To get an answer, Dejan Markovic, Global Air Cargo and Logistics Leader at Deloitte was joined by Turhan Ozen, Chief Cargo Officer at Turkish Airlines, Hendrik Leyssens, Vice President Global Operations – Cargo at Swissport, and Tristan Koch, Chief Commercial Officer at Awery Aviation Software.
Explaining what Turkish Airlines saw during the pandemic, having to ground its passenger services at very short notice then pivot its business to cargo services, Ozen said this showed that the industry is agile enough to change when it has or wants to.
When it comes to digitalisation, Ozen said the industry needs to go on the same journey.
The biggest change Swissport has noted, said Leyssens, was the implementation of cargo community systems, stimulated by several factors including cargo being in the spotlight.
Covid changed meetings from face-to-face to virtual to hybrid formats in little time, and this changed how companies deal with the customers.
“I am sure that it is no coincidence that we see all those press releases about digital sales channels going live with airlines signing up to those channels. A lot of handlers are developing customer facing portals like we have done, which is a different way of interacting with customers. Covid has stimulated a focus on convenience as well, and I am sure that this has been one of the major drivers we have seen,” he said.
Koch said the pace of change could only increase as the industry could not have gone any slower, commenting that it was a shame that it required the pandemic to force the industry to change.
The three points were need, belief then curiosity. He said the industry was transformed in about a week and people adopted new ways of working but the solutions already existed, raising the question of why was the technology not adopted before.
This led to belief in technology, dispelling fear of losing control and your job.
“I still think it’s slightly superficial, the pricing and inventory part of the business has progressed quicker than some other parts but I still think there is a long way to go on the connectivity,” said Koch.
It has raised curiosity as air cargo was in the limelight, with people wanting to know what logistics and supply chains are all about, bringing new people to the table.
This has attracted disrupters who sensed inefficiencies to be fixed, with IT providers making up a significantly bigger proportion of attendees at conferences.
Koch is part of this change, having spent much of his career with airlines, only recently moving to the technology side.
Wherever and whatever the tipping point is, the industry is still far behind it. Air cargo remains fragmented and for aviation, passenger travel remains the priority, with most decisions being made for them, not for cargo.
Complexity makes digitalising air cargo challenging but Ozen is not a pessimist.
“I believe that if we can continue and even accelerate the progress further, in the next three to five years, hopefully not more, we can say that we are on the tipping point,” said Ozen.
The technology and capability is there, said Leyssens, the industry has crossed the tipping point, but it has not been embraced.
The industry needs to implement and use the technology but it is quite risk-averse, which is a barrier that needs to be removed.
A lot of focus has been automating manual processes, said Koch. The big leap is pushing this through all parts of the supply chain, then explaining to people why they need to share information for the benefit of everybody. “This new phrase, data is the new gold, if you’ve got gold you don’t want to give it away but I think the industry needs to take a different approach,” he said.
Awery is working with IATA to make data-sharing more effective and more freely shared. The tipping point is when the industry sees true efficiencies and not just replacing manual processes.
Major digital disruption does not come without challenges, said Markovic. The biggest challenges come from within, believes Ozen, whether it is the industry being fragmented or within organisations, with Ozen highlighting change management. He advocates a step-by-step approach, a gradual but continuous change.
Leyssens asked whether the industry had grabbed the momentum to drive change, saying the budgets, efforts, people and commitment were there.
He wondered whether they were fully utilised and if the momentum will be retained as the outlook gets gloomier.
Change management is the biggest challenge, according to Koch, saying that the majority of transactions are still done by email or telephone.
Awery has developed a hybrid system called eMagic, which reads inbound emails from freight forwarders, interprets it for airlines, offers a rate which can be changed and sends a digital response back to the forwarder.
People, especially the young, run their lives from their phones. Koch said, “I have two teenage daughters, that’s all they use to run their lives. To bring them into our industry and say here’s a load of paper or processes, I’m sure it’s not an inviting proposition for them. We need to make these changes to make ourselves more attractive to people coming into the industry. I realise that there are some step changes, it’s not like a big bang and everything goes online, we need to take these steps to make that progress.”
A lot of talk was about people but Koch highlighted that money is a thorny issue. At the start of the pandemic, many companies either reduced or got rid of their digital transformation budgets.
With a less rosy economic outlook, Koch wondered what the budgets will be for next year.
Koch had a message, “Don’t be afraid, technology doesn’t have to be expensive. I know you need to show an ROI on what you are doing but explore, be curious, we have the tools and ways of helping you through the transition. It doesn’t have to be the big bang approach that we talked about. If we want to keep this acceleration, we don’t want to sit here and say why did we decelerate in 2023. Let that not be a lack of investment or curiosity.”
This article was published in the December issue of Air Logistics International, click here to read the digital edition and click here to subscribe.