Automated dimensioning is the most effective way to ensure products arrive at the right place, in the right condition and on time. This is particularly important in the cargo industry, which has operations that are highly sensitive to even minor delays or transport disruptions. While manual systems are less expensive and easier to implement, they are also more likely to result in human errors. These mistakes cost companies more than $100 billion each year in extra costs from lost merchandise and damaged goods
Automated Dimensioning system has two main types—package and parcel dimensioning—mainly used in e-commerce and the logistics market. These solutions help calibrate weight, dimensional data and shipment applications used by different industries such as industrial manufacturing, consumer electronics, ecommerce, healthcare, agriculture and food & beverage.
The major benefit to volumetric dimensioning is that automated dimensioning is a revolutionary planning tool that lets companies dynamically and quite literally pack more into their shipping containers. With the ability to record and analyze every container they pack, companies are able to determine how to maximize the amount of cargo per container and make more money on each trip.
With Amazon and eBay dominating the e-commerce market, the most visible impact of e-commerce has been the need for efficient delivery of more packages in increasingly varied shapes, sizes and weights. This trend has been one of the key drivers behind the industry’s almost universal adoption of dimensional (weight) pricing in recent years. As more parcel companies and warehouses are looking toward space optimization and more economies of scale, this is where automatic dimensioning technology can be a game changer.
However, the current trend for more efficient last mile delivery has prompted the roll-out of more modern machines at parcel centers and warehouses. Automatic dimensioning technology based on weight (DIM) is therefore becoming quite a common solution today, providing accurate pricing information and increased accuracy – but also an easier way to manage dimensions and dimensions pricing across the supply chain.
The total revenue of the Global Cross-Border B2C E-Commerce Market was valued at $793.7 Million in the year 2021 and is projected to rise at a CAGR of 25.1% during the forecast period, which is evaluated to reach $3,042.2 Million by 2028. The major factor supporting the expansion of market worldwide are the increase in export & import of goods & services across the world and rising expansion of trades globally.
Michael Eichenberg, CEO/Co-founder of FreightSnap, explains to Air Cargo Update how Automated Dimensioning is the key to automation wedge in the industry.
Manual dimensioning of freight items can be a tedious and labor-intensive process, but using a “dimensioner,” you can save you time and money.
A typical manual freight process can be an exercise in futility. It’s time consuming, whereby workers need to locate the dimensions from various sources. Missing dimensions cause delays and payoffs, which means less cash in the bank account. But with a new generation of dimensioners that can read barcodes and communicate wirelessly, the industry is eliminating the burdensome tasks and costly delays that typify manual processes.
“There are two things that happen with manual dimensioning that are replaced by automated dimensioning. The first is the actual measurement of the object and the recording of the weight. Generally, weight and dimensions are provided by separate devices that work together. If a manual process, a workers need to utilize a tape measure. This also requires writing or entering the data to a form a screen or both. Then they need to take images of the object with a digital camera and transfer those images to a repository. For any one piece of freight, this can take anywhere from one to six minutes per object. A dimensioner can do all of these functions in two seconds or less,” explains Eichenberg.
Automated dimensioning is the most effective way to ensure products arrive at the right place, in the right condition and on time. This is particularly important in the cargo industry, which has operations that are highly sensitive to even minor delays or transport disruptions.
While manual systems are less expensive and easier to implement, they are also more likely to result in human errors. These mistakes cost companies more than $100 billion each year in extra costs from lost merchandise and damaged goods.
“Due to a shortage of labor and increased freight movement due to changes in the way goods are delivered to customers, logistics companies need to find ways to scale warehouse operations such as the measurement of freight. Automated Dimensioning provides scale to warehouse operations through increased productivity, accurate billing data, and better capacity utilization. These are the keys to removing bottlenecks in clogged supply channels. Removing production bottlenecks helps, but if you can’t move the goods through the system, then the supply chain bogs down. Automated Dimensioning is one of many important factors in streamlining logistics,” said Eichenberg.
Automated Dimensioning is a key to the automation wedge. It is one of the building blocks that make up the value chain required to ultimately achieve Continuous Replenishment and Distribution. These technologies are important in addressing the modern challenges of Supply Chain Management, such as reducing cost, increasing efficiency and optimizing warehouse productivity.
The technology involved in automating the dimensioning process has made it fast and efficient. One Dimensioner can process up to 1,600 freight containers per day. A Dimensioner operator who is experienced and highly trained will take an average of 8-seconds to measure a piece of freight. If a company were using 2 operators, they could process up to 3,200 freight containers per day.
An advantage all around is that this new technology provides a digital image, which then can be used for additional information platforms. For example, having digital images of the containers makes it easier for a Transportation Management System (TMS) to capture this image and enter it into the system as opposed to manually measuring the container at the dock or other facilities in the chain.
“The ideal situation would have been to have all machine generated data to flow seamlessly from the dock to the back office. This affectively removes the middle data entry person from the process and allows for productivity and repurposing valuable human resources. In some cases, Dimensioner providers have independent cloud data management systems to house images and data of the freight that has been measured. Some companies have their own Transportation Management Systems and utilize integration methods to transfer data from the Dimensioner to their systems. Others though may not have the same investment or the resources to integrate all of the data. For example, some systems won’t allow images of the freight to be stored. Others might be lacking key components. This is why it is important to have a full repository to draw upon in the event that your own internal systems might be lacking the design to house actual dimensions on freight,” said Eichenberg.
There are some functions of automated dimensioning that are always going to be the same. Each Dimensioner will automate the measurement of cingulated freight without the need for human intervention. Where things differ is in the process.
In some use cases, the freight might be moving under a scanner and measured in motion, other times it is measured while presented in a pre-identified area. Every application calls for identification or cataloging of the measured object so that the measurements and weight can be applied directly without confusion.
There are some use cases where the freight might be transported on a forklift and measured during transport. Each application has specific requirements and Dimensioning vendors must provide integration services to enable customers to maximize the Return on Investment of the equipment.
Freight audits happen and they are a part of doing business with carriers. From time to time, the carrier will perform an audit of the freight based upon how it was measured at the Shipper location. To mitigate any audit changes, accurate rating is paramount immediately after the freight has been dimensioned.
“When freight is moved from a Shipper’s dock to a carrier’s dock, it can shift dramatically on the pallet and then measure quite differently. If the Shipper does not have certified dimensions and images at the time of tendering, there is no countermeasure if the freight was rated with a particular density class at the Shipper location and then measured differently at the carrier. This happens more than people realize. The ability to fight an audit reclassification is solely based upon accurate rating following the dimensioning process at the Shipper dock. That is key to the process. Too often Shippers are not rating freight properly and there is no fix to that situation.
“If a Shipment has multiple images documenting the condition of the freight, you have a much better position when comparing the freight to how it was received by the customer. Images provided by the Shipper’s customers will show external damage when compared to pre-tendered images taken on the Shipper dock. Accurate dimensions and weight will always provide the correct rating. There are no exceptions to this rule. The correct rating and charges will allow Shippers to bill correctly without the worry of additional fees from Carriers. Over time, as Shippers accumulate accurate freight profiles, they will be in a stronger position to negotiate rates with their Carrier partners. Good data means less risk for the Carriers, which always leads to best possible pricing,” concludes Eichenberg.
“The transition to density pricing over straight class identification means we will have to provide accurate measurements. A tight labor market has already stretched dock operations and that was before this transition. Without automated dimensioning, it will be impossible to meet the data requirements coming out of the density transition”.
Lastly, according to Micheal transitioning to automated dimensioning is not as difficult as it might seem. The equipment itself is fairly easy to install and calibrate. The real challenge is training a workforce, thinking through the processes, and integrating the data electronically. With the proper resources and planning, these projects can advance smoothly and show immediate ROI. The best course of action is to choose a vendor that is willing to work through these processes with your team. Too often Dimensioning Vendors take a shortened approach to implementation. Basically, install the equipment, a quick one-hour training, and they are gone. That type of implementation leads to slow adoption, frustration, and in some cases a complete return to manual processes. In any organization, there is going to be some pushback and fear when certain processes are automated. The key is to involve as many people as possible in the process, plan, and then have a good plan of execution which should involve your vendor.
About 60% of India’s nearly 1.3 billion people live on less than $3.10 a day, the World Bank’s median poverty line. And close to 190 million Indians are still undernourished despite adequate food production. Against this backdraft, the country also struggles to save nearly 40% of agricultural products it produces every year blamed on broken food systems and inefficient supply chains.
Nearly 40% of the food produced in India is wasted every year due to fragmented food systems and inefficient supply chains, according to the Food and Agricultural Organization which pointed out that the loss occurs even before the food reaches consumers.
According to estimates, 16% of fruits and vegetables with short shelf life are wasted due to insufficient cold storage facilities. A report of the United Nations mentions that nearly 190 million Indians remain undernourished despite adequate food production.
The gravity of this situation is now being understood by the government and some steps have been initiated, albeit getting implemented gradually. The need to step up is what is required. One of the initiatives the government has rolled out is ‘Krishi Udan’ (Krishi is agriculture and Udan is flight).
Focus on hilly areas, North Eastern States
The Krishi Udan Scheme was launched in August 2020 on international and national routes to assist farmers in transporting agricultural products so that it improves their value realization. Krishi Udan 2.0 was announced in October 2021 enhancing the existing provisions, mainly focusing on transporting perishable food products from the hilly areas, North-Eastern States and tribal areas.
Primarily the scheme was focusing on 25 airports of North-Eastern Region, Hilly and Tribal region namely Agartala, Agatti, Barapani, Dehradun, Dibrugarh, Dimapur, Gaggal, Imphal, Jammu, Jorhat, Kullu (Bhuntar), Leh, Lengpui, Lilabari, Pakyong, Pantnagar, Pithoragarh, Port Blair, Raipur, Ranchi, Rupsi, Shimla, Silchar, Srinagar and Tezu. Subsequently, other 28 AAI airports, namely, Adampur (Jalandhar), Agra, Amritsar, Bagdogra, Bareilly, Bhuj, Chandigarh, Coimbatore, Goa, Gorakhpur, Hindon, Indore, Jaisalmer, Jamnagar, Jodhpur, Kanpur (Chakeri), Kolkata, Nasik, Pathankot, Patna, Prayagraj, Pune, Rajkot, Tezpur, Trichy, Trivandrum, Varanasi and Visakhapatnam have been included in the Scheme.
Krishi Udan is a convergence scheme where eight Ministries /Departments namely Ministry of Civil Aviation, Department of Agriculture & Farmers’ Welfare, Department of Animal Husbandry and Dairying, Department of Fisheries, Ministry of Food Processing Industries, Department of Commerce, Ministry of Tribal Affairs, Ministry of Development of North Eastern Region (DoNER) would leverage their existing schemes to strengthen the logistics for transportation of agri-produce. There is no budgetary allocation for the scheme.
Full waiver of landing, parking, terminal navigational landing charges
Under the scheme, facilitating and incentivizing movement of agri-produce by air transportation by full waiver of Landing, Parking, Terminal Navigational Landing Charges (TNLC), and Route Navigation Facility Charges (RNFC) for Indian freighters and Passenger to Cargo (P2C) at selected airports of the Airports Authority of India, have been included.
A total of 1,08,479 Metric Ton perishable cargo (International + Domestic) was handled in Financial Year 2021-22 (till 28 Feb., 2022) in comparison to 84, 042 Metric Ton handled in Financial Year 2020-21 at AAI airports.
Krishi UDAN 2.0 primarily focuses on transporting perishable food products from the hilly areas, northeastern states and tribal areas. The scheme aims to ensure seamless, cost-effective, time-bound air transportation and associated logistics for all agri-produce.
Multi-modal transportation for better convergence
The objectives are to increase the share of air in the modal mix for transportation of agri-produce, which includes horticulture, fishery, livestock & processed products. To achieve better convergence on various components catering to the development of sustainable and resilient agri-produce value chains across various schemes of the Central and State Governments and their associated agencies as well as the resources committed by the private sector to improve supply chain competitiveness by:
The Union government is committed to doubling farmers income and for doing this, there needs to be a paradigm shift. Doubling farmers income doesn’t mean only increasing the value in the market for the produce but it also means creating a paradigm shift for the farmers.
Airports Covered under Krishi Udaan 2.0 Scheme
The Ministry of Civil Aviation is setting up terminals in Leh, Srinagar, Nagpur, Nashik, Ranchi Bagdogra, Raipur and Guwahati. It has selected 53 airports to be covered under the Krishi Udan 2.0 Scheme which will be majorly operated by the Airports Authority of India. Along with these eight domestic and international trade routes will also be started and the routes include Amritsar-Dubai to transport baby corn, Darbhanga and the rest of India to transport Lychees and Sikkim and the rest of India for organic produce.
Trade Route Setup under Krishi Udan 2.0 Scheme
The Central government is also working towards setting up a trade route between Chennai, Vizag and Kolkata and East Asian countries to transport seafood. Other routes include Agartala-Delhi-Dubai for pineapple; Dibrugarh-Delhi-Dubai for Mandarin Oranges and Guwahati to Hong Kong for pulses, fruits and vegetables.
The Ministry has asked states to reduce sales tax on aviation turbine fuel (ATF) to 1 percent for airlines under Krishi Udan 2.0 Scheme. The ministry along with AAI has setup up a hub and spoke model at Agartala, Srinagar, Dibrugarh, Dimapur, Hubbali, Imphal, Jorhat, Lilabari, Lucknow, Silchar, Tezpur, Tirupati and Tuticorin.
In 2022-23, the Ministry will develop a hub and spoke models to transport perishable products in Ahmedabad, Bhavnagar, Jharsuguda, Kozhikode, Mysuru, Puducherry, Rajkot, and Vijayawada. In 2023-24, Agra, Darbhanga, Gaya, Gwalior, Pakyong, Pantnagar, Shillong, Shimla, Udaipur and Vadodara and in 2024-25, Holangi and Salem will be covered.
E-Kushal launched
The ministry will also develop an online portal E-Kushal to facilitate information on Krishi UDAN 2.0, which has its main objective of giving farmers wings by improving the value of realization of agri-produce. Under the scheme, which is path breaking, subsidized fairs would be provided to farmers and delivery of agri-produce, subsidy applicable on national and international routes.
Jyotiraditya M. Scindia, Union Minister of Civil Aviation, said: “Krishi UDAN 2.0 is an example of this government’s collaborative approach towards policy making. This scheme will open up new avenues of growth for the agriculture sector and help attain the goal of doubling farmers’ income by removing barriers in supply chain, logistics and transportation of farm produce.”
The Union Minister said, “We want to take the Anndata to the highest level, by adopting the model of A2A – Agriculture to Aviation. The convergence between the two sectors is possible because of 3 primary reasons – Evolutionary possible use of biofuel for aircraft in future, use of drones in agriculture sector, and due to greater integration and value realisation of agricultural products through schemes like Krishi UDAN.”
This laudable scheme is picking up and the NDA government over the last few years has made farm produce storage a big focus area. A Rs 6,000-crore kickstart project called Sampada a national scheme to develop an integrated supply cold chain for agricultural products is being implemented involving public and private players.
The Food Corporation of India (FCI), which runs the store houses that form the backbone of India’s extremely critical food security program, said efforts are on to bring down further the amount of food grain wasted each year in FCI storages. FCI had commissioned a study by the Indian Council of Agricultural Research (ICAR) to suggest scientific methods to improve storage facilities to reduce wastage.
Automated dimensioning is the most effective way to ensure products arrive at the right place, in the right condition and on time. This is particularly important in the cargo industry, which has operations that are highly sensitive to even minor delays or transport disruptions. While manual systems are less expensive and easier to implement, they are also more likely to result in human errors. These mistakes cost companies more than $100 billion each year in extra costs from lost merchandise and damaged goods
Automated Dimensioning system has two main types—package and parcel dimensioning—mainly used in e-commerce and the logistics market. These solutions help calibrate weight, dimensional data and shipment applications used by different industries such as industrial manufacturing, consumer electronics, ecommerce, healthcare, agriculture and food & beverage.
The major benefit to volumetric dimensioning is that automated dimensioning is a revolutionary planning tool that lets companies dynamically and quite literally pack more into their shipping containers. With the ability to record and analyze every container they pack, companies are able to determine how to maximize the amount of cargo per container and make more money on each trip.
With Amazon and eBay dominating the e-commerce market, the most visible impact of e-commerce has been the need for efficient delivery of more packages in increasingly varied shapes, sizes and weights. This trend has been one of the key drivers behind the industry’s almost universal adoption of dimensional (weight) pricing in recent years. As more parcel companies and warehouses are looking toward space optimization and more economies of scale, this is where automatic dimensioning technology can be a game changer.
However, the current trend for more efficient last mile delivery has prompted the roll-out of more modern machines at parcel centers and warehouses. Automatic dimensioning technology based on weight (DIM) is therefore becoming quite a common solution today, providing accurate pricing information and increased accuracy – but also an easier way to manage dimensions and dimensions pricing across the supply chain.
The total revenue of the Global Cross-Border B2C E-Commerce Market was valued at $793.7 Million in the year 2021 and is projected to rise at a CAGR of 25.1% during the forecast period, which is evaluated to reach $3,042.2 Million by 2028. The major factor supporting the expansion of market worldwide are the increase in export & import of goods & services across the world and rising expansion of trades globally.
Michael Eichenberg, CEO/Co-founder of FreightSnap, explains to Air Cargo Update how Automated Dimensioning is the key to automation wedge in the industry.
Manual vs Dimensioner
Manual dimensioning of freight items can be a tedious and labor-intensive process, but using a “dimensioner,” you can save you time and money.
A typical manual freight process can be an exercise in futility. It’s time consuming, whereby workers need to locate the dimensions from various sources. Missing dimensions cause delays and payoffs, which means less cash in the bank account. But with a new generation of dimensioners that can read barcodes and communicate wirelessly, the industry is eliminating the burdensome tasks and costly delays that typify manual processes.
“There are two things that happen with manual dimensioning that are replaced by automated dimensioning. The first is the actual measurement of the object and the recording of the weight. Generally, weight and dimensions are provided by separate devices that work together. If a manual process, a workers need to utilize a tape measure. This also requires writing or entering the data to a form a screen or both. Then they need to take images of the object with a digital camera and transfer those images to a repository. For any one piece of freight, this can take anywhere from one to six minutes per object. A dimensioner can do all of these functions in two seconds or less,” explains Eichenberg.
Automated dimensioning is the most effective way to ensure products arrive at the right place, in the right condition and on time. This is particularly important in the cargo industry, which has operations that are highly sensitive to even minor delays or transport disruptions.
While manual systems are less expensive and easier to implement, they are also more likely to result in human errors. These mistakes cost companies more than $100 billion each year in extra costs from lost merchandise and damaged goods.
“Due to a shortage of labor and increased freight movement due to changes in the way goods are delivered to customers, logistics companies need to find ways to scale warehouse operations such as the measurement of freight. Automated Dimensioning provides scale to warehouse operations through increased productivity, accurate billing data, and better capacity utilization. These are the keys to removing bottlenecks in clogged supply channels. Removing production bottlenecks helps, but if you can’t move the goods through the system, then the supply chain bogs down. Automated Dimensioning is one of many important factors in streamlining logistics,” said Eichenberg.
Automated Dimensioning is a key to the automation wedge. It is one of the building blocks that make up the value chain required to ultimately achieve Continuous Replenishment and Distribution. These technologies are important in addressing the modern challenges of Supply Chain Management, such as reducing cost, increasing efficiency and optimizing warehouse productivity.
Data entry process
The technology involved in automating the dimensioning process has made it fast and efficient. One Dimensioner can process up to 1,600 freight containers per day. A Dimensioner operator who is experienced and highly trained will take an average of 8-seconds to measure a piece of freight. If a company were using 2 operators, they could process up to 3,200 freight containers per day.
An advantage all around is that this new technology provides a digital image, which then can be used for additional information platforms. For example, having digital images of the containers makes it easier for a Transportation Management System (TMS) to capture this image and enter it into the system as opposed to manually measuring the container at the dock or other facilities in the chain.
“The ideal situation would have been to have all machine generated data to flow seamlessly from the dock to the back office. This affectively removes the middle data entry person from the process and allows for productivity and repurposing valuable human resources. In some cases, Dimensioner providers have independent cloud data management systems to house images and data of the freight that has been measured. Some companies have their own Transportation Management Systems and utilize integration methods to transfer data from the Dimensioner to their systems. Others though may not have the same investment or the resources to integrate all of the data. For example, some systems won’t allow images of the freight to be stored. Others might be lacking key components. This is why it is important to have a full repository to draw upon in the event that your own internal systems might be lacking the design to house actual dimensions on freight,” said Eichenberg.
There are some functions of automated dimensioning that are always going to be the same. Each Dimensioner will automate the measurement of cingulated freight without the need for human intervention. Where things differ is in the process.
In some use cases, the freight might be moving under a scanner and measured in motion, other times it is measured while presented in a pre-identified area. Every application calls for identification or cataloging of the measured object so that the measurements and weight can be applied directly without confusion.
There are some use cases where the freight might be transported on a forklift and measured during transport. Each application has specific requirements and Dimensioning vendors must provide integration services to enable customers to maximize the Return on Investment of the equipment.
Freight Auditing
Freight audits happen and they are a part of doing business with carriers. From time to time, the carrier will perform an audit of the freight based upon how it was measured at the Shipper location. To mitigate any audit changes, accurate rating is paramount immediately after the freight has been dimensioned.
“When freight is moved from a Shipper’s dock to a carrier’s dock, it can shift dramatically on the pallet and then measure quite differently. If the Shipper does not have certified dimensions and images at the time of tendering, there is no countermeasure if the freight was rated with a particular density class at the Shipper location and then measured differently at the carrier. This happens more than people realize. The ability to fight an audit reclassification is solely based upon accurate rating following the dimensioning process at the Shipper dock. That is key to the process. Too often Shippers are not rating freight properly and there is no fix to that situation.
“If a Shipment has multiple images documenting the condition of the freight, you have a much better position when comparing the freight to how it was received by the customer. Images provided by the Shipper’s customers will show external damage when compared to pre-tendered images taken on the Shipper dock. Accurate dimensions and weight will always provide the correct rating. There are no exceptions to this rule. The correct rating and charges will allow Shippers to bill correctly without the worry of additional fees from Carriers. Over time, as Shippers accumulate accurate freight profiles, they will be in a stronger position to negotiate rates with their Carrier partners. Good data means less risk for the Carriers, which always leads to best possible pricing,” concludes Eichenberg.
“The transition to density pricing over straight class identification means we will have to provide accurate measurements. A tight labor market has already stretched dock operations and that was before this transition. Without automated dimensioning, it will be impossible to meet the data requirements coming out of the density transition”.
Lastly, according to Micheal transitioning to automated dimensioning is not as difficult as it might seem. The equipment itself is fairly easy to install and calibrate. The real challenge is training a workforce, thinking through the processes, and integrating the data electronically. With the proper resources and planning, these projects can advance smoothly and show immediate ROI. The best course of action is to choose a vendor that is willing to work through these processes with your team. Too often Dimensioning Vendors take a shortened approach to implementation. Basically, install the equipment, a quick one-hour training, and they are gone. That type of implementation leads to slow adoption, frustration, and in some cases a complete return to manual processes. In any organization, there is going to be some pushback and fear when certain processes are automated. The key is to involve as many people as possible in the process, plan, and then have a good plan of execution which should involve your vendor.
“I do not think I have stopped learning from this pandemic or indeed in life in general, but a major lesson learned for me recently, was how quickly people band together to find solutions and the speed at which creativity and relentless work ethic comes rushing forward in times of need.”
Q&A with Matthieu Casey Air Canada Managing Director Commercial – Cargo
Air Canada has shown incredible resilience and innovation during the pandemic, serving Canadaʼs people across its vast terrain that occupies much of North Americaʼs continent, stretching from the Atlantic Ocean in the east to the Pacific Ocean in the west, and the Arctic Ocean in the north.
The airline reaches out even to the farthest corners of the country helping people and businesses survive the freezing cold months with temperatures as low as -5°C and -15 °C or sometimes below -30°C in Winnipeg, Manitoba.
Beyond the Canadian borders, Air Canada also transports different types of cargo. Its good business standing in the industry has resulted to a 42% increase on its revenue in Q1 2022 to $398 million.
The Quebec-based Matthieu Casey, Air Canada’s Managing Director for Commercial Cargo, shares his insights in this Q&A about the company’s journey amid the air cargo industry’s growing influence and role in facilitating global economic and healthcare recovery efforts following the pandemic.
Casey, a communications graduate at University of Ottawa, who also studied at The Wharton School, has spent over 25 years in the aviation industry, the last 12 at Air Canada Cargo.
Prior to his promotion, he was Air Canada Cargo’s Senior Director, Cargo Global Sales & Revenue Optimization. In his new role, he oversees global sales, revenue management, and cargo analytics with responsibility for the airline’s digital and direct
customer experience.
How is business doing so far for Air Canada Cargo since the pandemic struck in March of 2020? Please elaborate and share some figures if possible?
The entire team at Air Canada Cargo and indeed Air Canada as a whole was tremendously quick to pivot and ensure capacity was put back into the market on key trade lanes, with a particular focus on sustained and regular scheduled capacity to ensure market stability for the air cargo community. This approach provided much needed stability in an otherwise very unstable time and was testament to our dedication to serving our customers and long-standing partnerships.
Our growth, both on volumes and revenue, has been very positive, and is in fact outpacing many of our market peers. The growth was also sustained and sure-footed, with a steady upward trend and our 2021 revenue numbers being more than double our 2019 numbers.
What are your plans for 2022 to keep up with the growing demand for air cargo services?
As announced last year, we are tremendously excited to be commencing our freighter operations, with the first of our eight converted Boeing 767-300ER freighters having entered service late last year. Our second will enter service this month and a subsequent six more will enter into service by 2023 at a cadence of about one every four months. This growth, coupled with the resumption of our passenger network, will
provide an increase in cargo capacity in 2022 above pre-pandemic levels.
How many employees do you currently have? How many more will you likely hire as you widen your services?
Our team has always been a lean yet effective one, but with the growth we have seen and are continuing to plan for, we have been actively recruiting more talent to support our strategy and continue to deliver on our promise on customer service excellence.
What would you say are your biggest challenges in serving your markets globally?
We are much more focused on looking at challenges as opportunities and one such example is what we have witnessed around the world with warehouse congestion. As a result, we are accelerating our infrastructure improvement programs with targeted investments into many of our
strategically positioned self-handled global cargo hubs in Montreal, Toronto, Vancouver, Frankfurt, London, and Chicago.
We have recently increased our warehouse space in Frankfurt and just last month, inaugurated the first phase of our 30,000 sq ft temperature-controlled facility in Toronto.
Do you think automation in cargo handling is the way to move forward? Does the investment justify the benefits or returns?
Automation is certainly a key component of our infrastructure improvements and only increases the productivity of our teams, which leads to improved service to our customers. The added benefit of this is an AirCargo Update improved work environment for our colleagues.
What sort of tech investments have you made to enhance your operations or services?
We are continuing to invest in many digitalization projects tied to improving the customer journey and enhancing the user experience. We have developed and released multiple API s providing streamlined connectivity with our customers and partners, and we have invested in modernizing our contact centres to improve service levels and support our teams and customers.
Our ongoing artificial intelligence labs are improving efficiencies and supporting initiatives aimed at improving decision making, and providing better and more robust capacity outlooks. Another goal is to simplify acceptance processes in our warehouses, which will reduce potential service deviations.
Please update us with the services and products that you currently offer worldwide.
We are CEIV certified both for Live Animals and Pharmaceutical, and provide services across most commodities. Please share a brief
background about yourself and some lessons we could all learn from this pandemic.
I have over 25 years in the airline industry, the last 12 at Air Canada Cargo and have held various roles ranging from Commercial positions in Canada and Global Sales as well as heading up Revenue Management, Interline partnerships, Marketing and Business Intelligence.
What have I learned from the pandemic? I do not think I have stopped learning from this pandemic or indeed in life in general, but a major lesson learned for me recently, was how quickly people band together to find solutions and the speed at which creativity and relentless work ethic comes rushing forward in times of need.
Born and raised in India, Mohammed Esa has been working for the last 30 years in many emerging markets, in global leadership, commercial and operational roles in the transportation and logistics industries.
“I have spent the last 18 years at Agility, living in Hong Kong, Dubai & finally settled down in Basel, Switzerland. In addition to that, I also spent 13 years at Emirates Airline, in various roles of Finance, Operations & BD,” Esa shared.
Esa’s favorite quote is from anything by ‘Rumi’ whose quotes transcend time and make you reflect. He also looks up to humble leaders like Mahatma Gandhi.
“I find that I am most in tune with my spirituality when I am doing an activity like playing tennis, hiking, reading or participating in mindfulness. Mental clarity, and a sense of calm is what I find most relaxing. I tend to gravitate towards activities that are calming in nature, and with meditation being incorporated into my weekly routine, I am more grounded and present in my everyday life.
“On weekends, I am usually reading 2 books simultaneously. I read to unwind at the end of a long day, spend time outdoors getting in a walk and some fresh air and occasionally cook as well. The evenings are also to catch up with the kids, hear their stories of the day and learn more about the world from them. They are an amazing source of knowledge,” Esa tells Air Cargo Update.
Esa who holds an MBA degree from Bradford University, UK. He was appointed this year as Worldwide Flight Services (WFS) Senior Vice President, Group Commercial Business Development & Strategy.
Esa, as he’s known to friends and colleagues, have spent the last 18 years at Agility Logistics, most recently as SVP Global Business Development & Global Lead Digital Customer Solutions. In this role, he was responsible for shaping and executing Agility’s commercial strategy, building long-term customer relationships across various industry sectors, and overseeing the deployment of new and emerging technology solutions.
At WFS, Esa’s mission is to develop and oversee the implementation of WFS’ commercial development strategies to ensure a fully integrated commercial approach to drive future growth. He will also help to identify and develop new lines of business and focus on the development of digital solutions which support WFS’ customer experience and organic growth.
Esa notes that if he weren’t an aviation guy he would probably have ended up as a sports commentator.
“Being a sports fan and an ardent follower of tennis & cricket, I would have probably ended up being a commentator or involved somehow in the operational running of one of these sports through youth academies, sports councils, etc.”
Rhenus Air & Ocean has expanded its presence in north-west Europe by opening two new business sites in Copenhagen and Aarhus.
Rhenus said the two new Danish offices would strengthen connections with the Netherlands, Belgium, Ireland, Norway, and the UK.
Prior to this, Rhenus had already added a new branch in Norway in February.
“Our rapid growth in the Nordic countries is evidence of the focus and strategy to provide reliable, high quality service and operate in close proximity to our customers and their suppliers,” said Frank Roderkerk, the chief executive of Rhenus Air & Ocean North-West Europe.
He added: “Growing together with our customers in a sustainable manner is the aim for Rhenus Air & Ocean in North-West Europe. Supported by our own global network in the Asia-Pacific region, Americas, and Africa we are best equipped to be the competitive advantage for importers and exporters in the Nordic countries.”
AP Moller-Maersk has completed the acquisition of Senator International for $644m as it looks to boost its presence in forwarding and airfreight.
Maersk said that Senator brings with it a well-developed airfreight network comprising own controlled flights and long-term partnerships with airlines, a well-established full container load (FCL) and less than container load (LCL) network and specialized services such packaging, warehousing and distribution across five continents.
“The acquisition will enable Maersk to offer an even wider range of products and the ability to provide flexible and integrated logistics solutions to our customers,” the company said. “Allowing them to speed up or slow down cargo depending on their changing supply chain needs.”
Maersk explained that in the past two years, knock-on effects of Covid-19 have led to widespread congestions and production issues and more of its customers are requesting alternative means of cargo transportation.
“By joining Maersk, our customers will have access to a broader portfolio of products for their business needs and provide them with a single point of contact. It’s a perfect match, and we are really excited about the next chapter in our united journey,” said Tim-Oliver Kirschbaum, chief executive of Senator International.
Maersk has also launched its own cargo airline this year and purchased US forwarder Pilot Freight Services.
Maersk’s ambition is to have approximately one third of the annual air tonnage carried within its own controlled freight network, which will be achieved through a combination of owned and leased aircraft.
The remaining capacity will be provided by strategic commercial carriers and charter flight operators.
Scan Global Logistics (SGL) has opened a wholly-owned business in Dubai, taking advantage of the new no-local sponsor regulation.
The company had commercial representation in Dubai for a number of years, but decided to take advantage of new regulations allowing 100% foreign ownership in the UAE.
Only one month after SGL opened its first office in Dubai, a second office was quickly in the making, with further to come in the near future, SGL said.
“We have grown much faster than expected and still see exponential growth. To get even closer to our key customers, we will open our next office in Abu Dhabi in a few months, just as we expect to open a third office in Dubai,” said managing director, UAE, Ayman Kabbara.
Lars Syberg, regional chief executive, EMEA, added: “The rapid growth has also paved the way for importing global talent from our global network to boost our operations. It enables us to keep offering customers the same level of service and attention that they have come to expect from SGL.”
SGL said that the creation of a new business in the UAE was part of an “ambitious global growth strategy that includes plans to further expand across the EMEA region as a whole in a combination of greenfield and local acquisitions”.
Over the past two years, Scan Global Logistics has entered the UK, Poland, Czech Republic, Cambodia, France, South Africa, Togo, and Benin.
“With the help of our global legal and mergers and acquisitions teams, my team and I are reviewing all available options for expansion locally and in the region,” said Kabbara. “We are in it for the long run.”
Alibaba logistics arm Cainiao Network will serve as the cross-border logistics provider for South Asia e-commerce platform and sister comapany Daraz.
The cross-border shipping services that Cainiao will provide include local seller pick-up in China, first mile sortation, international line-haul, digital customs clearance, sorting, and after-sales customer service, with last mile delivery in the destination countries provided by Daraz Express and its affiliated local logistics partners in Bangladesh and Pakistan.
Cainiao will provide airfreight shipping services from China to South Asia, with 13 weekly flights from China to Pakistan, and eight weekly flights from China to Bangladesh.
“This is expected to result in approximately 10% reduction in logistics costs and a 20 to 25% improvement in delivery efficiency,” Cainiao said.
“Parcels will be affixed with Cainiao’s electronic shipping labels that enable merchants and consumers to track the shipping status of parcels in real-time. Customers will enjoy value-added services such as cash-on-delivery for greater convenience.”
Daraz merchants that sell on other Alibaba e-commerce platforms will be able to consolidate parcels for shipping through Cainiao, which streamlines order fulfillment and eliminates the need for multiple logistics service arrangements and varying pickup schedules.
Daraz chief executive Bjarke Mikkelson said, “The partnership between Daraz and Cainiao will improve our efficiency and improve overall customer service in our key markets of Pakistan and Bangladesh. This will help Daraz to continue on its mission to uplift communities through the power of commerce.”
Last month, GSSA Kales Group signed a deal to sell space on flights operated for Cainiao as they make their way back to China.
Airfreight rates out of China are expected to rise over the coming months while the peak season could be muted, according to Bruce Chan, senior analyst at investment bank Stifel.
In the latest Baltic Exchange market round-up, Chan said that rates out of Hong Kong and China had remained high over the last couple of months despite an easing of demand.
And with Shanghai now emerging from a month’s long lockdown, there is expected to be a surge in volumes as production levels continue to ramp up and companies look to meet a backlog of demand that has built up.
“As China takes some of its biggest steps toward reopening major cities, we expect rates to climb again over the next month,” wrote Chan.
“With Covid-19 cases declining in Shanghai, for example, the city is entering its final stages of reopening, which is expected to carry through mid-July, and we anticipate that the significant backlog will be cleared through origin port and airport facilities.”
Chan added that orders for the fourth-quarter peak season could also be pulled forward as companies look to tackle ongoing supply chain disruption in the latter part of the year.
This could result in a more muted peak season that usual.
However, this does not necessarily mean that the high prices currently being registered in air cargo will begin to ease this year, he explained.
Chan said: “Will that mark the end of one of the longest airfreight bull pricing cycles in history? At this point, we think it is difficult to say, especially with the industry still in crisis management mode.
“Pricing will normalize, especially as we think about the continued recovery of international belly capacity and a robust long-term order pipeline for freighters.
“However, the timeline will likely be protracted and shippers are well-advised, in our view, to manage toward resilience versus freight spend efficiency, at least for now.”
The latest figures from the Baltic Exchange Airfreight Index (BAI) show that average rates from Hong Kong to North America in May increased by 21.7% year on year to $9.69 per kg, while they up 1.2% compared with April.
From Hong Kong to Europe average rates for May increased by 34.2% year on year to $6.35 per kg, which is up 5.7% on April.
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