Andrew Jillings, group chief executive of Tigers – the logistics and transportation company that specialises in bespoke supply chain solutions, e-fulfilment and transportation by air, sea, rail and road – believes that 2020 is going to be a challenge for the majority of those involved in air cargo, but is confident of his own company’s prospects.
“It won’t be easy, just as the airfreight market in 2019 was made difficult by a range of geopolitical and macro-economic issues in different regions,” he said.
“The world geopolitical landscape remains somewhat uncertain as we enter 2020,” Jillings observed, “which we anticipate will result in another challenging year for the forwarders and possibly the airlines.”
To a large extent most freight forwarders are reliant on the strength of the customers they ship for, and in many cases the verticals and trade lanes they have dominance in, he pointed out.
Thus, what impacts shippers can, and may well, also impact on them.
Yet Tigers, a mid-sized global forwarding and logistics group with a big focus on e-commerce fulfilment, expects its own e-commerce cross-border airfreight business to grow – and from the US especially.
Further geographical expansion will support this trend. Tigers is currently seeking to further grow cross-border services into Europe, the UK, Russia and India into Australia and New Zealand.
From China, it is launching a cross-border parcel airfreight business into Europe in January in co-operation with Chronopost in France.
“We see a growing trend of pallet to parcel in several of our key markets and as cross-border e-commerce continues to expand globally, we anticipate continued volume growth in this vertical,” Jillings confirmed.
Elsewhere, other goods categories represent other sources of growing business. For example, Tigers is handling greater volumes of perishable exports from Australia, while airfreight exports to China in the form of chilled meat are on the up.
In fact, for Tigers, the export of chilled lamb carcasses by air has enjoyed of late the greatest growth by commodity and destination.
Changes in taxation regimes have a significant impact on such trade. “As commodity tariffs continue to reduce as a result of the free trade agreement between Australia and China, we anticipate that perishable export volumes will continue to increase into China, although yield will remain a concern,” Jillings remarked.
Diversification
This year, the Australian Government brought in legislation that made all export air cargo subject to 100% piece-level screening, regardless of route, aircraft type, airline and destination.
“Tigers saw this as an opportunity to increase business and offer a wholesale screening service to the industry,” Jillings informed, and the company became an accredited Regulated Air Cargo Agent (RACA) offering a 24/7 operation to screen/clear and deliver all cargo types using the approved methods of screening: Primary Screening – EMD (electronic metal detection) , X-ray and secondary screening ETD (explosive trace detection).
Last year, in 2018, Tigers launched its SmartHub:Connect platform, which offers customers global visibility of their international transportation and inventory levels in e-commerce facilities, as well as final mile visibility.
Tigers recently added purchase order visibility to the transportation module of SmartHub:Connect which it said is “gaining traction with customers in several key markets”.
Of this sort of technological development, Jillings noted: “Digitalisation and e-commerce are impacting and significantly changing traditional supply chain models and Tigers remains totally committed to this digital revolution and will continue to enhance its visibility offering to customers.
“Our SmartHub was built in .Net and is cloud-based using Microsoft’s Azure firewalls, which makes it an attractive offering for companies entering into the e-commerce environment as we offer omni-channel fulfilment, cross border parcel fulfilment, final mile and returns as well as international transportation.
“More and more we see progressive companies looking not only at price but at technology, which we believe bodes well for us in 2020,” he added.
Of course, there will be challenges and hurdles to overcome this year.
“In 2020 we do not see any significant change from this year and should the trade war between China and the USA continue to escalate, we could see challenging capacity issues emerge in several of the South East Asian markets,” Jillings opined.
“Another issue is Brexit. A hard Brexit could present a number of difficult scenarios particularly for the trans-shipment market and nothing is certain at this point.”
But, “What does seem certain is that yields will remain under pressure,” he concluded.
In October, in the first of Air Cargo News’ ‘How To’ series, Jillings noted that logistics companies should embrace disruption in the digital age. That piece can be found here.
