have in Japan and China, for example, but the overall trend is of growth.”

Cervera says the three main industry challenges are airlines’ outdated IT systems that cannot handle APIs and therefore third parties, how to use recently established digitalisation-friendly culture to integrate digitalisation into businesses and securing the resources to implement digitalisation initiatives.

However, he adds all company stakeholders need to value digitalisation for its worth in changing how a company operates.

“It’s important that digitalisation is not perceived as just an IT project. It’s important for IT and we need IT colleagues onboard, but digitisation is completely changing the way people are thinking and operating.

“Digitalisation needs to be embraced by everybody – from chief executives down to agents on the ground.”

Cheetham agrees: “Digitalisation is not individual projects here and there. It’s a change in ethos.

He says it encompasses evolving APIs, making sure that data is surfaced correctly and the information from booking platforms feeds into IAG Cargo’s systems correctly and accurately.

“The industry really has taken a step change in embracing online booking and the reasons behind that is that we’ve improved the API’s.

“When customers make an online booking, they bring back far more information than they would have done two years ago.”

He says progress with the e-airway bill is an example of how digitalisation is being treated more seriously now.

Challenges specific to IAG Cargo include connecting all its digitalisation initiatives together, specifically increasing the functionality by improving track and trace and gathering more meaningful information around the dimensions of booking.

Booking platform WebCargo develops payment service

Freightos sees strong platform growth in Q2 2022

Freightos launches airfreight rate and booking portal

Forwarders soon to offer real-time pricing to shippers through WebCargo

 

 

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Rebecca Jeffrey

Rebecca Jeffrey
New to aviation journalism, I joined Air Cargo News in late 2021 as deputy editor. I previously worked for Mercator Media’s six maritime sector magazines as a reporter, heading up news for Port Strategy. Prior to this, I was editor for Recruitment International (now TALiNT International). Contact me on: [email protected]