27 July 2021
Founder and President
The modern logistics industry is like a circulatory system. We don’t regard an optimization process as separate from a business, rather as a combination of the different streams of money, people, goods and services. Today, we live in a world that has adopted the notion of delivering goods when and where a client wishes.
The air cargo sector is an integral part of the logistics industry. From pick-up to delivery, the air shipping process is quite straightforward. It can begin with a private individual or a major manufacturer with any product they wish to ship. Shippers (person or company supplying the goods that are shipped) have the option of taking an item directly to a carrier or of using third-party logistics providers (usually a freight forwarder) to find the best shipping possibilities and to ensure that all the arrangements are made.
Air transportation is a critical part of operating an efficient supply chain, both domestically and internationally. When a company prioritizes speed without delay (compared with shipping by sea), the primary transport option is air shipping. For example, medical and agricultural cargo must be shipped rapidly and efficiently.
Airfreight transportation is a complex process that can involve much paperwork. There is no room for mistakes that could cause long delays, as well as huge financial costs. A pertinent example can be seen from the past year of COVID-19 during which air freight transport was essential for the pharmaceutical companies. They had to ensure temperature-sensitive immunizations could be delivered worldwide in a safe and swift manner.
There are several ways in which goods can be shipped. Air cargo carriers provide various services according to customer demand. Integrated express carriers such as FedEx, UPS and DHL operate a large fleet of scheduled aircraft, trucks and couriers for door-to-door service. However, it should be noted that their system caters to only a minor part of the air freight market.
Most international shipping is consolidated, a method that combines several different LTL (less than load) shipments from various shippers into a single full container. A freight forwarder also may choose to ship products individually and immediately whenever an order comes through, though consolidated shipping is the most cost-efficient. Domestic shipments are typically unloaded at the destination airport and are then picked up and delivered to the consignee by truck.
In one of our previous blogs, Optimization of transportation in ports, we discussed the amount of time trucks spend in the terminal area from the moment cargo arrives until it is shipped out. We outlined the main problems that are connected to security measures and how to make the process more efficient.
Regarding international shipments, we need to add a few players (as opposed to domestic):
*CUSTOMS OFFICIALS (inspect shipments in the destination country);
*CUSTOMS BROKER (or IMPORTER, work with government agencies to clear cargo for entry into a country);
*CONSIGNEE (a buyer who receives the shipment after it is cleared to enter a country, before shipments are separated for individual customers/consignees and delivered by truck).
In the simple model, the movement of cargo from A to B by air includes a few steps:
Sounds easy? Maybe, however, this process has many pitfalls. A typical route is divided into 4 main parts:
In each component there is a human factor and many vehicles that take care of cargo. Even in the beginning stages, when a cargo owner passes the goods to a forwarder, the commodities must be packed precisely according to the type of delivery; in addition, appropriate documentation must be provided.
Security restrictions exist in all airports to prevent dangerous goods from entering aircraft. Every shipping company should be aware of the regulations that apply for x-ray machine security screenings in an airport. “Known cargo” refers to a consignment for which the appropriate security controls have been applied; Known Consignors are those people who must maintain a high level of security to ensure cargo is safe to load on to an aircraft. After a shipment has cleared customs, the cargo is then further transported to the aircraft.
A significant effect of the COVID-19 pandemic was that many companies were forced to think about and adapt new ways to transfer goods across the world. The crisis highlighted the air cargo sector and the urgent need for sustainable digital adaptation, in order to establish collaborative business models.
The steps mentioned above require a high level of transparency. This includes real-time tracking of geolocation as well as information about the consignment, for example when transporting medical and food supplies.
One platform! We believe the logistics solution lies in transitioning from individual software development to complex platform solutions; a single application that connects customers, shippers and carriers in one central place. Integration into one system will increase visibility of the entire process, resulting in more reliable and efficient cargo delivery. Applying a single platform would increase optimization of fleets involved in airport delivery (on route during rush hour and internal airport traffic). Such a model encourages sustainable behavior and also can reduce security concerns due to real-time visibility (a truck’s location can be viewed at all times). Efficient routing will result in fewer trucks on the way to the airport that will require security checks.
Paperless! The continual development of paperless technologies for transporting goods internationally will heighten the pace of processes, such as customs control at borders. This can be achieved through close cooperation between carriers and tax authorities based on an integrated digital network with electronic legal documents, among others. In some cases, air cargo paper documentation is shipped separately from the cargo via express couriers; this can cause significant delay and extra costs in many cases.
Another effect of COVID-19 was to reduce the actual need to touch paper documents that had just been touched by others. Electronic documents such as Air Waybill (AWB), an air consignment note, provide detailed information about a shipment and allow it to be tracked, without having to touch any documents.
Trucknet, a sharing economy model, recognizes the value in optimization of air freight deliveries. We believe that the best way to achieve “next day delivery” and to meet customer demand is to take advantage of available multimodal transport and integration platform services. The compact ecosystem of partners allows us to exchange information immediately, through digital software that offers freight forwarders e-booking and visibility at all times.
“When you need to innovate, you need collaboration.”
– Marissa Mayer, American businesswoman and investor, creator of Sunshine, platform based on artificial intelligence