The air cargo industry is facing one hurdle after another. Economic pressures, the high cost of crude oil, increasing freight capacity, falling spot rates, labour shortages, natural disasters, the war in the Ukraine, and lingering pandemic effects are taking a toll on airports, airlines and ground handlers.
According to the International Air Transport Association (IATA), in 2023, the industry will experience a projected 4.3% decline in volume and a 22% reduction in yields. This follows decades where the air cargo transport industry saw its volumes double almost every ten years with IATA reporting a 11.9% growth rate increase just last year (2022) over pre-pandemic levels. But by November 2022, the problems were in full view. IATA reported global air cargo tonne-kilometers (CTKs) declined by 13.7% year-on-year for that month; 10.1% lower than the 2019 CTKs.
Understandably, the industry is turning to new technologies to help them address their current challenges, while also driving greater efficiencies, asset management, productivity, profitability, and sustainability. Knowing how these advanced technologies incorporated in optimisation software are advancing air cargo handling is important for all stakeholders.
Air Cargo Transport and Handling Market
A report issued by Market Research Future (MRF) on February 1, 2023, stated that the air cargo market is positioned to reach USD 130.19 billion by 2030 and a compound annual growth rate (CAGR) of 4.9% between 2020 and 2030.
These projections are based, at least in part, on the industry’s increasing application of leading-edge technologies such as Artificial Intelligence (AI), Machine Learning (ML), the Internet of Things (IoT), advanced analytics, and related digitalisation and automation. These technologies are being leveraged to support optimum real-time decision making, lower operating costs, enhanced safety and security, regulatory compliance and sustainability.
The increase in air cargo demand along with the growth of e-commerce, particularly as a function of the pandemic-imposed lockdowns, too is driving the growth in freighter aircraft, which Cirium predicted will reach over 4,100 aircraft by 2041. Cirium noted that this growth will reflect both the addition of 3,560 freighter aircraft over the next 20 years, as well as, it will include 1,060 new builds (30%), as well as 2,480 conversions of passenger aircraft (70%).
In order to benefit from an increased fleet to address its capacity problems, the sector will still need to effectively manage industry disruptions, improve their cargo route networks, and optimise their unit load device (ULD) management. There is also the matter of meeting Service Level Agreement (SLA) terms, which has become increasingly more difficult with today’s ongoing flight disruptions.
There is progress being made through various industry and government initiatives. For example, air cargo airlines, cargo handling companies and logistics providers are starting to build partnerships and collaborations such as the Airport Cargo Community Systems (ACCS).
This digital information platform is supporting the seamless interface between parties to help improve cargo movement, planning, productivity and logistics cost savings. Airports are adopting more cargo-centric approaches to facilitate better loading and unloading from freighters.
Governments are also showing increased support for the air cargo industry by providing subsidies and tax incentives. What is, however, already making a measurable difference for aviation companies is their leveraging of optimisation software to support vastly improved air cargo handling processes.
Optimisation software’s role in improving air cargo handling
Today’s leading optimisation software solutions are integrated cargo solutions that leverage hybrid AI and advanced algorithms to provide a user-centric, decision-making platform and advanced graphical user interface to address three key areas:
- The optimisation of tours within predefined risk levels encompasses maximising the utilisation of vehicle capacity, while managing opportunities and risks for combinations across flights;
- The application of telematics to increase operational awareness and deliver dynamic planning adjustments based on actual traffic; and
- The optimisation of driver/task assignments which, in turn, drives maximum driver efficiency, improves SLA compliance, and prioritises tasks based on economic criteria.
Let us drill down further on each of these areas and how integrated cargo solutions deliver important benefits.
The optimisation of tours
To support tour optimisation, cargo optimisation software focuses on the assessment and improvement of tours by displaying tour details, task/tour progress, actual wait times (i.e., control posts), capacity utilisation/time savings, and the potential for other opportunities to improve tours.
Using the cargo solution, a single view is gained which helps planners make better assessments and improve tours, as well as optimise driver allocation, monitoring the progress on various tasks, and gain ready access to the most frequently required information. The solution delivers an intuitive visualisation of all pertinent tour details (i.e., flights, products/cargo, locations, number of Unit Loading Devices/ULDs, vehicle utilisation).
A tour progress indicator is triggered automatically through integrated telematic data. Actual waiting times at security control posts are measured by mobility or telematics (i.e., geofencing) and waiting times for the next tasks to be completed are automatically forecasted through waiting time measurements. Previews of suggested combinations of tours are provided with the user able to navigate between window panes and through the lists using their keyboard’s arrow keys. Accepting the suggested combinations is easy with just one click of the space key.
Telematics
By helping ground handlers track their containers, ULDs and dollies, telematics also supports optimised cargo handling. No longer does a ground handler have to guess where a dolly is located, whether or not it is empty or loaded, where a container/ULD is located, where empty containers/ULDs are located, or whether or not a container/ULD is damaged.
With the combined information on the location/status of dollies and ULDs, ground handlers are enabled to locate each ULD on the apron. This gives them the ability to maximise the capacity and utilisation of each dolly which further enable them to achieve optimised fleet management and avoid unnecessary addition of equipment and the related costs.
Telematics used in conjunction with the cargo solution’s real-time, optimised allocation and assignment of ULDs and dollies to the right tasks, takes cargo handling processes to a whole new level. By identifying damaged equipment, these technologies also support smart maintenance schedules and avoid less prudent automatic scheduling of maintenance for equipment that may not need it.
Optimised driver assignments
Typically, the optimisation of driver assignments is guided by the use of a Gantt chart. There are, however, deficiencies in Gantt charts. For instance, the only visible priority criterion is the time axis and task type. Alternative scenarios like planning options or combination opportunities are not visible.
Therefore, Gantt charts do not support enhanced situational awareness or optimum decision making. In contrast, the cargo optimisation software presents tasks in priority order with priorities calculated based on pre-set rules which take into account urgency, SLA terms, cargo product and task/activity type. Using the solution, allocators can even enter a query as to the reasoning behind how various tasks were prioritised. In addition, the solution enables easy adaptation of process to address new cargo in cabin (CIC) regulations, by applying matching SLA to CIC regulations automatically.
In their latest releases, the most advanced cargo solutions presents views of both cargo and baggage handling with the user able to easily change the view from cargo to baggage, and vice versa. This enables better utilisation of staff which prevents many empty runs, as well as equipment. For example, if a driver is taking outbound baggage to a freighter, once offloaded, they can then take inbound cargo from a nearby stand on their return trip.
Benefits derived
The application of cargo optimization software has proven to yield many benefits. Functional benefits include automatic tour planning and task assignments within predefined risk levels, as well as the prioritization of SLA compliance for high value cargo. In addition, users benefit from the ability to quickly implement new processes and accommodate new regulations. From an asset management standpoint, the solution advances cost-effective capacity utilization, reduces unproductive trips thereby increasing driver and dispatcher productivity, along with optimized equipment utilization. Exceptions are also better managed via the software’s optimized resource suggestions.
Overall, cargo optimisation software supports an organisation’s strategic and tactical planning, as well as its operational dispatch. By enabling the forecasting of staff/full-time employee demands, scenario planning to address potential disruptions, and optimized shift plans, strategic planning can be achieved.
The solution’s ability to optimise roster creation, and support digital smartphone workflows (i.e., to address staff’s vacation requests and shift swaps) and roster publication, tactical planning is supported. Digital and optimised task allocations to tug drives and loading teams on the day of operations, combined with the prioritisation of ULD transports, real-time response to operational changes, and ensuring of SLA compliance all support optimised operational dispatch processes with an up to 50% reduction in voice communication.
Some users are also achieving up to 35% additional output from their workforce without increasing their labour costs. Through the heightened transparency and situational awareness the software provides, trouble spots and other inefficiencies are identified so that problems can be solved promptly.
Future developments
Ahead for air cargo handling is wider spread digitalisation of related processes. The TIACA’s 2022 INSIGHT Report found that 34% of 204 survey respondents, which included airlines, airports, ground handlers, freight forwarders and represented of other supply chain related businesses, had not yet deployed any digital tools to advance their processes. On a more positive note, 78% of the survey responded reported having accelerated their digital transformation in a move toward operational improvement.
Along with digitalisation, there is continued emphasis on helping the air cargo industry attract more people to the field and retain existing workers. The Future Air Cargo Executive (FACE) program was developed for this purpose. Open to all air cargo and logistics employees under age 35, FACE is holding summit as part of the annual IATA World Cargo Symposium. The curriculum will be on innovation and transformation of air cargo, supply chain management, mobility and IT solutions.
Sustainability in air cargo is also a top priority for the industry with many already making strides in their re-fleeting, commitment to sustainable aircraft fuels, electrification of ramp vehicles, and application of digitalisation and advanced technologies like cargo optimisation solutions to drive greater efficiencies and lower carbon emissions. All of these measures bode well for the air cargo industry even as it faces a challenging future.
