Chain Reaction is Sourcing Journal’s discussion series with industry executives to get their take on today’s logistics challenges and learn about ways their company is working to keep the flow of goods moving. Here, Jon Acquaviva, founder of Pelicargo, discusses how the air freight-focused company is increasing its technological innovations for a more efficient, sustainable supply chain.
Name: Jon Acquaviva
Title: Founder
Company: Pelicargo
What industries do you primarily serve? Which industry do you think has the most to teach fashion about improving its supply chain logistics?
Pelicargo is a technology and services startup founded at the Massachusetts Institute of Technology (MIT). Pelicargo partners with freight forwarders, which radically simplifies the air freight sourcing process by matching airlines and freight forwarders with the right cargo.
At Pelicargo, we specifically focus on air freight, meaning we have exposure to a wide range of industries and verticals that use this same mode of transportation. Businesses use air freight for many reasons, including urgent shipments to their primary mode of logistics. The one sector that certainly “gets” air freight is the pharmaceutical industry. By the nature of their products, pharmaceutical companies are among the top buyers of air freight shipping. They have engaged the airlines to continuously improve and design subproducts suitable for their sector needs, and independently they have implemented solutions to close any remaining gaps. Pharmaceutical companies realized early on that they need to partner with their suppliers to run a safe and efficient supply chain.
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What are the main things brands and retailers could do (or stop doing) right now that would immediately improve logistics?
The right approach for logistics varies greatly depending on the mode of transportation and having a coherent strategy—for inland, ocean and air freight, collectively and independently—is a start. Once the strategy is in place, brands can take a step back and design for logistics.
What area of logistics isn’t receiving the industry attention it deserves?
I don’t think sustainability receives the attention it deserves, certainly not at the operational level. At the end of the day, most freight still moves with the lowest cost option, irrespective of sustainability.
As a sector, logistics needs to make it easier for shippers to make sustainable decisions. The main solution I see for this is open tech. Technology can collect and calculate accurate information, combine it in a useful way and ensure it’s in front of a shipper at the point of sale. I would encourage all companies in logistics to open their systems via an application programming interface (API)—a type of software interface offering a service to other pieces of software—so that more information can be collated, challenged and improved.
What is your company doing to make the movement of goods more sustainable?
We invest a significant amount of time into our sustainable initiatives. We promote sustainability in three main areas: improving operational efficiency, increasing visibility and promoting open data.
For operations, most companies think of air freight as unsustainable compared to other modes of transportation. However, the bulk of air cargo capacity is belly space on scheduled passenger aircraft. As these aircraft fly anyway to move passengers, utilizing this excess space improves sustainability by maximizing fuel efficiency, which is essentially like carpooling. We actively support airlines to increase the utilization of their flights (load factor) with a focus on non-core lanes and backhauls. When shippers identify opportunities to use these flights, it’s a win-win as airlines increase their load factor and shippers receive better pricing.
We increase visibility by showing the logistics buyer sustainability indicators at the point of sale. By collating availability data and promoting it, we can influence shipping decisions through awareness.
Lastly, the foundational building block of a more sustainable industry is open data and collaboration. By having our technology support integrations in any direction and modular pieces, we can connect disconnected participants, collate discrete data and contribute to the goal of a seamless, connected supply chain.
What is the one thing brands and retailers could be doing to make better use of technology to improve logistics?
Focus on open systems and technology integrations.
A logistics movement involves a complex chain of independent players, so companies must cooperate to streamline various existing complex logistics platforms. The more open your systems are, the more integrated you can become, and the better your operations will become with the seamless transfer of data. Practically, this means working to develop APIs for your core workflows and opening those up to your suppliers, partners and customers.
Are you optimistic about the state of supply chains in the next few years?
Absolutely. Considering the macroeconomic environment this year shipments continue to move, and the massive digital transformation that accelerated during Covid continues at full speed. Companies continue to digitize, drive efficiency, and look for new ideas to improve their operations.
Ultimately, one measure of an industry is the liveliness of the startup ecosystem. In logistics, I can say it’s active and moving fast.