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Digital supply chain ecosystems: how to enable community-level players?

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Digital supply chain ecosystems: how to enable community-level players?

Posted by: Paanukoski Egor
Category: opinion

(the article first appeared in LinkedIn  on 26 05 2020)

In today´s world, every business seems to be building digital ecosystems immediately targeting multiple regions and even continents, air cargo supply chain being no exception to this trend. Initiatives abound but the two major questions remain: are data sharing and enabling logic embedded into such ecosystems? And are these ecosystems aware of the exact needs of the local community players? After all, air logistics supply chain starts and ends at the community level.

Inclusivity

Nothing has highlighted the need to go digital better than the COVID-19 pandemics which demonstrated that digitalization is no longer a cool thing to have, instead it is the only survival strategy. Cargo supply chain operating environment dictates to be data-driven and data-savvy, it dictates to follow industry´s standards, even if there are parallel standards like in EDI ( Electronic Data Interchange) domain, as well as provide shipment´s tracking and visibility, security and process automation.

However, the financial capacity and level of the digital transformation of the players involved in the cargo supply chain differ drastically. Some players are leaping forward with new technology, some try to make workarounds with current legacy systems. Some operate on all continents, but the vast majority of cargo supply chain companies are operating a modest fleet of transport vehicles covering one country or even one area of a country. So, what about them, do they have the capacity to make the right investment decision and what happens to them if their digital investment eats all their margins and proves inefficient?

In Qstep´s view, digital ecosystems should enable not only those who are digitally savvy and capable and looking to scale but also those who need help with digitizing their operations and thus ensuring good competitive environment in the air cargo supply chain. This is why the logic behind Qstep cargo handling SaaS platform has been to enable the clients of our clients. How?

Extranet

Today´s ecosystems are very much built on APIs and for this purpose, we at Qstep, have rolled out a universal API to allow our clients to connect to any third-party provider. But in this part, we will focus on more traditional tools such as a web-based extranet as it still proves a handy and simple tool to enable a lot of community players in the cargo supply chain. Our logic has always been the following: if cargo handling agents, as main platform users, are provided with intranet, then their clients are provided with extranet.

As representatives of airlines, cargo handling agents need to act in accordance with airlines´ requirements and IATA rules, many of these requirements are not so easy to implement for transport and freight forwarding companies operating at the community level. So, the access to platform´s extranet should allow transport and freight forwarding companies to compensate for the lack of certain functionality to successfully do business with cargo handling agent and therefore the airline.

So what exactly the cargo handling agent´s extranet can do for the transport and freight forwarding companies? Here are a few examples:

  • Real-time overview of import & export shipments status with a cargo handling agent;
  • Order creation i.e. sending expected NRFC (Not Ready For Carriage) shipment basic data to a cargo handling agent for acceptance:
  • Issuing delivery waybills if needed for shipments to be delivered. Essential for eAWB shipments;

For cargo handling agents the benefits of extranet are also manifold, from becoming a more attractive and enabling partner to having a more transparent and sustainable (paperless) cooperation with transport and freight forwarding companies. Another winner is the airline which, thanks to inclusive digital ecosystems of its cargo handling partner, also grows its customer base among transport and freight forwarding companies that positively affects the carrier´s loading factor.

To sum up: 1). building and scaling of successful digital ecosystems always begins at the community level because, let’s not forget, this is where the supply chain starts and ends. 2). inclusive digital ecosystems are often the only cost-efficient way for smaller transport and freight forwarding companies to reap benefits from the rapidly increasing pace of digitalization in the air cargo supply chain 3). Efficient web-based extranets can still be a viable enabling tool for the local community players to feed the data to the partners in the air logistics chain.