Digital Transformation of Air Cargo: Barriers and Opportunities

Abstract

The topic of this thesis is digital transformation of air cargo, and this research aims to identify drivers and barriers of change as well as solutions for the future. Main themes of this research have been visible in form of new innovations, articles and researches as well as from an industry bodies such as IATA, for some years now. There have been efforts within the air cargo industry to move towards a more digital world, but still adaptation lags behind and funding is limited. At the same time e-commerce and COVID-19 are transforming the air cargo industry with challenges requiring rapid changes. Literature review of this research consists of knowledge on air cargo and air cargo supply chain, first providing knowledge of the value of air cargo, forces and constraints for growth followed by introduction the common concepts, processes and stakeholders. Most importantly, literature review explains the data transfer within the air cargo supply chain and provides some examples of future digitalization of the air cargo industry. Literature review is based on industry articles and researches conducted. Research methodology consists of qualitative in-depth interviews conducted with aviation industry professionals, with decades of experience from different parts of the air cargo supply chain. Interviews were conducted during the fall of 2020 and sample size for this research was five participants. Based on the results from the interviews, the most common drivers of change were the rapid rise of e-commerce and the current COVID-19 pandemic. Most notable problems were fragmentation of the supply chain as well as lack of funding for new innovations and developments. However, also solutions for these problems were identified in forms of data- sharing and collaboration. These factors create many opportunities and the literature review of this report introduces the shift from traditional EDI systems used in air cargo into APIs as the enables of collaborative supply chains of the future. Data sharing being one primary solution as it hosts major opportunities in the shift from fragmented arcanely lead industry into transparent and collaborative future. In aim for a brighter future and digital transformation, air cargo industry has seen global standards set, partnerships created and innovations formed.