Digitization of the Air Cargo Industry is Slowly Taking Off

Digital platforms are also gaining importance in the air cargo industry. This became clear at the Frankfurt Air Cargo Innovation Lab at Frankfurt Airport on 8 November 2018. Airport operators Fraport organized the event for the third time in collaboration with the DVV Media Group and Air Cargo News.

Europe’s leading air cargo hub actively promotes the digitization of airfreight processes itself. Together with DAKOSY, Fraport has developed the new shipping portal INFr8 for all parties involved in the air cargo chain, enabling the first digital dangerous goods declaration (eDGD). Simplifying and streamlining processes is also the aim of Berlin-based start-up cargo.one, with its air cargo booking platform of the same name: a web-based spot market service covering all airlines. According to Oliver Neumann, one of the founders of cargo.one, more than 70 forwarders are already using the platform for bookings. The whole booking process, including instant confirmation, only takes two minutes.

Fresh Impetus for Investment Decisions in Digitization

“Innovation is not a technology problem – it is more of a mindset problem,” said Neumann. There is no lack of digital tools that can be implemented – the question is only which ones can actually improve certain business processes or services. Logistics companies in particular are often unsure about the investment decisions involved: “For most people, digitization is like a toolbox – there are so many things inside, but no one knows exactly what to do with them,” says Professor Christian Kille from the Institute of Applied Logistics at Würzburg-Schweinfurt University. The results of the study “Digitization tools in logistics: Deployment potential, maturity level and value contribution,” which describes the status quo, should help to remedy this situation and provide impetus for investment decisions in digitization. “Not every business can become a digital business, but every business can use digital tools,” explained Kille, who is one of the authors of the study. There is a suitable digitization tool for every company.
Forty-five percent of all Air Waybills (AWB) are not digital, but still paper-based. Boris Hueske, Head of Digital Transformation at Lufthansa Cargo expressed regret that, despite “decades of discussion”, consignment data is still not sufficiently available in digital forms (Electronic Air Waybill, e-AWB), meaning that there is a lack of transparency. At Frankfurt Air Cargo Innovation Lab, Fraport manager Felix Kreutel was also campaigning for a shift from paper to data to improve the efficiency and transparency of processes in the air cargo industry. However, industry giants are likely to develop their own concepts rather than adopt the collaborative approaches that are needed. “We have to do better. Together,” said Cargonaut CEO Nanne Onland, who wants to drive forward the integration and exchange of data in the logistics industry.

“America First” Jeopardizes Global Supply Chains

The keynote speech by Folker Hellmeyer, Chief Analyst at SOLVECON INVEST, was on the topic of collaboration and competition at a global level. Under the title “Changes and risks for worldwide business – Competition of cultures”, the finance expert talked about geopolitical risks like the “America first” policy, which threatens global supply chains, and China’s New Silk Road Initiative, which Europe cannot afford to ignore any longer. The international community must itself try harder to take advantage of the new trade corridors.

Innovative propulsion systems that do not emit any greenhouse gases can contribute to achieving the aim of reducing CO2 emissions in aviation. Aircraft manufacturer Airbus was awarded this year’s IDL Award (Innovation Award of German Aviation) prize for its innovative, hydrogen-powered fuel cell demonstrator H2T (Hydrogen to Torque). Barnaby Law, Program Director Hydrogen and Fuel Cell at Airbus, presented the functionality of the system that received the award in the “Emission Reduction” category. In future, it could replace the auxiliary power unit at the tail of the aircraft, which has so far been powered with kerosene.

To combat climate change, the IATA has set a series of ambitious targets to reduce CO2 emissions. Growth in aviation is to be climate-neutral from 2020, and CO2 emissions should be reduced by 50 percent by 2050. This is a considerable challenge for the air cargo industry, said Professor Alan McKinnon from Kühne Logistics University, as it will only be possible to replace kerosene with biofuels by 2040 at the earliest. The exponential growth in air cargo, driven in part since 2010 by the e-commerce boom and increasing transnational trade, is set to continue.

JD.com Cooperates with Chinese Airline

Global online retailers are also having an ever more disruptive effect on the air cargo market. While Alibaba recently announced its intention to establish no less than the world’s most efficient logistics network, JD.com is now following in the footsteps of US competitor Amazon. The Chinese online retailer has entered into a cooperation with the cargo division of Tianjin Airlines. The first Boeing 737 freighter with a JD Logistics logo was sighted on 6 November 2018.

Text by Benjamin Klare
Photos: Andreas Henn

Share This