The air cargo business is undergoing seismic shifts. International trade is set to double in the next 20 years. Letters are becoming rarer, parcels more numerous.

On average, cargo generates 9% of airline revenues in combined operations

E-cargo efforts, including the e-air waybill, are part of the qualitative modifications required to meet the new dynamics. But the handling, storage and distribution of goods transported by air must be redefined too. Business models, architectural and process designs, technologies, and workforce skillsets must all change.

Typically, the throughput of an air cargo facility is 10 tonnes per square meter, which, as FTKs rose in the 1990s, led to larger and larger facilities. But height and space limitations in airport environments means the pros and cons of facility expansion, the distance from the belly space aircraft gates and premium property locations have to be balanced.

The goal is to move to a cargo facility of the future, where man and machine work in harmony to offer both greater productivity and superior customer service. Fully automated high-rack warehouses, automated and green vehicles navigating autonomously through the facility, and employees equipped with artificial intelligence (AI) and augmented reality (AR) tools will empower air cargo to deal with the new dynamics.

“It is both important and urgent for the industry to transition to the modern age of supply chain technologies and systems if it wants to remain relevant in a world driven by data, information and microsecond decisions being made via artificial intelligence,” says Tim Strauss, Vice President, Cargo, Air Canada. “This is the clear path to the next generation of efficiencies and differentiation between providers of air cargo services. It is very likely that the shippers will eliminate airlines and handlers who are unable to work in this new era of distribution/information and most certainly will be side-lined in the e-commerce, pharmaceutical and perishables market place.”

Fit for purpose

“The cargo facility of the future must be safe and secure, green, automated, connected, and smart,” says Brendan Sullivan, IATA’s Head, Cargo Operations. “This will ensure it is fit for purpose in size, location and for the people who use it.”

Safety and security need to start upstream. That way, onsite screening can be designed to be integrated into the supply process so that no additional steps or touchpoints are required. Molecular screening is likely to dominate. Not only can it screen all commodities, including lithium batteries, live animals, and pharmaceuticals, but also it will allow product identification and safety checks in a fast and lean process. Prohibited materials such as illegal ivory can quickly be recognized, for example.

Environmental responsibility will be equally important. Designed correctly, cargo facilities will contribute to aviation’s overall environmental impact reduction targets, such as carbon-neutral growth by 2020 and halving net emissions by 2050 based on 2005 levels.

“Emissions can be reduced by the use of zero or low-emission technologies, such as solar panels,” says Sullivan. “New facilities can also introduce other efficiencies, such as optimized water and land use. Where possible, potable (drinking) water use will be replaced with water from other sources, including rain water from roofs and tarmac, treated waste water and recycled cooling water. Land use will benefit from a reduced horizontal footprint as facilities will maximize the use of space.”

Moreover, says Sullivan, green facilities will protect their owners from energy price increases as well as carbon-emission taxes, resulting in overall cost reductions.

Robotic systems

A key part of the environmental improvements will be automation. Generally speaking, more machines means less process waste.

But automation will have the greatest impact on productivity. Autonomous material-handling equipment will weigh and move the cargo to the next location, machines will sort it automatically and manage inventory while the build-up and break-down of cargo will be performed by robotic systems.

“Robots will be especially important in improving safety, such as dealing with toxic spillage and handling over-sized or extremely fragile cargo,” says Sullivan. “And automated storage and retrieval devices mean racks can be closer together and free up time for personnel to continue those tasks that still need to be performed by humans.”

Robots have the added advantage of being able to monitor and communicate instantly and comprehensively. Sensors will be able to capture handling information as well as display the required electronic documentation. In short, Sullivan exclaims, “cargo will be interactive!” This is especially crucial given that 80% of operations are outsourced to third-party ground handlers. The constant flow of accurate information is essential to improved efficiency.

“It creates real time visibility,” says Sullivan. There is operational visibility on how the facility and personnel are performing, which can be used to drive improvement. And there is customer visibility to understand and predict what the customer needs.”

Such added benefits as better predictability of maintenance needs and the improvement of employees’ health and safety will result in overall cost reductions.

Cognitive learning could also be used to train a combined AI and AR system to recognize more complex scenarios or operations. An understanding of special loads, for example, could suggest the best approach for staff, with instructions, tests, and approved tolerances immediately pinpointed on an image of the cargo.

This translates into business flexibility. The cargo facility of the future will continue to be at the mercy of the cargo industry and process whatever is being transported by air at those times. The facility therefore needs to be adaptable to the shifts in, for example, package size, technology, and customer interfaces without the need for a complete overhaul.

Calls to action

IATA is calling for the air cargo industry to:

• Embrace industry standards and handling best practices
• Accelerate the implementation of digital technologies
• Collaborate with partners to re-design the flows of goods and data
• Listen to customers and understand their needs
• Re-think business models to absorb growth coming from e-commerce, pharmaceutical and perishable markets
• Prepare the workforce for the future
• Be flexible!

“Ultimately, this is all about the customer,” Sullivan informs. “The cargo facility of the future will mean customers will be more engaged, receive greater transparency on the services offered, benefit from complete traceability and can interact in real-time when necessary. Through the cargo facility of the future, air cargo will be able to increase customers’ overall satisfaction.”

The world's freighter fleet will grow 70% in the next 20 years, from 1,770 aircraft to more than 3,000

“For many customers and shippers, the information about goods in the transportation cycle is equally as critical as the physical goods themselves,” agrees Air Canada’s Strauss. “They are making next-level plant and supply chain decisions based on this data. Operating a modern information-driven facility will allow the shipper to plan with confidence and eliminate or lower many of the downstream expenses caused by poor or incomplete data, extended truck dwell times, and massive amounts of communication efforts spent in the recovery mode. Satisfaction with the airlines that move in this direction will take a rocket-like trajectory.”

Words: Graham Newton