Well here we go again… high tech gadget launches by Apple, Samsung, Sony and others are once again bringing momentary cheer to the air cargo sector. With so much excess capacity in the market, picking up some of this gadget cargo translates into welcome relief for many carriers. But as the carriers themselves know all too well, this bonanza is nothing but a temporary blip on the radar and indeed a blip that is getting ever shorter with each passing year.
More efficient supply chain planning and crucially, that old ocean freight bogeyman that has become vastly more efficient in recent years, continues to erode volumes. Even the sacrosanct iPhones and iPads now transition out of air freight to slower but vastly cheaper ocean freight once the initial surge of demand has been satiated after a few months, if even that long.
But as it has so often been highlighted, the industry simply cannot and should not rely on this single commodity to fill its aircraft and boost its earnings. And while high tech goods remain an important airfreight commodity at least for the short, to medium term, a great many freight forwarders and carriers are working towards a portfolio of customers that represent a wider range of industries. This includes a push by a number of carriers into high-value goods, perishables and pharmaceuticals – all helping to both diversify the business and bring in higher yield cargo.
At many industry forums over the last couple of years there has been a growing call and debate over the need for a new business paradigm based around focusing on not only the core attributes of efficient, secure and fast movement of cargo, but through greater value adding. As Jeff McCorstin, UPS Asia Pacific’s freight forwarding head told me in a recent conversation, if you are a carrier you “can’t just be a port-to-port transactional commodity. You have to move up and down the supply chain with your customer to actually provide value. If you are an ocean or air carrier you have to reinvent yourself,” he argued.
This is clearly going to be even more important going forward as global economic volatility, rising fuel prices and intensifying competition are here to stay. In short, the wolves are (still) at the door – modal shift, near shoring, on shoring and so on – aren’t going to go away, in fact their pack is simply becoming larger, more diverse, smarter and hungrier. But in adversity and challenge, the most successful companies find innovation and opportunity. This month’s cover story highlights exactly that issue – it’s a bit of a ‘shot across the bow’ if you will and highlights the rapidly emerging manufacturing technology known as 3D Printing. For supply chain experts, freight forwarders and air cargo carriers to ignore it, or worse still deride it as hobbyists’ folly, is surely to invite disaster.
The clever companies will already be keeping a close eye on developments in 3D Printing and developing strategies, not to survive the far-reaching impact it will surely have on global supply chains, but developing innovative strategies to facilitate and tap the changing patterns. The fact this technological development has been called not only the most significant manufacturing development since the adoption of the assembly line, but nothing less than a Third Industrial Revolution, means no one should, or can afford to underestimate the transformational impact it will have on their business in the coming years.
I end with the words of Oliver Evans, Swiss WorldCargo boss and TIACA chief: “It is simple: The less we invent and transform, the more we will lose our competitive edge in terms of speed, reliability and security – and the harder it will become to attract future customers, except for the ones who have emergency cargo or the highest value goods. And the process is already under way as we all know, accelerated by the economic downturn of recent years but inevitable nonetheless, even in better times.” Food for thought, as unpalatable as it might be.
