Online retailers live by Dynamic Pricing, the ability to adjust pricing along various business, customer, and market factors in real-time. Yet, while Dynamic Pricing permeates our daily online lives, it remains untapped in air cargo.
It's a massive opportunity for cargo airlines to increase sales and optimize revenues and capacity utilization while aligning more granularly with a customer's willingness to pay.
Most air cargo carriers are unable to attain the full business potential of their partnerships with other airlines, ground handlers, freight forwarders, and digital marketplaces. Today´s legacy industry messaging standards and systems limit the breadth and depth of interactions value chain stakeholders can have throughout the shipment lifecycle. From sales enquiries to cargo drop-off and detailed handling instructions clarifications, most processes still require copious and inefficient manual and offline exchanges.
Experimentation is the precursor to the widespread adoption of new technologies and their innovative applications across industries. Advances in blockchain and the Internet of Things (IoT) are generating synergies between the two and are set to transform the air cargo landscape.
Air cargo connects the world, and it has done so impressively well for decades. Yet, evolving customer expectations are accelerating the need for change in the industry. Technology is advancing at a fast pace in other sectors, which creates a precedent for air cargo that has been slow to adopt modern technologies. The industry´s continued reliance on legacy systems and architectures leaves a raft of benefits off the table.
Air cargo is a highly volatile business. External factors such as trade policy, consumer sentiment, global events like economic recessions, spreading of communicable diseases, and socio-political situations have an immediate impact on air cargo.
The air freight business has always been challenged by the very operating model of the business. A significant share of global air cargo is ferried in the available belly space of passenger aircraft. Large scale commoditization of the offering has led to diminishing yields – even while costs continue to rise. There is a significant opportunity for cargo carriers and GHAs to derive higher returns from their cargo product by focussing on differentiated offerings and an elevated customer service that goes along with it. “Special Cargo” is the smart way to productize the air cargo service such that it is tailored to meet specific needs of specific markets.
The COVID-19 pandemic has proven that it’s important for air cargo companies to adapt quickly, especially when market conditions, regulations, and customer priorities suddenly change—both to tide over future crises and to focus on long-term growth. For this, they require smart, digital tools to succeed.
