Joining up the dots
For e-commerce to really
deliver the goods, both
metaphorically and literally,
there is a need to encompass
the whole journey: that is,
from A to B. Achieving this
has been something of a
bugbear in the past, although
the emergence of last mile
logistics providers has changed
all that to a degree. The news
last autumn that saw Delta
Cargo partnering with Roadie
to launch DASH Door-to-Door
is a case in point; rather like
Amazon investing in its own
fleet of aircraft with a view to
cutting out total dependence
on the mainstream freight
transporters, so Delta’s
initiative has caught the
industry on the back foot.
True, the service is currently
US-based but in its favour, it
does extend to over 50
destinations – and it’s a
two-way service, in that it
embraces both pick-up and
delivery of goods.
The Delta initiative is too
clever to be ignored and it
seems unlikely that no other
carrier will follow suit; after
all, the small parcels business
is, well, big business. Delta
was coy about being drawn
on the future of this roll-out,
saying merely that by the end
of this year the service would
be extended to all its hubs.
Thus an international service
offering might, at least for the
moment, remain a pipedream.
The need for speed
If one thing has arisen out
of all this online purchasing
activity, it’s that the pressure
is now firmly put on the
retailer to dispatch the goods
to the customer as quickly
as possible. More than that,
full transparency of the
transportation operation
is vital: just as everything
from large cargo to a suitcase
can now be tracked from its
point of departure to its final
destination, so a consumer
expects updates on a package’s
progress through the various
distribution channels. It’s not
just the retailer who is in the
pressure cooker, though, for
the carrier and the handler, as
well as shipper and forwarder,
all have a part to play in this
chain.
The Internet has made all
this high speed trade possible,
although the Internet, of
course, was merely the catalyst
in the equation. To keep prices
low there has to be efficiency
of operation: the digitalisation
of the cargo chain has been
happening, and the electronic
air waybill, until quite recently
reluctant to come to the party,
is now to be seen at increasing
numbers of cargo functions.
But as IATA notes in its
document, all this change
cannot occur overnight,
although occur it must if
the sector is to keep up with
the consumer. Amongst the
desirable targets that need
to be met are security of the
actual logistics chain as well
as a simplicity of operation;
simplicity, after all, equates to
an optimal level of efficiency,
which in turn encourages best
practice.
A co-ordinated operation
is almost a prerequisite here
and that very co-ordination
must be open to fresh
ideas and new technology;
indeed, the case for the
disruptor has never been
greater, as has already been
mentioned within the pages
of Air Logistics International.
Finally, collaboration cannot
be overlooked if the future
is to be one of coping with
increased demand.
Industry thoughts
Gerry Burgin, whose whole life
has been wrapped up in the
needs of the cargo system, has
very specific thoughts when
it comes to e-commerce. As
one who was involved in the
very first attempts to move
the air waybill from paper to
electronic (see Air Logistics
International, October 2019),
his thoughts on e-commerce
are extremely pertinent – and
in the light of the failure of
the sector to finally rid itself
of paper, he sees some obvious
parallels, as well as problems.
“As has been noted before,
the e-air waybill initiative
has stalled. Why? Because
there is no uniform platform
at present that enables this
change between all the players.
I fear that there remains an
educational gap between
agents and airlines and until
this is resolved, progress won’t
be made.
“E-commerce is a sign of
the times. Today we have
the giants like Amazon and
Alibaba; but there is also
Mercado Libre, tipped as
the next Amazon for Latin
America and Rakuten, which
serves Japan. I’m convinced
FREIGHTER
FRENZY
Amazon is amongst the customers
on the books of aircraft lessor
Titan Aviation, so it was
interesting to learn in January
this year that Bain Capital Credit
would be forming a joint venture
in order to build a diverse leasing
portfolio of freighters.
Within the initiative Bain and
Titan have committed to provide
US$360m and US$40m of equity
capital respectively, which may
be supplemented with additional
commitments over time, in order
to acquire new aircraft over the
next few years.
Under the arrangement
Atlas Air Worldwide (which
owns Titan) will also provide
aircraft management and lease
management aid to the venture.
Unsurprisingly, this long-term
joint commitment is looking to
capitalise on the demand for
cargo aircraft, which in turn
is underpinned by a healthy
e-commerce market.
www.airlogisticsinternational.com February 2020 17
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