By Adina Solomon
Technology providers for air cargo can easily name the challenges the industry faces.
“The No. 1 challenge that they have is how can they respond to a market over which they have very little control,” VK Mathews, founder and executive chairman of IBS, an India-based IT company specializing in airfreight.
Mathews also mentions how most airlines still operate with around 50 percent capacity.
Regulatory challenges abound, says Jim Viscardi, vice president, U.S. critical infrastructure & emergency response at Smiths Detection. Smiths provides security screening services for the airfreight industry.
Finally, Richard White, founder and CEO of software provider CargoWise in Australia, says the industry needs to become paperless and individual players need to have standardized systems in order to better share information.
“On the one hand, the industry wants to change,” White says. “But on the other hand, the industry doesn’t know exactly how to change.”
Companies discuss many of these challenges in boardrooms and conferences around the world. Experts interviewed have one answer for all these problems: technology.
Identify the problem
Mathews of IBS points out a well-known fact: A piece of cargo is only moving 10 percent of the time while in transit. The rest of the time, it’s waiting to be moved.
Part of the problem is the regulatory barriers standing in the way.
“There should be technology available to make the freight industry paper-free,” he says. “There should be technology that is available to make sure that every piece of cargo is moving as fast as possible with all kinds of regulatory permissions.”
Before a piece of cargo arrives at its destination, Mathews says the Customs systems should be notified of what’s coming so they can give an automatic green clearance.
In addition, he says with technology managing routes and capacity, cargo’s waiting time should be reduced from 90 percent of transit duration to around 70 percent.
Viscardi says having more automation also helps on the security side of airfreight.
“We and our customers do everything we can not to impede the flow of commerce, so in terms of the main attributes of the product, it needs to be accurate, needs to get screening done quickly but efficiently and effectively,” he says.
With technologies such as Smiths’, including X-ray screening, trace equipment and a data management system, air cargo companies can automate a usually labor-intensive process.
“The key there is that we are taking all the screening that’s done,” Viscardi says. “We automate that process for them.”
The information is even better because equipment such as Smiths’ FirstView-LINX collects X-ray images of the cargo and automatically attaches them to the AWB, making for a more complete chain of custody and better information for auditing purposes.
Regulators can also use the data to analyze what has moved through the supply chain, understand the patterns and start to tailor regulation around certain sets of carriers, Viscardi explains. Perhaps some carriers require added, reduced or special screening – or no screening at all.
“It just generally makes the carrier’s life easier,” he says.
White of CargoWise discusses standardization of software across companies.
“Standards are a very complicated problem,” he says. “Most people look at standards, and their eyes roll back and they start falling asleep.”
Instead, White talks about the idea of linking players so nobody needs to re-enter information.
“It’s complicated because the players in the industry often have a-similar systems, and sometimes those systems are aging. Sometimes they’re extremely modern. Sometimes they’re in the middle somewhere. Sometimes they use different standards. Sometimes they have different interpretations of the standards,” he says.
So CargoWise has software that allows seamless processing across various platforms.
“One of the most important components is a tool, which we built over a number of years, to enable us to map all those different players together so that for [our users], it looks like a common platform, even though the players that our customers are talking to may have three, four, five different platforms,” White says.
CargoWise users can also receive and transfer data – and never need to give a thought about what standards others are using.
“That’s a pretty powerful idea,” he says.
‘Smaller, lighter, faster’
“There’s always the smaller, lighter, faster aspect of technology,” Viscardi says of the components technology should have.
For example, think of trace equipment that is portable if not handheld, allowing for workers to easily move around a warehouse.
“One of the philosophies that is going to take place is any device, anytime, anywhere,” Mathews says. “I should be able to be in any part of my warehouse to see what I want to see.”
White says most logistics companies want to provide some sort of uniqueness in their software in order to create a competitive edge.
“On one level, we spend enormous amounts of time making everything completely standardized, and allowing everything to connect and allowing the processing to occur in a straight-through way so that the minimum amount of data is rekeyed or not rekeyed at all,” White says.
So the ability for companies’ software to follow standards while still offering a high level of customization to their customers is significant.
“What faces their customers is highly specific and can be tuned in a way that gives them their own unique customer presentation,” he says of CargoWise’s software.
Viscardi lists off the technologies needed to ensure cargo is free from threats. First, there’s the 145180-2is, a dual-view X-ray system. Then there’s the trace equipment such as the IONSCAN 500DT. Finally, the FirstView-LINX provides data management.
In short, three devices are used to do one giant task of screening cargo.
“It’s not just about using one technology,” he says. “It’s about using multiple technologies.”
Air cargo’s tech side must also possess the ability to anticipate and respond to future obstacles.
This couldn’t be more apparent than in security technology.
Theoretically, in the next 12-18 months, some sort of new threat to cargo security will arise, Viscardi says.
“We need to be able to react to that,” he says. “When that happens, you either have equipment that’s just met the minimum standard and requires a lot of development in order to include that new threat, or you can work with a vendor like us that has built capacity, if you will, into the product.”
Sure, there’s always that smaller, lighter, faster aspect of technology. But it goes beyond the clichés, allows day-to-day activities to proceed and forces people to anticipate issues before they arrive.
The next big thing
The so-called “next big thing” in technology proves problematic to predict.
White says the biggest trend in logistics is the effect of online retail on the supply chain. A few years ago, people talked about online retail as a coming wave.
“We’re not in the coming wave. We’re in the wave itself,” White says. “We’re seeing through our customers millions of parcels per month being shipped through the airfreight, particularly strongly through airfreight because of the nature of online retail. It’s very fast.”
Before, he says, a typical airfreight warehouse used to handle about five ULDs a day. Now, some ULDs are stocked with 10,000 parcels each, so the warehouse must handle 50,000 parcels.
“You have to approach this thing as a technology problem because you certainly can’t put enough bodies in the warehouse, nor could you afford the bodies in the warehouse, to count 50,000 parcels a day,” White says. “You have to do it using electronic scanners and various other things.”
Though high-volume, low-value retail only accounts for 10 percent of the supply chain now, it’s growing 30 percent per annum, he says. Meanwhile, the bulk supply chain, which has been the nature of air cargo until now, remains flat.
Viscardi has a different view of what is next on the horizon.
“The next big thing is a more cohesive solutions-based product,” he says, “or set of products that vendors provide, so rather than selling any carrier a set of products, a set of boxes, it is a truly comprehensive solution for screening.”
But Viscardi says there is no single “next big thing” in airfreight security technology – and that may just be true for air cargo technology as a whole.
“I think it’s a series of little things,” he says. “What you’re going to see is not so much a single technological advancement that is going to change the way that things happen.”