The Building Blocks of Air Cargo Evolution: Digitization, Culture Shift and Sustainability
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The Building Blocks of Air Cargo Evolution: Digitization, Culture Shift and Sustainability

Lars Winkelbauer, EVP & COO, Polar Air Cargo Worldwide
Lars Winkelbauer, EVP & COO, Polar Air Cargo Worldwide

Lars Winkelbauer, EVP & COO, Polar Air Cargo Worldwide

The air cargo industry is at the point of inflection. The global supply chain must improve efficiencies and effectiveness to remain relevant, and players in the air cargo space are no exception. The process of handling air cargo can be truncated, with chain of custody changing hands from the time manufactured goods are trucked to a warehouse, shifted by ground handlers, processed through customs and loaded onto an air cargo plane. And the process continues when the cargo arrives at its destination port. Modernizing practices will allow air cargo carriers to be resilient, provide better, sustainable service to customers, improve transparency, and hasten response in the event of any potential disruptions.

In June 2017, IATA member companies adopted a resolution to accelerate the modernization and transformation of the air cargo industry, calling for digital transformation and harmonized standards, supported by data-driven decisions. With the imperative to evolve, and the need to adapt in order to remain relevant, how can air cargo players drive effective change?

There are three critical building blocks necessary to lay the foundation for digital transformation: digitization, culture shift and sustainability.

1. DIGITIZATION

Digitization is the entry point for evolving systems so that processes are streamlined. From eBookings to cargo tracking through to its destination, new systems need to be established and must operate seamlessly so there are fewer points of disruption in the flow of information. Air cargo is notoriously a paper-driven industry – IATA has said that an air cargo booking could be manually retyped as many as 97 times as it passes from one system to the next. While much of the reliance on paper stems from a history of regulations that require forms and stamps, new standards are opening up that make it more acceptable to reduce paperwork and leverage digital documentation. This will generate significant time-savings and eliminate potential for human error. In addition, such digitization will allow greater visibility into operations and producere liable data from which business decisions can be driven. Digitization will not only help air cargo carriers meet evolving customer needs for greater transparency into the transportation of their cargo, it will also help customers streamline their own operations.

2. CULTURE SHIFT

The rollout of new digital platforms and adoption of new tools can only succeed if the process changes are supported internally across the organization. Cultural shifts can be challenging. The key is evolving the organization before implementation of new technology begins. Communication is the first step. Everyone in every role needs to understand the vision for the organization and how shifting to a more integrated digital environment will help advance that vision. But the approach cannot be top-down imperatives – there must be a two-way conversation. Employees should be encouraged to share their ideas; it is the team on the ground, who handle cargo and balance loads, that know the ins-and-outs of getting the job done. Implementing processes without their input, contributions and buy-in will not result in progress. Building on the culture shift, rigorous and repeated training is necessary not just to rollout new processes but also to keep the organization nimble. As air cargo embraces digitization there is a real need to prepare employees for evolving roles that require new skills. We must build a diversified workforce: diversification of backgrounds, cultures, experiences and skillsets. For example, consider the impact of AI, IT, Blockchain and more on the air cargo industry, requiring data scientists, engineers and technologists to drive big data projects and evolve processes and practices.

3. SUSTAINABILITY

Embracing a digital transformation will have a clear tangible benefit on an organization’s environmental impact. The World Economic Forum’s Digital Transformation of Industries Project found that digital initiatives offer immense opportunity to help decarbonize the global economy. Air cargo is in favorable position compared with other modes of transport, but there is an opportunity and need to do more, and digitization enables and propels sustainable practices. For example, technical models for load-balancing have a positive impact on fuel consumption and thus carbon emissions. The drive to sustainability is a key business imperative to extend the longevity of the organization, can generate cost savings, and meet increasing demand for sustainability from customers. Consumers have driven a call for sustainability from brands for years, but now it is boards of directors, investors and business leaders leading the call for responsible business practices from partner companies. Sustainability is a positive outcome of the drive for digitization and industry evolution, and it is a requirement for the air cargo industry to succeed.

The point of intersection between digitization, culture shift and sustainability is the point of departure for evolution in the air cargo industry. Participants from manufacturers to carriers, from freight forwarders to the ultimate destination customer, will all benefit from the modernization in the field. Change takes time, but it is critical for organizations’ longevity. Carefully approaching digitization from the perspective of employees, helping them along the journey and seeking their input is key. Evolution is an ongoing process, not a singular point in time, and the same is true of culture shift. The resulting sustainability of newly-digitized practices is not just an ancillary benefit, it addresses customer imperatives and ensures we will have a world upon which to operate for the long-haul.

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