The significant influence of Digitalization on the Logistics Industry

The significant influence of Digitalization on the Logistics Industry

SPOTLIGHT: The significant influence of Digitalization on the Logistics Industry

Afzal Malbarwala, President of The Air Cargo Agents Association of India (ACAAI) strongly believes that success is the product of competitiveness and high standards of quality. He talks in this interview about the many challenges faced by the freight forwarders and how their roles have evolved over a period of time.

 

For more than five-decade ACAAI has been safeguarding the interest of the Air Cargo Industry. Can you elaborate on how ACAAI has made a difference to the Air Cargo industry?

ACAAI is the oldest Association in the Indian logistics ecosystem. For more than five decades, ACAAI affiliated and recognized by not only the Indian government but also by international bodies. ACAAI promotes growth, development, and professionalism in the Indian air cargo industry.

 

The Association provides a consistent medium for dialogue with the members’ principals, the airlines, their customers, the exporters and importers, and various Government departments and authorities. Therefore, becoming the voice of the industry.

ACAAI plays a crucial role in Exim trade of the country and coordinates with bodies like FASSAI, ADC, Export inspection agency, Plant and Animal Quarantine, wildlife controller, etc. The Association conducts and engages in seminars to address and contribute to bringing change in the industry.

 

What according to you is the biggest challenge faced by the Indian Freight forwarders in these critical times?

Though air freight has always played second fiddle to the ocean freight industry. During the pandemic, it became the most important mode of transporting essential commodities like pharmaceuticals, vaccines, medicines, various perishable and non-perishable food products, etc which would have been impossible without an efficient air freight service.

 

Even though Freight forwarders pride themselves on being the most versatile part of the supply chain. However, there are a few critical questions glaring at the industry today; like, how will capacities get allocated, how affordable will air freight rates be available to the shippers, will there be enough infrastructure support on the ground accessible in terms of surface transport, cargo storage, man-power supply, etc.

We understand forwarders will need to be in a state of preparedness to decongest as swiftly as possible as the warehouses are piling. Freight forwarders need to exercise extreme caution in financing their customers moving ahead as the cost of doing business is high, and forwarders might need to realign their charges.

 

Sustainability is another factor quickly garnishing attention worldwide, given the rate of global climate change. We’ve already seen an uptick in awareness and investments during 2021 freight forwarders will need to show their commitment to reducing their carbon footprint.

 

Agility and the ability to adapt to demanding circumstances remains the strongest attribute for freight forwarders. How do you think technology enhances the operations and efficiency Air Cargo Industry?

Technology is the buzz world globally today. Its influence on the logistics industry is phenomenal; artificial intelligence (AI), automation, and Big Data transformed are the new normal of the logistics industry. The air freight industry is certainly no exception. 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.

 

Certain processes in the freight-forwarding industry have remained inefficient and traditional. Several people from the logistics industry must have experienced the painful hours spent in line at airport sheds during peak times, waiting to collect or deliver cargo shipments. Due to the rapid technology implementation, this no longer has to be the case. Consequently, the implementation of e- AWB (electronic Air Waybill) has led to the logistics industry seeing significant improvements in its efficiency.

 

Paperless documentation has not only helped the environment but has proven instrumental in streamlining the process of handling air cargo shipments. E-DO services have ensured reduced dwell time in the clearance process, paperless & contactless trade, faster revenue reconciliation, secured as well as authorized transactions.

 

Electronic Certificate of Origin (e-CoO) is another service made available by the Chamber of Commerce to enable Exporter/Freight Forwarder/Customs Brokers processing of the online Certificate of Origin. It automates the final step for export documentation and reduces administrative time and cost.

 

Today, the customers demand more visibility and want to track their orders in real-time. Technology enables such expectations to be met by the freight forwarder that ultimately means; a more fulfilling delivery experience and return business. Hence, technology adoption is the way to not only streamline as well as to make it a profitable industry.

 

TIACA is issuing a warning that the industry is facing unprecedented challenges to deal with expected fourth-quarter demand for air cargo services. What are your thoughts on it?

As the cargo inflow increases, the stress on the system expects to grow. States are encouraged to work with industry representatives to identify potential system blockages and address them before they further impact supply chains.

 

The air cargo industry is compelling governments and stakeholders to be ready for the challenges expected by the air freight during the peak season. The port congestion, delays, and the rising costs of sea freight are driving desperate shippers to air freight, TIACA said, that combined with online shopping events, as well as the traditional peak, “the stress on the system is expected to grow.”

 

To triumph over this challenge, the essential part is planning and communication. The past year and a half have been very challenging, and the industry stood with its innovative, agile, and flexible approach. Now we have to rise proactively to the new challenge as customer expectations have risen.