Ask anyone what express delivery means and they’d probably say ‘faster than usual’. Trouble is, what today’s consumers consider ‘usual’ is exceptionally fast compared to just a few years ago. And those expectations just keep on rising.
So maybe it’s no surprise that the express air freight market is transforming rapidly.
Despite the recent upheaval in international trade due to COVID-19, a quick glance at the air cargo news reveals more than a sprinkling of positive reports: new 767F orders for Boeing, DHL Express expanding in the USA and launching new direct cargo routes, and the firming up of plans for a huge air cargo hub in Jiaxing are just a couple of examples.
It’s an exciting time for the industry, so at VRR, we’ve decided to take a look at what’s driving this transformation. In this article, we’re focusing on the issue of speed.
Increasing demand for choice plus speedy, guaranteed delivery dates
It’s true. What most of us considered express a few years ago is simply standard today. A Deloitte survey found that 63% of consumers considered fast delivery to be within 3-4 days back in 2015. Just a year later, that number had fallen to 42%.
Think consumers are expecting too much from retailers and, as a result, express shippers?
Fast forward to 2019, when Oracle Retail surveyed almost 16,000 consumers across the globe. They discovered that, when ordering goods online, around 90% look for free one-day delivery by whatever means is fastest.
No pressure then…
But it’s not just speed that’s a factor when it comes to express deliveries. Consumers also want flexibility and reliability.
Around 86% of consumers think retailers should offer the most convenient delivery option at the time of ordering, while 13% would never order from a retailer again if their delivery arrived late. In other words, retailers have to offer as much choice as possible and deliver the goods exactly when they say they will.
The upshot of such demanding consumer behaviour is that businesses—no matter what sector they’re in—want speed, flexibility and reliability from their carriers.
Of course, much of what we consume these days is transported as air cargo. So, what is the express air freight industry doing in 2020 to help speed up the delivery process?
1. Offering new air freight delivery services
It used to be just express, standard or deferred. But take a look at the website of any integrated or all-cargo carrier and you’ll now see a complete range of express delivery services: international-first, international-priority, overnight, priority overnight, and standard overnight. And all these are offered by just FedEx.
The major integrated carriers are even dabbling in international same-day delivery with a next-available flight service. This offers to get most shipments to their destination (in most areas) within 24 hours.
The range in urgent and time-definite deliveries is impressive. One wonders what will come after next-available flight. Instantaneous transportation maybe?
2. Providing new air freight delivery routes
Every time you check the news, it seems another express shipment route has been launched. Sending a package to China? DHL is now offering to deliver a parcel from the UK to China in just two days. Want delivery on Saturday? UPS has launched a service enabling deliveries on Saturdays to its top European e-commerce markets.
Both DHL and UPS are expanding considerably their urgent and time-definite shipment routes. UPS recently added five countries to its mail and parcel network and eleven countries to its freight network.
DHL has set up weekly freighter flights to the UK’s East Midlands airport from Los Angeles, Miami, New York and (via Moscow) Hong Kong in just the last few months. And since 2019, it’s added four B767-300s and 14 B777Fs as part of its efforts to continue modernising and growing its fleet.
Not to be outdone by its Western competitors, China’s leading logistics service provider SF Express added eight international routes in 2019. And so far in 2020, it has successfully launched or resumed 13 international air freight routes. Its direct air freight network now reaches into Central and South Asia as well as Europe.
Retailers are getting in on the act, too. Take Banggood, which provides B2C cross-border e-commerce. Just this summer it launched Banggood Express, a dedicated air freight route between China and Europe and the USA for the retailer.
It would seem that, despite the recent major disruption to traditional global trade routes, the industry’s optimism in e-commerce’s long-term growth has been barely dented.
3. Digitising air freight processes
Until recently, digitisation centred largely around e-forms. They certainly help to expedite the laborious form-filling procedures that go hand in hand with exporting and importing. But are they anything more than digital versions of their paper predecessors?
Surely the real change to the air freight industry will come from digitising core business processes. And it’s already happening.
Air cargo online booking portals are a case in point. They provide real-time connectivity, live market rates and instant booking confirmations. By eliminating the need to send emails and wait for replies, both airlines and freight forwarders can speed up their procedures dramatically.
Use of this young technology has really picked up in the last year, although it was pushed to its limit during the peak of the pandemic. But Freightos chief marketing officer Eytan Buchman thinks that COVID-19 has helped prove the value of e-booking and pushed airlines and freight forwarders that weren’t already using it to get on board.
Cargo management is another key area that digitisation is helping to speed up. The weight and balance solution designed by CHAMP Cargosystems is a great example. It not only makes aircraft loading much more efficient but also cuts costs and maximises available space, making the life of loadmasters a great deal easier. The company boasts that its system, which integrates with existing IT systems, can plan an entire aircraft load in just seconds.
As in most walks of life, digitisation is starting to make a huge impact in the express air freight market, and booking portals and the weight & balance system are just two examples. Adoption of digitisation may still be patchy, but there’s no doubt that it’s gaining traction and steadily being incorporated into everyday operations.
4. Automating freight handling and warehouse management
This year, Thai air freight operator Bangkok Flight Services (BFS) introduced their latest innovation: automatic volume scanners. These laser scanning systems display three-dimensional information of the cargo (length, width and weight) going through its receiving process.
According to Suwannawut Jamnongsart, Cargo Export Manager for BFS, the process is up to two times faster than the old manual system and much more accurate. The company is now developing an autonomous ULD transporting system that eliminates the need for human touch. It’s faster but also safer because it ensures the ULDs never bump into each other.
On the other side of the world, Erik de Jonge, Market Strategy Manager at Vanderlande in the Netherlands, estimates that the warehouse automation market has doubled in the past five years. Solutions such as robotic palletisers and robotic parcel sorting and packing are starting to become more common in large fulfilment centres. Driving this is the rise in e-commerce and the increased demand for next-day or two-day shipments.
Finding efficiency gains and cost savings in freight handling is more important than ever, and automated processes can provide both. Do Dutch employees see automation as a threat? De Jonge says not. They may not be needed as much for picking and packing, but they know they’re still needed for other valuable jobs within the warehouse.
These recent advancements (and many others) in automation are spurring the upgrade of older air cargo hubs and the building of new modern terminals. By incorporating the latest intelligent cargo and warehouse management systems, they’re increasing significantly their speed and efficiency.
5. Improving the efficiency of Unit Load Devices
At least once during the express cargo’s journey it has to be loaded on and off a plane. Loading and unloading is a complicated business, especially if the cargo is sensitive or hazardous. And it has to be done quickly and in adherence to strict industry-wide safety procedures. Incorrectly securing or positioning loads, exceeding weight and balance limits, and loading unauthorised items, for example, can have serious consequences for the plane during flight and take-off and landing.
The potential for bottlenecks during loading and unloading is high, and airlines are always keen to optimize the process to speed up a plane’s turnaround time. The typical turnaround for a large wide-bodied passenger aircraft is around 90 to 120 minutes; for freighter planes, which don’t have passengers to contend with but may have much more (difficult) cargo to move, it’s between 45 minutes and two hours on average. But whether it’s a passenger or a freight plane, every minute counts.
Minimising the loading effort of the ground handlers is obviously a key element. Unit Load Devices (ULDs) are perfect for this. According to ISO, the purpose of a ULD is to facilitate rapid loading and unloading of aircraft. Most express cargo is transported in ULDs that are specifically designed for fast and efficient use, such as the AAX, the AMV and the AMX. These containers not only protect the cargo but also provide full utilisation and ease of use.
At VRR, our “We Keep It Efficient” series of ULDs is designed to make the ground-handler’s work much more efficient and, therefore, much faster. Super-sized door entrances and precisely-calculated interior dimensions maximise the amount of cargo that can be stored in one container and minimise the time it takes ground-handlers to access and close the ULDs.
This year VRR will be launching a new addition to the “We Keep It Efficient” series. The new and improved AAX promises to make loading and unloading cargo even faster. The most obvious change to this main-deck container is the replacement of the cover/net combination with a roll-up door. Ground workers will now have fewer steps to complete. Instead of manipulating the cover and buckling and unbuckling six straps, all they have to do is roll the door up or down. It’s not only faster but also simpler, so less can go wrong during a turnaround.
As we’ve discovered, there’s an awful lot going on across the air cargo industry to speed up its processes and keep customers and consumers satisfied. One thing’s for sure, it’s certainly motivating to be working in such an innovative and forward-looking industry.
If you’d like to know more about the AAX ahead of the launch, just contact VRR.