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Next generation: The digitisation of air cargo processes

Air cargo, digital solutions

The digitisation of air cargo processes continues across the industry. Keith Mwanalushi monitors some ongoing digital transformations.

Back in April, Korean Air said it had just implemented the IBS Software iCargo, the next-generation cargo system based on cloud technology in what seems to be a roll over agreement from an earlier 2018 partnership with IBS.

The result is combining the full scope of end-to-end cargo business functions of Korean Air – reservation, sales, terminal operation, revenue accounting, cargo portal and more in a single, integrated system.

“At the end of 2019, we plan to launch a mobile portal to make it even easier to make reservations and a revenue management system solution to improve profitability,” the airline tells this publication in a statement.

This is how is works: iCargo replaces a legacy software and nearly 35 disparate satellite systems with a single, unified, cloud-based platform covering the entire spectrum of the cargo business, including sales, booking engine, pricing, capacity control, cargo operations, air mail and cargo revenue accounting.

The integrated technology solution will connect all the critical business functions of cargo movement which will considerably enhance customer experience, provide the agility to innovate at speed and position Korean to execute at scale.

The rollout also included the introduction of IBS’ suite of mobility capabilities, including next-gen android based barcode scanners and apps on mobile devices such as tablets with integrated electronic workflows at Korean Air’s global cargo hub at Seoul Incheon Airport.

Through this, IBS believes Korean Air is well positioned to transition into a digitally-enabled operations centre enabled by next-gen mobility solutions. The airline’s Incheon cargo hub handles 1.6 million tonnes of cargo annually and manages 140 flights per day including dedicated freighter operations.

Korean Air says iCargo, which is based on cloud technology, is part of the carrier’s digital transformation of the future. “The new system will lead change and further enhance the quality of customer service in the fiercely competitive cargo industry.”

Air cargo, digital, technology
Digitisation is rolling out throughout the cargo sector

The airline believes the system has a notable advantage when it comes to customer convenience.

“It enables us to provide consistent service through an integration of sales-reservation-operation systems. It also provides up-to-date information via customised monitoring function and tracks the status of shipments in real-time, through e-mail or SMS, depending on the customer’s preference,” a spokesperson writes.

The transformational implementation also included the launch of the brand new Korean Air Cargo website, developed from scratch in partnership with IBS, with a fully integrated business toolkit, that will facilitate online booking, tracking, e-airway bills, terminal operations, mail handling, revenue accounting and data warehouse capability.

The next phase of the roll out will see the introduction of a fully integrated Cargo Revenue Management System (RMS) developed using advanced analytics and machine learning algorithms in association with Korean Air.

When asked how cost savings are achieved by implementing these new cargo management systems, Korean Air points out that elaborating on the cost part can be quite difficult.

“Sometimes system change is inevitable due to the business environment but it can be a turning point in terms of improving customer service. Through the overall system transformation, we expect various effects such as automation in business, enhancement of mobile function, and online reservations.”

As previously mentioned, Korean Air is developing an AI-based Cargo RMS solution in cooperation with IBS. This will create a system to manage reference prices and capacity distribution by flight, based on cost to improve profitability.

RMS is a sales-related system and is not linked to cargo operations so far, the airline says.

Middle East Airlines – Air Liban (MEA) is another recent adopter of the IBS system.

MEA has implemented the full suite of iCargo capabilities spanning cargo booking engine, capacity management, pricing, hub operations, warehouse management, ULD management and cargo revenue accounting in a complete switch from the system they had been using.

Air cargo: IBS iCargo
Middle East Airlines is another recent adopter of the IBS system

With this, IBA say MEA has migrated to a unified cargo management platform to manage all their cargo business needs; from worldwide sales, with improved revenue and capacity management, handling terminal operations at their nerve centre (the Beirut hub by upgrading to a more automated, streamlined process and technology) and to fully integrate the back-end billing, invoicing, accounting and interline processing with the core sales and operations function.

Speaking of ULD management, Korean Air recently announced they would award the management of its entire fleet of more than 16,000 containers and pallets to Unilode Aviation Solutions, the provider of outsourced ULD management and repair solutions, for a five-year term.

This new agreement creates one of the largest ULD management partnerships in the industry and will see the setup of a regional ULD management office at Korean Air’s hub in Incheon and the takeover of Korean Air’s existing ULD maintenance and repair facility at Incheon International Airport.

Unilode said they will provide additional services including the management of Korean Air’s cool containers and horse stalls and will also take care of the supply of pallet accessories within Korean Air’s global network. Unilode will supply pallets and lightweight AKE containers from its global ULD pool.

Interestingly, Unilode is increasing visibility of cargo shipments through robust tracking services and outsourcing programmes. The airfreight container and pallet management solutions specialist are blazing a trail in the implementation of next generation tracking technology.

Unilode has successfully worked with Cathay Pacific and OnAsset Intelligence trialling Bluetooth Low Energy (BLE) technology for end-to-end tracking in real time. BLE tags are fully embedded in the structure of the ULDs and their data can be captured automatically through a global interoperable reader infrastructure.

The BLE programme, constitutes a huge step forward in Unilode’s drive for a digital transformation of ULD management solutions.

Not all carriers go the whole nine yards of outsourcing ULD ownership, maintenance and management. Some, such as Singapore Airlines and International Airlines Group, keep the management in-house but are happy to let Unilode take care of their ULD repairs.

Air cargo: Unilode ULDs
Unilode is managing Korean’s ULDs

This is often complemented by comprehensive galley cart repair and maintenance programmes.

Digital decision making

For air cargo carriers, there are many factors converging to introduce new challenges to their logistical planning and operations. Changing customer expectations, new partnership definitions, and emerging competitors are all conspiring and requiring air cargo carriers to adapt to these new market dynamics.

INFORM, GmbH a German-based provider of optimisation software, helps airlines and airports improve planning and decision-making. The company’s ‘GroundStar’ is a comprehensive software suite for optimising aviation processes.

Speaking on the operational challenge faced by air cargo carriers and how a specific software solution can help them address the challenge and the benefits derived, it’s important to factor in that different cargo products may have different SLA (Service Level Agreement) limits by which the cargo shall be delivered to the aircraft according to Michael Reinkober, product manager, GS real time staff and equipment at INFORM, Aviation Division.

“It is important to create and allocate the necessary resources (e.g. dolly trains) in an optimised manner so that delivery of cargo is always in accordance with such SLAs,” he says. Additionally, time stamps must be recorded as proof and for subsequent auditing purposes.

INFORM’s GroundStar Software Suite provides a solution that automatically takes SLA limits into consideration when allocating tasks to resources. “Each action is also connected to a time stamp so that a detailed recording of activities performed can be guaranteed.”

One of the key challenges in today’s highly competitive air cargo industry is the optimal facilitation of staff and equipment.

Reinkober says INFORM uses modern algorithms in its GroundStar solution to automatically allocate tasks to staff and equipment along various parameters, such as availability, functional requirements, legal considerations and others.

“In a time where operations become extremely complex and limitations in the infrastructure are commonplace, it is important to continuously stay on top of the current situation. “

He continues saying INFORM’s GroundStar solution provides multiple features to improve situational awareness, even in the most stressful and confusing situations. “In such situations the built in optimiser takes care of most of the work so that the staff is able to focus on the critical tasks thus allowing management by exception.”

As cargo customers must cope with a tremendous growth of 5 per cent in terms of the number of express shipments per year, according to Reinkober, INFORM’s solution enables them to stay on top of this trend and to manage expansions.

“Through advanced atomisation, optimisation and focused decision support, cargo companies can increase productivity without additional staff.”

When comparing the situation before and after implementation, he indicates that INFORM’s cargo customers experience an increase in terms of dolly train utilisation of roughly 20 per cent.

Prior to the utilisation of the software, Reinkober says loading and cargo transport supervisors were not always able to utilise the full capacity of a tug and its dollies in order to meet SLAs and other timelines.

“However, after implementation the information about whether a tug driver has enough time to wait for another ULD to be collected or to leave the stand with only three ULDs instead of four for instance, becomes a strategic decision that is handled by INFORM’s software.”

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