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Digital Air Cargo in a nutshell

There’s no industry today that rejects technology adoption. Healthcare, retail, finances, and manufacture are becoming more and more digitalized. To embrace the rapid-pace supply chains, we tried to take a look at Freighto’s Digital Air Cargo (DAC) concept and find out more about its benefits for today’s logistics companies.

As the DAC whitepaper says, the project is a real-time bi-directional digital communication of rates, capacity, and bookings across airlines and forwarders. This drives cheaper, quicker, and more reliable air cargo, attracting more shippers and expanding air cargo’s market size and profitability.

Unfortunately, the air cargo industry isn’t growing as fast as the other branches and still struggles from the bureaucracy, unintegrated platforms, and legacy business models that unable to face the 2020 challenges. A half-century ago, the airline passenger sales began to digitalize. From the seat management to web-booking – the digital industry dynamics started to grow, driving the omnichannel sales.

And the same comes about Digital Air Cargo. Supply-side airlines lack business processes automation and ubiquitous connectivity. In other words, to enhance the customer experience and eliminate unnecessary costs, adopting new technology is a must. That’s why the Freightos group points at some of the DAC requirements for the freight forwarders. Let’s take a look at each of them.

Global Rate Management

According to Freightos’ research, the average spot quote from top freight forwarders takes over 40 hrs. This follows the bad rates management, low-level analytics, and sophisticated databases that often poorly integrated with the back-office. To fix it, the companies must embrace single-source-of-truth rate management – such as combining the contract rates from non-digitized airlines and live pricing from the websites. It helps customers to eliminate manual bookings and make the time-sensitive data work for your company.

Automated Buy-to-sell

Proper IT infrastructure enables freight forwarders to pull rates from airlines, average them, and add on a fixed or dynamic sell rate increase right before it is being sold to a customer. This solution helps to reduce operational costs and easily facilitate no-touch bookings.

In general, Freightos gather all the requirements in the one digital roadmap for DAC:

  1. Digital distribution of static rates
  2. Capacity management
  3. e-booking
  4. Revenue Management
  5. Leverage market data to optimize the pricing dynamics
  6. Omnichannel sales
  7. Flexible digital payments
  8. 2-way commitments (BSAs)

Researchers say that the DAC framework won’t affect the vital operational principles, but reevaluate them and bring to the next level. Combining digital platforms, omnichannel revenue, and top-notch business models – that’s the way to reach your strategic goals adopting the DAC. Digitalized business processes will surely make air cargo faster, cheaper, and more reliable while expanding the market.