Role of Information Technology and other Automation in Air Freight

Industry

Ca3 of HMT356

Submitted to:
Mr. Avinash Kumar Chauhan

Submitted by:
Ishita Sharma
11707055
QOM05
 Table of Contents

S.No. Particulars Remarks

1. Introduction
2. How Technology is Transforming Air Freight?
3. Role of IT in Air Freight Transportation Industry
4. ERP System for Freight Industry
5. CRM
6. Conclusion
 Introduction
Air freight is vital to social, cultural and economic development by providing the rapid movement of
millions of people and billions of dollars’ worth of goods to markets around the world. The air transport
industry includes the aircraft suppliers and operators, engine manufacturers, fuel suppliers, airport operators,
ground handling companies, air traffic control systems and security. Air transportation also plays a vital role
in facilitating economic growth.

The rapid growth of air freight in the past decade was made possible by advances in communications as
much as anything else. Coordinating the worldwide movement of time-sensitive freight, from business
documents to garments to fresh flowers, is a challenging and complex task.
Air cargo companies gain their competitive edge from technology innovation. They pioneered the generation
and use of large databases that can be queried at will to monitor each of the millions of items that a large air
freight company may have in transit at any moment. A vital part of the problem is to ensure that intermodal
communication is efficient (Air Transport Association 2002).

It is important for today's companies to keep their customers in hand, compete with other companies and to
reach the data of customers, rivals and suppliers as fast and properly as possible. In the same way, it is
important for them to minimize costs and save the necessary data. It has also become unavoidable to use IS
(Information System) supported by IT (Information Technology) to process this data. As the working
process is complicated in air freight industry, there is always a need for technology-based working. It is
necessary to
coordinate the process specific to air transport industry, from aircraft operations to transport security, also
from airport operation to baggage management, not only coordinating the traditional operational process.

The airline industry has changed radically during the 30 years due to deregulation and the advent of
information technologies. IT, including the internet, has provided a distribution channel linking airlines
more closely to their potential customers. Airlines have used many channels for selling their tickets.
Conventionally, they have sold their tickets by direct channels including their sales offices and call centers,
and indirect channels such as travel agents, tour operators, and consolidators. The use of the internet for
searching and purchasing airline tickets has become common in travel markets.
Thus, the use of Information Technologies and Systems in Airlines offers new alternatives. Airlines have
recognized the internet and IT, as sources for information dissemination and as a means of revenue
generating.
 How Technology is Transforming Air Freight?
With technology’s influence on the logistics sector growing, Supply Chain Digital examines the current state
of air freight and the impact of digitization. The effect that technology has had on industries all over the
world cannot be understated. Its influence is prevalent and has transformed the way in which companies
operate, as artificial intelligence (AI), automation and Big Data begin to take hold. The air freight industry is
certainly no exception. 

Due to the widespread adoption of technology, traditional air freight forwarders are under more pressure
than ever to digitize. This is primarily from three places: digital forwarding specialists providing solutions
for one or two elements of the value chain, digital forwarders offering a range of transport services and a
better customer experience at a low cost and, lastly, carriers building and improving their digital channels to
better serve customers. The air freight industry is on the verge of vast digital change, driven primarily by the
shifts in consumer and supplier demands. Air cargo companies are expected to deliver packages faster and
with more accuracy while keeping costs to a new competitive low. Technology is helping to transform
freight forwarding in several different ways, from robotics and automated systems to augmented reality,
drones, Big Data. Many processes in the freight-forwarding industry remain very inefficient and traditional
LSPs are struggling to, or failing to, innovate. The shippers, their clients, are still heavily reliant on emails,
phone calls and Excel spreadsheets to run their logistics procurement processes. It’s estimated that currently
less than 10% of the logistics industry uses electronic procurement and just 1% of worldwide freight volume
is purchased digitally.

Spencer Davern, Director of Air and Ocean at Rhenus Logistics UK believes the air freight industry is going
through a period of modernization, with digitization leading the way. Many who work in the logistics
industry will have experienced the painful hours spent in line at airport sheds during peak times, waiting to
collect or deliver cargo shipments. But due to technological advancements and the fast-paced nature in
which the logistics industry adapts, this no longer has to be the case. Through the implementation of E-
AWB (electronic Air Waybill), the logistics industry has seen significant improvements in efficiency.
Removing the need for paper documentation has proven instrumental in streamlining the process of handling
air cargo shipments. In addition to this, E-AWB enables information to be provided electronically to the
airline before delivery, with some forwarders able to book in their E-AWB shipments using a smartphone
direct to the carrier's warehouse shed without the need for queuing at reception. This new process ensures
that cargo shipments are processed in the most efficient manner, saving not only time and money but also
the environment.
 Role of IT in Air Freight Transportation Industry
The freight transportation industry uses IT in several ways:

 Backroom management and integration: Companies use a range of general-purpose business

applications to manage internal processes and to link them by sharing information internally and with
suppliers and customers.

 Mobile communications and tracking: To keep track of the locations of trailers, trucks, airplanes, rail
cars, and other mobile assets and their contents, companies use everything from bar codes to Global
Positioning System (GPS) receivers.

 Internet applications: The Internet plays a growing role for all freight companies. Electronic
commerce of all kinds uses the Internet because of its wide accessibility and its flexibility in
allowing companies to link various kinds of Web, client-server, and legacy systems. These properties
make it easier for companies to develop distributed applications that can exchange various types of
formatted data.

 Matching a load with a carrier: The cargo owner, or shipper, must identify and engage a carrier—
truck, train, ship, air, or a combination of modes. Freight brokers, agents, and freight forwarders may
be involved in this task. The technology involved can span the range from telephone and fax on the
low end to Internet-based load bidding. If a multimodal shipment is involved, the shipper or broker
(agent) will either have to arrange each leg of the trip or request a carrier to arrange the entire
intermodal movement.

 Pickup confirmation, en route tracking, and delivery confirmation: Shippers and freight companies
often desire to track the progress of their shipments. A variety of processes and technologies
depending on the transportation modes can be used for this purpose, including GPS satellites, digital
or analog wireless telephones, and bar code scanning. Some carriers use all of these devices, so
customers may monitor the locations of their shipments in near real time by using the Internet.

 Transmitting shipping documentation: Paper documents are traditional here, but many carriers use
electronic communications like the Internet and electronic data interchange (EDI).
 ERP System for Freight Industry
ERP or also known as enterprise resource planning is a software that helps in the integration of all
departments of a particular company while still carrying out the necessary processes and functions of each
department efficiently. Its primary goal is to provide smarter decisions and automate most of the procedure
and steps that might seem to be a drawback in the way the company works.
The concept of ERP systems brought an evolutionary change in freight forwarding Industry, in which all the
freight forwarding processes are integrated together and they execute in a sequential manner to generate
accurate output with in a fraction of a time.

An ERP for freight program when implemented in the world of freight forwarding will have a plethora of
advantages which is entitled below:

 Integration of delivery tools and management planning: ERP for logistics industry allows various
departments to be integrated onto one platform; thus, when you combine all means of delivery tools
that your freight forwarding company has to offer, the customer has options to choose from to decide
which mode of shipment they would like. Also managing the company gets relatively
straightforward and comfortable because there is no need for the involvement of individuals in terms
of communication. As e-mails and text, messages are directly sent to the relative person. The most
important aspect is, freight management software helps streamline supply chain operations, simplify
the shipping process and increase logistical efficiency.

 Communication features: ERP system for the freight forwarding industry is exclusively designed in
such a manner that there are dynamic interactions between the company and the customer. There are
several means of communications such as chatbots, emails, and even direct messages. Thus,
entrusting people to trust your services and digitalizing such methods of communication boosts
productivity and growth in return.

 Customer database and other services: The relevant logistics ERP software is designed keeping the
logistical side of things in mind. You can find all your customer details along with their contact
numbers and other means of social media handles, etc. the traditional form of freight forwarding
cannot maintain such options. ERP system for freight forwarding business also allows easy access to
data in knowing the time of arrival of a shipment, continuous deliveries, generation of invoices,
uploading of documents, etc. 

Therefore, such advantages in the realm of Freight forwarding software can help in ensuring that logistical
companies have an edge in giving back to their customers in the best way possible.
 CRM
CRM stands for Customer Relationship Management. The CRM module in a distribution ERP system will
help strengthen customer relations and gauge customer expectations and experience with the logistics
services. Multiple channels of customer touch-points like e-mails, feedback, grievances, ticketing system,
auto-reminders for a callback, etc. can be integrated with an ERP system in logistics to render results that
help leverage customer satisfaction. Social media metrics and posts analysis are the key capabilities of this
ERP module.
A successful CRM program includes:
 Well-developed customer strategy
 In depth analysis of potential customers
 Efficiently usage of appropriate software and Call Centre
Also, CRM helps Freight Forwarding Agents in the following ways: -
 Maximize the quality of customer service
 Increasing revenues
 Enhancing customer loyalty
 Strengthening marketing and sales
 Boosting Forward Agent image
 Conclusion
Technology adoption for air cargo management is also on the rise with freight forwarders, integrators and
airports. More and more airports are requiring ground handlers and providers to make reservations of slots
on digital platforms, thereby boosting efficiency, optimizing costs and carbon footprints through heightened
visibility and effective data-sharing. Air Cargo software eased many airports’ cargo management with its
advanced ticketing, web-based booking, and tracking methods.
 
At the level of regulatory initiatives, IATA in 2018 declared that the electronic air waybill (e-AWB) will
become the default contract of carriage for all air cargo shipments on enabled trade lanes, with effect from
January 1, 2019.
 
The global air cargo industry is a sunrise sector. Each day tons of cargo moves through air routes. The
volume of air cargo being moved globally is ever-increasing and airports find it difficult to keep pace with
expansion in terms of infrastructure, workforce and level of automation.