After four long years, the logistics industry was desperate to return to the Trade Fair Center Messe München to network and do business at the leading trade fair for the logistics industry. Held from 9-12 May, the 2023 event welcomed 2,320 exhibitors from 67 countries and more than 75,000 visitors from over 120 countries who came to see all that was new in logistics and supply chain management.
During the pandemic, we all got used to working from home and conducting work on platforms such as Teams and Zoom, which sometimes provided a bit too much transparency into our lives.
To make light of this, the organisers put together a humorous video for the opening ceremony showing some of the scenes many of us have seen such as needing to leave a call for a home delivery, pet dogs misbehaving, taking off backgrounds to reveal your bedroom, forgetting to take yourself off mute and various other incidents which are either amusing or embarrassing.
The show was opened by the Co-CEOs of Messe München, Stefan Rummel and Dr Reinhard Pfeiffer who said people want to get things moving and tackle current issues together, summing it up by saying, “Nothing happens without logistics.”
Federal Minister of Transport and Digital Infrastructure, Dr Volker Wissing was present to open the show and was impressed by what he saw, commenting, “What you see here shows once again that the transport and logistics industry is right up there when it comes to innovations, progress and modern technologies. And what becomes especially clear at this trade fair is that climate goals aren’t just nice words, but rather that the industry takes them very seriously.”
Sustainability
Sharing knowledge is an important part of attending events, which is what the conference provided. For air cargo Europe, The International Air Cargo Association (TIACA) organised sessions to talk about important topics.
For the session Sustainability Programs: Critical for Industry Growth, TIACA Director General, Glyn Hughes was joined by Celine Hourcade, Founder of Change Horizon, Dr Harald Sieke, Head of Center for Logistics and Mobility Aviation Logistics at Fraunhofer, and Floris Oei, Sales Excellence and Sustainability Lead at KLM.
Sustainability means different things to different people but it is about how an organisation can continue to operate in a changing environment, said Hughes to open the discussion.
Questioning Oei first, Hughes highlighted Air France KLM Group’s sustainability strategy published in 2021, which contained ambitious goals for fleet renewal, using sustainable aviation fuel, cutting plastic waste, noise reduction and it has a sustainable procurement programme where all partners must sign up to a charter amongst its commitments.
Oei said setting targets is one thing but finding and establishing a roadmap is quite another so Air France KLM made sure its targets were verified by the Science Based Targets initiative (SBTi) to confirm it has a clear roadmap.
People need to be on side, with Oei commenting, “You can have all of these ambitious targets but if you don’t have the people standing behind you to make that happen, you are at a dead end. We are looking towards instilling that in our culture; it’s quite a challenge, there are some veterans in the company who are having trouble acclimatising to this but finding a common ground and establishing that this is something we need to do is going to be a core aspect of achieving the ambitious targets we have set ourselves.”
Hourcade said it is noticeable how sustainability is increasingly important to companies, with most large companies having a strategy, which have received the backing of senior executives.
Her survey for TIACA revealed that only half of companies who have a strategy have a sustainability budget and have teams with concrete plans to make it happen.
“Today, I think we are at the stage of a lot of discussions and commitments, now we need to get going in the implementation stage where we have concrete targets. We need to have dates and figures and we need a plan to achieve those targets by a certain date,” she said.
Hourcade’s survey revealed that only 55% of smaller companies had a strategy compared to 75% of larger companies, suggesting some think sustainability is not relevant to SMEs.
Cost can be cited as a reason for inaction, to which Hourcade advises that regulations and demands from customers and staff will only increase, meaning the cost of taking action will be higher when the inevitable happens.
It reminds her of the digitalisation discussions 15 to 20 years ago when people said it would cost too much to make changes.
Aviation was the first mode of transport with a net-zero target by 2050, said Hughes, and SAF will account for 65% of the target.
Only recently has SAF taken off, with Hughes telling the audience that 300 million litres was produced in 2022 but it is estimated that 450 billion litres will be needed to reach net-zero targets.
Oei called it a staggering gap that needs bridging and government policy will need to play a big role. The ReFuelEU agreement in the Fit for 55 package setting a minimum SAF uplift at EU airports of 2% by 2025, rising to 70% by 2050 was welcomed by Oei, saying, “I think government intervention is necessary because as much as want to do it on a voluntary basis, we are not going to be able to get the leverage that we need.”
Digital transformation
Air cargo is volatile and the last three years have been a rollercoaster ride, Ashwin Bhat, CEO of Lufthansa Cargo told the audience in his keynote address in the session, Future of Freight: The Digital Imperative.
The rollercoaster continues in 2023 and we are all screaming as it goes down. Such is the uncertainty, Bhat said there is no point asking anyone what will happen in six months because no one knows what will happen in the next three weeks, calling the crystal ball very hazy.
Technological transformation is phenomenal with Bhat admitting two months earlier he had no idea about ChatGPT or AI, now, he cannot open his LinkedIn feed without seeing posts about them.
Everyone has an opinion about AI, with some predicting it will wipe out our jobs but whatever happens, changes will happen.
“We cannot ignore the fact that the acceleration of technology is something that needs to be done to bring value and not because it is the latest fad,” Bhat told the audience.
Once Bhat had finished, moderator Reji John, Editor of STAT Media Group welcomed the panellists, Robert Fordree, Executive Vice President – Cargo at Menzies Aviation, Matthias Vogelsanger, Chief Technology Officer of Güdel Group, Zvi Schreiber, Founder and CEO of Freightos, Adnan Karaismailoglu, SVP Cargo Business Development and Organization at Turkish Airlines, and Suraj Nair, Founder and CTO of SPEEDCARGO Technologies.
The first question was whether digitisation and digitalisation are the same things. No, said Schreiber, because he likes being pedantic, digitisation is scanning a document and digitalisation is making processes digital but admits few others care.
Menzies started changing its digital approach a few years ago, which included recruiting a vice president for cargo technology, and hosting an innovation workshop in London because he admitted Menzies did not know what technologies were out there so it wanted tech companies to demonstrate what is possible.
In little over 10 years, Turkish Cargo has gone from being a small, regional player to one of the world’s biggest cargo airlines, and to do this, you need to build on the right foundations and build on them one step at a time, said Karaismailoglu.
Significant investments have been made in its fleet, processes and facilities, including the opening of the SmartIST hub at the new Istanbul Airport. The people need to be behind the strategy with the right mindset or it will not work, he added.
Describing SmartIST, he said, “It provides automation where required and a gate for future developments, not having everything in the best way for the next 20 years because there is no such way. You have to create an environment which will be flexible enough to keep up with future changes.”
The air cargo industry is in a strange situation, said Schreiber, with one leg in the digital world and the other is in the old world, highlighting pricing, which needs to be dynamic but airlines are still sending static rates.
He said, “Our platform WebCargo sends 35,000 queries every day in real time, we don’t cache any data. In 80% of cases, the airline sends back a static rate so it is digital but behind it is an Excel sheet where someone puts in a fixed number. It's an exciting time to enter the industry and complete the transformation.”
With new technology, the biggest problem is getting people on side, said Fordree, as they are fearful that robots will take away their jobs.
“Many things we’re doing complement what our people do. We’ve got an ageing workforce, we want to bring in a new generation, we can’t do what we do without people. Tech helps people, not replaces them and that’s our message: we’re not looking to replace you, we're looking to make your life simpler and easier, and that’s what tech does.”
This article was published in the June issue of Air Logistics International, click here to read the digital edition and click here to subscribe.