Uncapping new technologies can benefit air cargo
We usually spend New Year’s Eve at home with my wife falling asleep well before the ball in New York City’s Times Square drops at midnight. So I was amazed when she accepted an invitation to a neighborhood party to ring in 2014. She decided her job was to make a dish for the potluck dinner, while mine would be to get a “nice” bottle of wine – not an easy assignment for someone whose two criteria for buying wine are “cheap” and “inexpensive.”
Bypassing my usual brands at the store, and arriving at the shelves with the more pricey stuff, I found that many of the premium wines featured not corks but screw-on caps. The fact that corks themselves are no longer a true indicator of value is exciting news to me, since I can now buy good wine and not have to fiddle with a corkscrew.
As I drove home, my thoughts no longer focused on the luxury of the vanishing cork but rather on the effect this trend must be having on the winemaking and cork industries.
And then, as I always seem to do, I brought it all back to our air cargo industry. Certainly, as the economy improves, many of our customers will emerge not only with higher volumes but a different look, as well. Challenging times provoke creativity as we think of ways of making products or providing services with the same or better quality for less money. This may be what is happening with corks in the wine industry, but you can be sure that other types of businesses are changing as well.
Manufacturers of technology products have always tried to make gadgets smaller, faster and better. Check your top dresser drawer and see if you can find an old smartphone from just 10 years ago and you’ll see what I mean. The same goes for laptop computers and music-playing devices. While so many of these devices are getting ever smaller, companies are also constantly seeking ways to decrease the volume and weight of their packaging in order to save shipping costs.
Accordingly, many freight forwarders are noticing that unlike past economic recoveries, where volume rebounded to higher levels, many shipments are returning but with smaller sizes and weights. Could this have an adverse long-term effect on the freight transportation industry? How are other industries dealing with this new reality?
If there is one axiom to remember, it is that high-volume shippers will never cease their efforts to get the highest value for the money they spend on moving freight. Cyber Monday served as a great opportunity for Amazon, an innovative and hugely successful fulfillment company, to generate a highly positive piece by the television show 60 Minutes that continually expressed wonderment at the company’s processes. The notion of delivery drones advanced by Amazon in the story not only generated widespread attention across Internet-based media but in the freight-forwarding arena as well.
Of course, delivery by drone has enormous short-term technical, logistical and regulatory issues associated with it – particularly when it comes to the safety of people on the ground. But given the march of technology and an unflappable determination that Amazon has to make this work, something akin to air drone delivery is indeed a possibility, maybe even a probability, over the long-term.
In the wake of the 60 Minutes story, the U.S. Federal Aviation Administration announced its plans to promulgate a regulation covering the increased use of privately operated drones. This move follows the FAA granting permission for six centers to test and better understand operational goals, aviation safety and air traffic challenges related to the relatively new technology.
For freight forwarders, the real effect of all this may not be delivery drones whizzing all over the skies in the next few years, but rather other interim (and no less disrupting) innovations that may come to market in the near term. For example, a California-based company is designing a blimp that will be capable of transporting thousands of tonnes of freight anywhere in the world at speeds of about 100 mph (160 kph). These vehicles may not require use of an airport and could conceivably pick up from a shipper’s parking lot and deliver to a recipient’s mountaintop location on another continent.