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  • Writer's pictureTeam CargoTalk

Building blocks of the supply chain



While sustainability efforts may require additional investments, they are worthwhile for achieving long-term results. By following our action plan, we can manage costs, while simultaneously reducing our environmental impact.


- Abigail Mathias


Fabio Weiss, Vice President, Head, Air Freight, MEA, DHL Global Forwarding

In the dynamic world of air cargo, several crucial elements form the backbone of the supply chain. It starts with a well-connected and efficient transportation network that includes airports, airlines, and cargo carriers facilitating smooth goods movement by air.

Additionally, adequate infrastructure, including cargo handling facilities and storage areas support seamless operations, while logistics providers such as freight forwarders and integrators play a vital role in coordinating shipments. Technology systems such as tracking platforms and automated cargo handling equivpment streamline processes, ensure efficiency.



Compliance with international regulations and security measures ensures the safe and smooth flow of cargo, while upholding safety and security standards through rigorous screening and protocols remains of utmost importance. An adept and skilled workforce, equipped with logistics expertise and knowledge of customs procedures, plays a vital role in ensuring the efficient functioning of air cargo operations.Enhancing supply chain ops In the post-pandemic era, the supply chain has enhanced operations through various means. Digitalisation has seen a substantial boost, leading to improved connectivity between freight forwarders and customers. This advancement has facilitated seamless communication and collaboration, streamlining supply chain processes.


Companies have embraced remote work options, offering increased flexibility to their white-collar workforce. This approach not only enables employees to adapt to changing circumstances but serves as an attractive feature for attracting new talent.

The importance of visibility within the supply chain has grown following the effects of the pandemic. Recognizing the value of tracking and monitoring supply chain activities, the companies now prioritize providing transparency to mitigate risks.

Customers have adopted diversified sourcing models to spread risks encountered during COVID. This approach involves exploring new markets and creating alternative supply chain networks.


Stumbling blocks


It is worth noting there is currently sufficient capacity to handle the existing volume levels. The improvement in passenger travel has contributed to increased belly capacity, with global capacity being 14 per cent higher compared to the previous year. As a result, there are no significant backlogs or capacity constraints.


Sustainability also remains a major challenge within the air cargo industry. One approach to address this challenge is the use of SAF. SAF is considered a viable option to offset a portion of the emissions produced by aircraft.


Peter Kerins, Head, Global Accounts & Special Products, Etihad Cargo

While we have entered the post-COVID era, the lessons of the pandemic remain, and air cargo’s importance to the global supply chain was highlighted during this period. As air passenger traffic came to a halt, air cargo became the lifeblood of the supply chain, and carriers were called upon to keep supplies around the world moving.


During the pandemic, the supply chain industry witnessed an e-commerce boom, which started in 2019, and has seen increased demand for express logistics solutions. There has been a phenomenal global increase in online shopping and cross-border trade between e-commerce businesses. Etihad Cargo has identified e-commerce as a critical market for cargo growth, driving the carrier’s focus on building a portfolio of cargo products enabling smarter and faster management of air cargo. In e-commerce terms, Etihad Cargo’s air cargo services offer the speed consumers and businesses need and expect to answer the growing demand.

Etihad Cargo continues to play a crucial role in the global supply chain. We are committed to working with stakeholders across the supply chain to provide products that make the transportation of cargo across our global network as seamless as possible.


We witnessed an increase in demand for capacity, and as a result, we saw shippers and carriers focus on planning and scheduling. If we look back to last year, when sea freight rates were comparable to air cargo rates, it seemed rational to ferry products by air and get goods on shelves quicker. As the market stabilizes, are seeing a shift back to 2019 levels of rates and capacity. Etihad Cargo has continued to add depth to its global freighter network, now serving 13 destinations across the Middle East, Europe, the USA, Africa, and Asia, and add frequencies across key routes. It has also expanded its road feeder service network to support freighter operations and ensure seamless connectivity between online stations and offline stations.


Stumbling blocks


While the industry is taking strides in the right direction, a lack of digitalisation in the sector is still an obstacle. If we look at the passenger side of aviation, we see user-friendly solutions that offer great efficiency. The supply chain industry still has some way to catch up. That said, we are seeing signs that the industry is committed to digitalisation, with a lot of new technology firms entering the sector.



Supriya Salve, Partner, Vegat Logistics Services LLC, Dubai

The main building blocks of the supply chain for air cargo encompass various components that work together to ensure the efficient movement of goods. These building blocks include:

•Suppliers: Suppliers form the initial stage of the supply chain by providing the necessary raw materials or products to be transported by air. They can range from manufacturers, wholesalers, or distributors.


  • Transportation infrastructure: This refers to the infrastructure required for air cargo. It includes airports, cargo terminals, runways, aircraft, ground handling equipment, and navigation systems. They are crucial for the smooth flow of cargo.

  • Freight forwarders: the forwarders play a vital role in coordinating the transportation process. They manage the logistics, documentation, and customs procedures involved in shipping cargo by air.

  • Carriers: carriers, such as airlines and air cargo, are responsible for ferrying goods from one location to another. They provide the aircraft, crew, and capacity needed to move cargo. Carriers can be scheduled airlines, dedicated cargo airlines, or integrators such as FedEx or DHL.

  • Customs and regulatory authorities: customs agencies and regulatory bodies enforce the regulations related to global trade and cargo transportation. They ensure compliance with customs clearance, security checks, import/export regulations, and documentation needs.

  • Technology and communication systems: Advanced technology systems are essential for effective supply chain management. They include cargo tracking systems, electronic data interchange, inventory management software, and communication platforms.

  • Customers and end users: understanding customer demands, preferences, and requirements is crucial for planning and coordination throughout the air cargo supply chain.

In a post-Covid era, the supply chain has played an important role in enhancing operations in several ways. Here are some examples:

  • Resilience and risk management: COVID highlighted the importance of building resilient supply chains capable of adapting to disruptions. Businesses have re-evaluated their supply chain strategies, diversifying suppliers, and sourcing locations to mitigate risks.

  • Digitization and automation: COVID accelerated the adoption of digital technologies and automation in supply chain operations. The firms have implemented cloud-based platforms, digital tools, and analytics to improve visibility, collaboration, and decision-making.

  • Supply chain visibility and transparency: post-pandemic there has been a growing emphasis on end-to-end visibility and transparency within the supply chain. Organizations have implemented real-time tracking systems, IoT devices, and blockchain technology to gain better visibility into inventory, shipments, and overall supply chain activities.




Christos Spyrou, Founder & CEO, Neutral Air Partner

The main building blocks of the supply chain in air cargo logistics include:

Suppliers: These are the organizations or individuals that provide the goods and services required for air cargo transportation.

Carriers: These are the airlines or freight firms that ferry goods by air. They have their own fleet of aircraft and handle the movement of cargo from the origin to the destination.

Freight forwarders: These are intermediaries that coordinate the movement of goods on behalf of shippers. They handle the documentation, customs clearance, and ensure the smooth flow of cargo through the supply chain.

Airports: These are the physical infrastructure where the air cargo operations take place. Airports play a critical role in facilitating the handling, storage, and transfer of cargo between airlines, trucks, and other modes of transportation.

Technology and systems: The supply chain in air cargo relies on technology and systems for management and tracking. This includes software solutions for cargo management, warehouse management, and tracking systems to monitor the movement of goods.

Within the main building blocks are the stakeholders that are part and contribute to the main building blocks of the air cargo supply chain:

• Airlines

• Freight forwarders

• Airports

• Technology firms

• GSSAs

• Consolidators

• Express couriers

• Time-critical logistics providers

• e-commerce operators

• Handlers

• Suppliers and solutions providers

• Trade associations


Neutral Air Partner (NAP) members can ensure the smooth functioning of the supply chain.

Service providers: Within NAP, the role of our freight forwarders and logistics solution providers members is to connect shippers and carriers. They closely engage with suppliers, manufacturers, and shippers to ensure seamless transportation of goods by air.

Carrier partnerships: Collaborating with our NAP strategic carrier partners plays a crucial role in our members’ operations. Through these partnerships and our ‘NAP Airlines Partnership Program’ and ‘Global Incentive Agreements’, NAP members can collaborate with our strategic carrier partners and can leverage their expertise and access their transportation capacity.

Customer relationships: The NAP members prioritize building relationships with their customers. By leveraging the resources of the NAP network, our members can offer personalized services and customized solutions tailored to the specific needs of our clients.

Technology solutions: Our members embrace advanced technology and share knowledge in implementing solutions. By leveraging software, track and trace systems, and digital platforms, they enhance operations, streamline processes, and provide real-time visibility to customers.


Robert Harnan, Director, Supply Chain and External Manufacturing, Dronamics

Effective air cargo is defined by efficiency. The fundamental objective of utilizing the air cargo is to have faster shipping of a product at cost-effective rates. The main building blocks of the supply chain when it comes to air cargo and logistics are:


Digitization

The foundation of air cargo is the electronic systems that support tracking and movement of air cargo, from the generation of export documentation, right through to booking and billing systems. The goal is to have seamless and automated processes with as few human interactions as possible that delivers an effective solution for the customer.


Real-time tracking

Real-time tracking is an essential requirement to the customer, but it is important for operational effectiveness. From delivering data for efficiency improvements through to control of dangerous goods, the tracking system has a key part to play.

At each processing step, the electronic systems need to keep pace with the material movements, barcodes, and RFID tags in the airport. We are all used to seeing the progress of a consignment, while it is on the ground thanks to these systems. Air cargo is in high demand, more than ever before, tjhereby resulting in capacity and cost challenges. In remote locations away from major airports reliable and regular air cargo options still do not exist, equally unusual routes between major hubs are hard to establish until economically viable cargo volumes can be achieved. Air cargo’s impact is tied to tech in the aircraft carrying the consignment.


Unless the technology of the air cargo fleets can be improved, it will not see a notable improvement to its environmental credentials. This is why we at Dronamics are changing the way the world thinks about cargo. We are linking city to city, not major hub to a major hub, and we are doing it up to 80 per cent faster, 50 per cent cheaper and with up to 60 per cent lower emissions.


Material movements

To ensure transfer of materials from the sender to the recipient, it is crucial to start an effective receipt of goods at the airport logistics hub. This involves minimizing movements and reducing distances between the receipt area and aircraft.

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