Aircargopedia Newsblast: January 2021!
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17th January 2021  
 


Dear Air Cargo Professional:

Wish you all a Happy and prosperous New Year!

5 benefits of artificial intelligence in logistics by Pat from SUNTEC.

Read more about current and emerging supply chain trends in this article by Peter Canellis, Professor of Management, Vaughn College.

In more World Air Cargo news, Emirates SkyCargo wraps up a momentous 2021 with several industry-leading milestones.

dnata launches line maintenance services in Pakistan. Liege Airport sees strong growth .
  DJ Ghosh

D.J. Ghosh
President & Publisher
AIRCARGOPEDIA
WWW.AIRCARGOPEDIA.COM
”The Complete Encyclopedia for the Air Cargo Professional & Investor”


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5 benefits of artificial intelligence in logistics

We’re going, to be honest with you: there won’t be any big surprises in this list of the benefits of AI in logistics. Prognosticators have been touting the potential virtues of new analytics technologies for many years, and by and large, those virtues align with exactly the sorts of process and planning improvements that logistics providers and supply chain managers look for whenever they’re evaluating new technology: increasing efficiency, reducing delays, and ultimately optimizing costs while improving operations. The crucial difference, then, is how different technologies make these benefits possible.

So, when it comes to AI, it can be useful to look beyond the benefits and try to get a sense of what’s going on under the hood. After all, you don’t want to be totally reliant on a black box that doesn’t give you an insight into how you’re supposed to get the benefits you’re looking for. Instead, you want a sense of what tactical and strategic changes these technologies are going to power within your existing value chain. Thus, without further ado, 5 benefits of AI integration—and how AI can actually bring them about.

1. Improved Transportation Forecasting
One of the technologies that we find most exciting right now is transportation forecasting—i.e. using AI and machine learning algorithms to predict your own future shipping capacity needs, likely price fluctuations in the logistics market, and future logistics capacity available by lane, mode, and carrier. Essentially, by collecting huge caches of market data from every possible touchpoint on the value chain (a feat that becomes easier and easier to accomplish the more you focus on supply chain integration), you can get proactive about reserving capacity at a reasonable price. In traditional transportation planning workflows, you only have a window of a few days after an order is created to find the right transportation options. With an AI-powered solution, you could reserve some capacity before customer orders have even come in, meaning that you radically decrease your chances of being shut out by prospective carriers or locked into expensive premium freight prices.

2. Reduced Bottlenecks and Delays in Production and Logistics
Now, assuming you have the level of integration we described above, you can use a similar method aimed at inbound logistics in order to reduce the possibility of production delays. Here, your predictive algorithms can identify potential parts shortfalls within your suppliers’ chains, thereby enabling you to take proactive countermeasures to ensure that you don’t experience outages on your end. By the same token, you predict incoming customer demand more effectively in order to reduce the likelihood that your production capacity can’t handle emerging customer orders. Thus, S&OP solutions that are able to incorporate AI can more effectively match demand to capacity (since their demand estimates are much more accurate), resulting in an upstream increase in accuracy for inbound logistics, meaning fewer production delays. On the outbound side, the same technology applied to your TMS can reduce shipping delays in the same way—enabling you to get proactive by letting you know what’s coming.

3. Increased Space Efficiency
Of course, AI comprises not just one thing, but a whole host of related technologies—machine learning, constraint programming, metaheuristics, path search, clustering, etc.—each one with different applications. Machine learning, in which algorithms are “trained” on large datasets in order to better predict future outcomes, help to power the sorts of AI benefits that we described in the two bullets above. But it’s far from the only way that this technology can add value. Metaheuristics, for instance, can help you create and prune decision trees in search spaces where there are too many possibilities for constraint programming algorithms to deal with. This is useful for cases where there might be virtually infinite options, and you simply need to choose the one that will be good enough. Thus, it’s ideal for something like 3D container loading. Depending on exactly what you’re loading into a given shipping container or truck, there are likely to be an almost unlimited number of ways to load them, and your AI simply needs to choose something that’s efficient enough within a reasonable runtime. In this way, you can decrease the number of containers you need or even the number of individual shipments required to fulfil orders—thereby reducing costs.

4. Decreased Transport Network Waste
While metaheuristics can help you use space more efficiently, clustering is your best option when it comes to the organization of an entire transport network. Why? Because it’s the best technique for grouping different elements together based on their similarities. In this way, you can analyze your network of hubs, cross docks, warehouses, and other network elements in order to uncover areas of waste or redundancy. In the same way, you can identify gaps where it might be useful to have network elements. Without any sort of analytics-driven visualization of your entire network, it would virtually impossible to achieve the optimal balance and placement elements to ensure quick shipping turnarounds at minimum cost. With AI, it’s as simple as modelling your network and letting the algorithms point you towards potential new efficiencies and process improvements.

5. Anticipatory Logistics
Any of the benefits that we’ve listed above can be extremely enticing on their own. But taken together, they don’t just paint a picture of cost management and waste reduction. On the contrary—taken as a whole, these various approaches to the integration of AI into the logistics chain represent the foundation for a radical transformation that’s already underway in the digital era. This is what’s sometimes referred to as Logistics 4.0 (i.e. shipping and transportation planning’s counterpart to Industry 4.0), but a more descriptive term is anticipatory logistics.

Anticipatory logistics involves pre-emptively acting on orders before the customers have even placed them. This might be as simple as adjusting your inventory levels in advance of a forecasted spike in demand or as complex as freight routes that are adjusted in real-time to maintain a distribution of goods throughout warehouses that lines up with the demand that hasn’t even emerged yet. Either way, it represents a new paradigm in logistics—and a huge competitive advantage for early adopters in terms of shipping costs and turnaround times. And the only way to make this possible is through AI adoption.

Pat Praveen
SUTEC LLC.
suntecrm.com

For any questions, please contact Pat at pat@suntecrm.com
For more info please visit www.suntecrm.com


Transport Logistics

In Praise of Multiple Perspectives

Interdisciplinary insights across time help us make sense of current and emerging supply chain trends

I always tell my students that, whenever studying any situation, identify and consider different perspectives. Then, look for commonality and divergence among these perspectives. The next step is to evaluate what you’ve read or heard and, finally, make your own judgement about what does and doesn’t make sense.

In this discussion, I’ll take my own advice to consider how the worldwide supply chain, the lifeblood of our existence, will respond to the current geopolitical mess that, just to make life really interesting, is further confounded by COVID.

Daniel Hannan, writing late last year in the Washington Examiner, made a compelling case for eschewing protectionism 1 . This piece was written in response to federal legislation that has been mooted to allow federal officials to determine if products were critical to national security and, if so, to require that 50% of the content be made in the USA.

In making his case, Hannan soundly invokes Adam Smith and David Riccardo to help make the case. Adam Smith (Microeconomics: Wealth of Nations, 1776) wrote of the “Invisible Hand” in the marketplace that orchestrates supply to align with demand. Ricardo (Macroeconomics: essay against tariffs,1815) developed the concept of “Comparative Advantage” that illustrates how international trade improves global welfare.

With the benefit of hindsight we see that Smith and Ricardo have left politics and pandemics out of their respective models. What can be done about this?

Enter SWOT Analysis (Management Strategy). SWOT Analysis, developed at the Stanford Research Institute between 1960 and 1970 3 , tells us that organizations’ strengths and weaknesses are pitted against the opportunities and threats presented by the outside world. I think we can all agree that politics and pandemics qualify as threats. The SWOT model also accommodates those optimists who see these as opportunities.

With SWOT firmly in mind, we move on to the post-World War 2 period of economic retrenchment and accelerated international trade, especially from around 1970. The quest for new markets on the demand side also led multinationals to address supply side price pressures by moving production to “low cost” countries. That worked for a while, but then increasing prosperity in the “low cost” countries increased local demand and local wages at the same time. This caused a move out of what were really not “low cost” but “lowest cost” countries to “lower cost” countries.

With global wages rising and often quality issues developing as well, the “offshoring” trend began to morph into a “reshoring” of work back to home countries. As early as 2014, a paper published by McKinsey (Management Strategy) indicated that what’s really going on is a move toward “next-shoring” 4 . This term was coined to name “what’s coming next” - the more nuanced migration of labor sourcing to locations that optimize proximity to both local markets and to diverse, agile sources of supply.

Wow: this is getting complicated! Well, not exactly. As Professor Scott Page (Complexity Science) tells us via a great video course in which I’ve been immersed 5 , it’s actually “worse than that”. “What’s more complicated than complicated”, you might ask. The answer is: “complex”.

Professor Page distinguishes “complicated” systems from “complex” systems (ultra-high- level, very-short explanation of a really involved concept) in that complicated systems have many interacting entities and dependencies (think automobiles), but they are “finite” in that they work the same way all the time. In contrast, complex systems (think automotive manufacturing) has many entities that are independent actors and can, therefore, upset a fragile equilibrium.

If you’re wondering about this time, “where is all this going” and how does it relate to the workings of current and future supply and fulfillment arrangements, take heart: we’re aaalllmost there!

Complicated systems operate in top-down mode (think orchestra). Complex systems, on the other hand contain independent actors who may, and often will, louse up your day (supplier shorts you on components; competitor grabs some of your market share, etc.). So here is the wonder of it all: because no one is “top dog” in a complex system, complex systems are, of necessity, bottom-up and work that way through constant adaptation.

This is what McKinsey was telling us in 2014 – and this is what Adam Smith told us in 1776. Smith’s “Invisible Hand” mediated the marketplace from the bottom up because the marketplace is a complex system.

And this is also what Daniel Hannan tells us in late 2021. Legislation such as that currently being proposed by some just won’t work. The marketplace has no orchestra leader.

Yours in Supply Chain,
Peter Canellis

Peter Canellis

Regards,
Peter Canellis
Professor of Management
Vaughn College of Aeronautics and Technology


Air Canada Cargo

Emirates SkyCargo wraps up a momentous 2021 with several industry-leading milestones

Emirates SkyCargo successfully navigated the complex landscape of the global logistics and supply chain industry in 2021 by focusing on its signature strengths and values- agility and responsiveness, customer focus, innovation, fleet and network capabilities. The airfreight division of Emirates notched up numerous milestones throughout the year, reinforcing its leadership position in the global airfreight industry.

"This has been without question one of the most challenging years for our industry as the pandemic continues to create difficulties across the entire supply chain and across all modes of transportation. However, Emirates SkyCargo has been a first mover in ensuring that trade lanes remain open by reinstating flights and providing additional capacity on key trade routes across six continents. We remain committed to offering the highest levels of service to our customers with safety at the centre of everything we do," said Nabil Sultan, Emirates Divisional Senior Vice President, Cargo.

Read more >>

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Gerry’s dnata expands offering; launches line maintenance services in Pakistan

Karachi, Pakistan, 13 January 2022

Gerry’s dnata, Pakistan’s leading ground services provider, has expanded its offering. The company obtained Maintenance Organization Approval from the Pakistan Civil Aviation Authority to provide aircraft line maintenance services to airline customers, and now offers a one-stop-shop of ground handling, cargo and technical services at the airports of Karachi (KHI), Lahore (LHE) and Islamabad (ISB).

Gerry’s dnata’s team of professionals can provide full line maintenance support and are trained on customers’ company procedures, providing a seamless service to both passenger and cargo airlines.

The launch customer is flydubai, which Gerry’s dnata already serves at four airports in Pakistan providing a range of ramp and passenger handling services to the airline and its customers.

dnata

Syed Haris Raza, Vice President of Gerry’s dnata, said: "As Pakistan’s leading ground handler, we constantly enhance our offering to best meet the needs of our customers. We are confident that our airline partners will welcome the expansion of our portfolio and take advantage of getting quality and safe ground handling and technical services from a single provider. Our team of highly trained, seasoned professionals will deliver world-class quality and safety for our valued customers."

Mick Hills, Senior Vice President of Engineering and Maintenance at flydubai, said: "We are looking forward to expanding our relationship with Gerry’s dnata to include line maintenance services in Pakistan. Having a single, local provider to oversee our line maintenance, as well as ground handling, will add more efficiencies to our fleet management and ensure a quicker turnaround of our aircraft."

Gerry’s dnata have the capability to handle the following aircraft types for scheduled, unscheduled and AOG services:

• Airbus A319/A320/A321 NEO (CFM LEAP-1A)
• Airbus A318/319/320/321 (CFM56)
• Airbus A319/320/321 (IAE V2500)
• Airbus A330 (RR RB 211 Trent 700)
• Airbus A330 (GE CF6)
• Boeing B737-600/700/800/900 (CFM56)

Over the past year, Gerry’s dnata has continued to enhance its operations and services to deliver the highest level of quality and safety and help airline customers safely transport passengers and precious cargo to and from Pakistan. It made significant investments in infrastructure, technology and equipment, including the opening of a new, state-of- the-art cargo facility in Lahore which doubled the company’s cargo handling capacity at the airport.

Gerry’s dnata’s quality of service helped it win or retain over 20 contracts with key accounts across its network. The company also achieved prestigious industry certifications, including GDP and IATA’s ISAGO accreditation, which validate its capabilities and place the business in a market leading position.

Gerry’s dnata serves more than 20 airline customers at seven Pakistani airports. The company’s team consists of over 2,500 dedicated aviation professionals who assist more than seven million passengers and handle 150,000 tons of cargo annually.


Turkish Cargo

Liege Airport sees strong growth

Grâce-Hollogne, 10 January 2022

In the midst of a year still marked by the pandemic for the airline industry, Liege Airport has seen strong renewed growth in 2021. Freight traffic reached 1,412,498 tonnes (+26%), as opposed to 1,120,643 tonnes in 2020. The growth in the number of daytime flights and the increase in multi-modality have continued, as has the number of humanitarian and pharmaceutical flights.

The 2021 figures for Liege Airport show a continuation of the trend seen in 2020, as CEO Laurent Jossart explains: “The global disruption of supply chains, and the lack of air- transport capacity in the holds of passenger aircraft, are trends that emerged in 2020 and that have also spurred our growth in 2021. Humanitarian equipment, the pharmaceutical sector and healthcare (masks, vaccines, medicines) are the main market segments.”

A multi-modal strategy that delivers


Together with all of its logistics partners, Liege Airport is now at the heart of a multi-modal strategy (air, road, rail, and waterways) that is paying off for Wallonia.

As Laurent explains, “Thanks to our multimodal approach, Liege Airport and the logistics sector had anticipated being at the centre of European cross-border trade. The growth in the amount of rail freight coming into the Liege Logistics terminal has been outstanding. Between them, the Liege rail terminals, which have connections to China, handled 16,103 containers in 2021, an increase of almost 70% over the numbers for 2020. That’s 172,893 tonnes, both for imports and exports (+66%), with significant growth in the number of full containers for export.”

Passenger traffic has also shown some signs of recovery, with 76,493 passengers, as against 44,487 passengers in 2020—a 72% rise. That said, this is still a long way from the 170,737 passengers we saw in 2019.

The number of aircraft movements has also increased, with 45,699 movements in 2021 (13.4% more than the 40,301 figure for 2020). The number of cargo-aircraft movements rose from 34,310 in 2020 to 38,393 last year, an increase of 12%.


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