Unlocking new value-added services for carriers: the next step in digitalization for the air cargo industry

Customer demand for the air cargo market has continued to show strong growth, rising for the fourth consecutive month. According to data released for May 2024 by the International Air Transport Association (IATA), total cargo tonne-kilometres (CTKs) has risen by 14.7% compared to May 2023 levels, marking the sixth consecutive month of double-digit year-on-year growth. 

Airlines operate in an ultra-competitive and dynamic environment, where systems and processes need to be able to accommodate the substantial opportunities and challenges brought about by the ongoing digitalization of the industry. Customers demand greater agility, and this presents an opportunity for airlines who are equipped to respond. 

This includes changes in distribution methods, such as eBookings, and the upcoming changes in processes and technology required to support IATA’s ONE Record data exchange standard. All this is happening while airlines strive to balance the need to put capacity into the market to meet (but not exceed) demand, while considering the impact and cost of running under-utilized aircraft. 

With no sign of air freight demand easing, digitalization must remain a top priority. Customers now expect transparency of data across the entire supply chain, meaning airlines cannot rely on disjointed manual processes.  

Establishing a global standard for the air cargo industry involves creating a supply chain where data sharing is secure, visible, accurate, timely and relevant for end-to-end collaboration. 

Taking digitalization to the next level  

As it stands, the air cargo industry has made significant moves towards digital integration in recent years. IATA’s e-freight initiative marked a significant shift towards digitalization by establishing an end-to-end paperless transportation process for air cargo through a regulatory framework, electronic messages, and high-quality data. 

The next step is IATA’s ONE Record, which goes beyond traditional EDI and messaging technologies. One Record is a standard for data sharing that creates a single record view of the shipment. This standard defines a common data model for data shared via standardized and secured web APIs, breaking down data silos along the transport chain and simplifying collaboration across company boundaries. 

For airlines and forwarders, this means introducing new processes for sharing operationally critical data across the industry and developing the technical capabilities needed to support this shift. ONE Record will place higher emphasis on shipment records (what we refer to as Air Waybills today) and tracking, moving towards a more open data standard. This can be achieved by building APIs, decreasing restrictions, and increasing flexibility. 

Benefits include reducing the complexity of data flow, widening the scope of existing data elements, reducing instances of missing or lost data, and lowering costs. 

Most importantly, this shift means increased data integrity, serving as a single source of truth. This will lead to significant efficiency gains through earlier data sharing and improved operations and revenue planning, ultimately enhancing the overall effectiveness of air cargo operations and providing the potential to reduce transit times. 

Unlock new value-added opportunities  

Airlines are prioritizing digitalization in several key areas. First, is a shift in distribution methods. By utilizing eBookings and online options, airlines can reach a wider audience and optimize processes, allowing customers to send queries and receive responses in real-time, expanding global capacity usage and maximizing profits. 

In addition, revenue management will become essential to get ahead of a volatile cargo market. Airlines that do not have a robust commercial and revenue management strategy may lose out as they see their yields diminish faster than competitors who are more responsive and agile. 

Investment in digital tools that monitor supply and demand, leverage data for decision-making, and break down internal silos to streamline booking processes will be essential. 

Underpinning all of this, is the need to ensure systems are equipped to support the upcoming industry changes that will result from technology initiatives such as ONE Record.  

Future ONE Record use cases will include shipment records, accompanying documents, special cargo, checklists, and other planning data to increase visibility and help cargo handlers plan and manage workload. This will ultimately drive new value-added services and business models for the industry as a whole. 

Installing efficient logistics processes is no longer a challenge  

With digitalization remaining a top priority, deeply integrated logistics platforms offer a unified and streamlined approach to air cargo data.  

CargoWise’s AirlineConnect empowers airlines to distribute their capacity to  a vast global network of air cargo buyers. This platform provides direct access to real-time airline communication, dynamic pricing, available cargo capacity, accurate flight information, transparent visibility of airline charges, eBooking capabilities, and automatic status updates—all without leaving the platform. This comprehensive solution meets the demands of freight forwarders striving for enhanced operational efficiencies. 

Built to evolve with global regulatory changes with speed and accuracy, whether it’s new data entry rules, sanctions or embargo lifts, CargoWise partners with industry associations like IATA to transform and implement new standards for air cargo data.  

In the ever-changing air cargo logistics landscape, precision, efficiency, and compliance are essential. CargoWise equips forwarders to navigate complexities, seize growth opportunities, and stay competitive. 

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