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Cargo Carriers Dive Head First Into Digital Transformation

While global freight lags behind other industries entering 2019, the sector has started a radical digital transformation, according to the “Digital Carrier Connectivity Report 2019” from logistics technology company Freightos.

Central to this transformation are ocean and air freight carriers, which have significantly updated their systems in the last few years.

The Freightos/WebCargo report, a benchmark assessment of the world’s top 30 air and ocean carriers, evaluates 26 parameters in three categories and applies it to the top 30 air and ocean carriers. Key measurements are “digital connectivity,” defined as the ability to communicate directly with digital systems internally and with customers through Application Programming Interface (API); “online experience” that providing a one-stop shop, B2C-like ecommerce experience for business customers and prospects on their platform; and “transformation” focusing top-down on changing internal(and recently, external systems, processes and culture.

Only five carriers– Lufthansa Cargo, Air France KLM Cargo, Maersk, MSC and Delta Cargo–were identified as having real-time API connectivity to customer systems. Ocean carriers lead in every category, with a cross-category benchmark score of 38 percent.

“Technology has been slow to transition from the deck to the cargo hold,” the report said, with air cargo only scoring 22 percent. “For a time-sensitive mode, there is an even more urgent need for digitalization.”

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While smaller companies can often achieve digital transformations in a shorter timeframe, the results showed that the larger the carrier, the more digitally mature they are likely to be. Some carriers, especially ocean, invest heavily in transformation, with 50 percent of ocean carriers having a designated executive in charge of transformation, and 40 percent published a digital strategy. CMA CGM and Maersk, specifically, sponsor accelerator and incubator programs.

“While these benchmarks show much has been done, we may be entering global trade’s most pivotal decade of innovation,” Freightos CEO Zvi Schreiber said. “Automation and APIs means on-demand decision making, smarter supply chains and an acceleration in the already breakneck speed of the movement of goods.”

In ocean freight, Maersk scored highest for digital connectivity, at almost double the score of the next most advanced carrier. Hapag-Lloyd scored highest for online experience, closely followed by CMA CGM, and CMA CGM and Maersk are leading with transformation.

In every category, ocean carriers were, on average, more mature than their air counterparts. The highest differential between the two forms of transportation was in transformation, with ocean carriers at 45 percent and air at 10 percent.

In air, carrier digital maturity scores were more erratic across categories. Lufthansa had the highest digital connectivity score, followed by Air France KLM Cargo. Delta Cargo had the best online experience score, while Lufthansa Cargo had the best transformation and cross-category scores. With a cross-category score of 22 percent, air carrier digital maturity was well behind ocean carriers’ score of 38 percent. WebCargo CEO Manel Galindo said this most likely stems from cargo businesses having lower budgets than airlines’ passenger business, whereas ocean carriers don’t have the dual business structure.