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Disruptive Technology – ULD Tracking

Disruptive technology-driven trends are impacting the air cargo industry and will continue to do so over the next few decades. Key trends include Bluetooth ULD tracking, connected suppliers, and digitization. These trends are not only reshaping the air cargo industry but are actually fostering convergence of the air transportation and technology industry.

Multiple types of container tracking have been introduced recently, including Bluetooth, RFID, and GPS. This article – the third in a series of five published over the last twelve months – explores the potential impact of ULD tracking, especially of Bluetooth, on the fundamental structure of the air cargo industry and examines how this profoundly alters the I2H (Inbound to Hub) ULD in-transit visibility. Combined with predictive analytics, powerful SaaS (Software as a Service) tracking applications should cause you to rethink everything you know about the air cargo industry.

ULD Tracking and Connectivity Gathering Pace

The Internet of Aviation Things – Rapid advances in Information Technology have now reached a stage where we can no longer sit still and wait.

Today, human beings must be capable of interrogating material objects, e.g. ULDs, and that ULDs communicate with cargo reservation systems, warehouse operations and/or load & balance systems. Furthermore, ULDs communicating with each other as well as other aviation equipment and infrastructure, e.g. tugs, buildings, locations, etc., means we are connected. ULDs communicating with the aircraft, e.g. load contents, temperature (for safety reasons and/or product assurance) is the next step. The future is everything communicating with everyone using the technology we already all have (mobile phones, tablets etc.) Proactive alerting regarding all elements of the value proposition – location, temperature, shock, tampering, chain of custody, safety and security closes the information gap.

New Components Changing Industry Structure

Bluetooth technology is FAA compliant. The transmitter goes to sleep when not in use (airborne). Collapsible ULD’s are cutting repositioning costs. In addition, because it is essential to reduce weight – new ULD’s are built using composite materials such as aluminum and carbon-fiber-reinforced polymers.

The change in components, ULD tracking and predictive analytics are a root cause for the anticipated re-structuring of the air cargo industry. Some parts will be supplied by companies that are new to this sector. As these organizations start to enter the industry, suppliers of newly obsolete components need to innovate and re-shuffle their portfolios in order to remain competitive within the industry. And the arrival of new SaaS tracking solutions, predictive analytics, raw materials components and new players on the air cargo scene is sure to change the net depth of value added by incumbent players, as well as the distribution of profit among them.

The component suppliers to watch closely are ULD manufacturers. These organizations may be able to reap a significant share of profit per ULD using Bluetooth hardware and associated SaaS, given the importance of tracking technology and the fact that knowing where your cargo and mail are represents a large percentage of the customer satisfaction component. For example, early adopters of ULD tracking technology have seen immediate reductions in misroutes, lost/damage claims and recovery costs for out-of- position equipment.

Tracking and Predictive Analytics Driving Competitive Edge

OEMs (original equipment manufacturers) and incumbent air carriers need to improve their competitive position by partnering with this new class of critical ULD tracking IT suppliers. In the past, OEMs, Integrators and Combination air carriers achieved competitive advantage from a product perspective through superior network performance, efficiency, and on-time delivery. But in future, much will depend on ULD tracking/SaaS technology, particularly the relative merits of ULD control, ULD distribution, in-transit visibility, and reduced claims. Thus, OEMs, Integrated air carriers and Combination carriers will draw on SaaS predictive analytics specifications to differentiate themselves and achieve competitive edge. The key question is will they make their own ULD tracking applications or buy them?

Currently, OEMs, Integrated air carriers and Combination carriers are using some different strategies. ACL Airshop is partnering with CORE Transportation Technologies. With this business model, ACL Airshop is seeking competitive advantage through proprietary Bluetooth tracking ULD technology. UNILODE is championing “Smart ULD’s” and building hardware and software internally. AIRBUS is proposing several connected user interfaces, one of which is “Cargo Conn@ct Cluster” another in-house development possibility. With this strategic approach, OEMs are hoping to achieve competitive advantage by benefiting from economies of scale from purchasing latest-generation ULD tracking at reasonable prices from specialized manufacturers. OEMs that follow this approach may also aim for achieving competitive advantage by developing proprietary technology in packaging multiple predictive analytics into ULD tracking modules and building proprietary web based SaaS graphic user interfaces.

The near future will reveal whether both strategies can co-exist or whether one strategy has significantly greater potential to secure competitive advantage.

Making Moves in the Supply Chain

All of these structural changes in the air cargo industry are impacting the supply chain. There are new stakeholders and new flows in the air network ULD operational control. Which OEMs, Freight Forwarders, 3PLs, Consolidators, Internet Trade Platforms or On-Line Marketplaces (Amazon, Alibaba) will partner with air carriers to establish origin, hub and destination – entire network ULD tracking capability?

By Glen Gates
Gates Aero, LLC