Cargo to open doors to change by 2020

IoT and voice AI-enabled smart devices and systems, warehouse drones and strategic alliances between airlines and distributors will be key to the air freight industry capitalising on the e-commerce market, says Venkatesh Pazhyanur, Senior Industry Directo

The cargo industry needs to embrace disruptive technologies from the consumer world, including Internet of Things (IoT), digital assistants and drones, to increase efficiency and meet customer expectation for greater transparency throughout the supply chain. The Asia Pacific air cargo industry is experiencing growth and transformation driven by rapidly increasing capacity supply on passenger flights, and the shift to businessto-consumer small parcel shipments as a result of e-commerce. Growing passenger demand will increase the number of passenger flights and add to cargo capacity supply.

The International Air Transport Association (IATA) expects the number of air passengers globally will almost double between 2016 and 2035, with the greatest growth in Asia Pacific – particularly in China and India. Simultaneously, the popularity of e-commerce is changing the nature of cargo shipments, incrementally increasing the number of small parcels – which is predicted to grow five per cent annually in mature markets and 17 per cent annually in China. Potential in innovation

At Unisys we predict these market pressures will bring innovation in three areas in the cargo supply chain: smart warehouses will become even smarter, drones will finally take off in the cargo supply chain – but inside the warehouse, and new alliances between airlines and global distributors will enable longer term capacity management. Much of the underlying technologies are already being used in other sectors – including the consumer world.

But now, more than ever, cargo operators will be forced to embrace such innovation to be more efficient, nimble and proactive in an increasingly competitive and price conscious market. As per Unisys cargo experts, the following predictions will become reality within the next five years or less:

Smart warehouses, a reality

To meet the growing demand for small parcel deliveries, warehouses will transform from a storage location, to a dynamic facility using IoT and voice artificial Intelligence (voice AI) enabling faster processing of more shipments to generate a higher return on the realestate investment. Just as connected wearable devices such as smartwatches are becoming mainstream in the consumer world, IoT-based technology will create the ‘smart warehouse’ of the future. Recent innovations such as smart glasses used to display information triggered by a barcode or QR code on a container3 will be taken to a new level by incorporating scanners to automatically capture and input information into the warehouse system, and integrating voice AI to initiate actions. Similar technology is already used in digital assistants such as Siri, Cortana or Amazon Echo. Unisys expects cargo operators to invest in converting machine commands to voice within the next three years.

Drones will be used inside the warehouse

Unisys predicts the more immediate application of drones in the cargo supply chain will be within the confined space of warehouses to conduct inventory checks more often and more accurately, replacing the largely manual process. Beyond locating lost or misplaced items, the drones will use sensors to monitor environmental information such as light or temperature for perishable food, pharmaceuticals or livestock, and raise alerts to unusual noise or movement that may indicate animals are in distress. Unisys predicts this within the next 12 months.

To meet the growing demand for small parcel deliveries, warehouses will transform from a storage location, to a dynamic facility

New alliances

Unisys predicts a fundamental move to longer-term revenue optimisation based on strategic alliances between airlines and organisations with large ongoing delivery requirements such as postal authorities, major online retailers, global distributors and supply chain management companies. This will require airlines to provide their alliance partners with transparent real-time access to available capacity and predictive analytics to determine best routes based on speed, reliability and cost. This expectation for visibility will also extend to the ‘last mile’ of the business-to-consumer cargo supply chain, leading to the development of mobile apps to allow the final recipient to be able to track the approach of their delivery – similar to how consumers currently track an approaching taxi or Uber.