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The need for collaboration and integration: how resilience reinforces need across air transport supply chain

by jcp

By Randel Darby, CEO and Founder, AirPortr

In 2020, the pandemic bought about a series of opportunities for investors – the ‘unprecedented times’, a term which we all heard many times over throughout 2020 and 2021, gave way to the top two years ever of venture investment. Things like digital consumer services, for instance, continued to rise in popularity off the back of the pandemic-imposed lockdowns: there was a boom in services providing convenience ‘at home’ from on demand grocery delivery to streaming services.

When looking back at 2022, and the turbulent year we have all experienced – steep rises to inflation, a global energy crisis, volatile current affairs and a slump in public markets – it’s no surprise that one of the biggest impacts we have seen has been on the pace of investment across the global tech scene.

For the first half of 2022, all signs pointed to another major year of investment, with deals down only slightly on Q3 and Q4 2021 but on par with Q2 2021. However, the third quarter of 2022 saw investment deals slump to $90 billion (53% lower than the same period in 2021).

The dramatic pullback was expected by many, and is one which we are still experiencing the impacts of. Various tech businesses the world over are going through rounds of redundancies and restructuring, making changes ahead of what will be a very difficult and trying few years of economic downturn.

The shining beacon on the horizon

The global supply chain tech sector is one sector which has not been as heavily impacted by this setback. So far this year, funding is on pace to roughly equal 2021’s record setting levels, as its clear investors see an enormous market for next gen platforms to ease current consumer and business pain points.

On the one hand, COVID accelerated demand for products, services and consumables which had a dependency on global supply chains. With people confined to homes, consumers were all of a sudden forced to change their purchasing behaviours. More and more relied on services that could deliver to their front doors, opening up a wave of opportunities for businesses to diversify into services they had not considered before.

But what was a clear opportunity for some unfortunately shed light on the fragility of global supply chains. Demand for goods high but the pressure on the supply chain to keep up with demand was strained. In many places, the dependency on non-digitalised and manual processes became too much. And when posed with a shortage of staff and labour – both accentuated by the pandemic and Brexit – increased volatility and cracks in the supply chain started to show.

The pandemic exacerbated the inefficiencies and wastage across the industry. It was clear a digital revolution was needed. Logistics and supply chains found they needed to start thinking about new technologies that could help facilitate changing consumer behaviours whilst matching demand peaks. This bought a wave of mega investment rounds for things like autonomous delivery mechanisms, AI powered platforms to optimise logistics, and big data and analytics solutions to help with supplier performance.

By implementing this new tech, organisations can identify the possible impacts of various disruptions and demand changes, and plan accordingly to support. According to Gartner, supply chain organisations expect the level of automation and AI in their supply chain process to double over the next few years. And with mounting expectations from consumers around speed and efficiencies for goods, services and consumables, these technology advancements are a must.

The need for collaboration and further investment is a must

Investment across the supply chain, whilst seemingly abundant at the moment, needs to continue if there is going to be real progress made. When looking specifically at air transport supply chain tech for example, one needs to merely glance at the chaos experienced in summer 2022 within the industry to understand how much of an impact legacy infrastructure and lack of tech collaboration has had on process improvements and consumer confidence.

In order for the industry to solve current pain points, greater collaboration and integration amongst partners and agencies is a must if the aims of becoming a forward-thinking, digitally advanced behemoth are to be realised. We know that passengers are willing to take advantage of technology and re-think processes to improve the convenience of their airport experience – including sharing of immigration information, biometric data instead of passports and boarding passes, home pickup and delivery of baggage and remote check-in to name a few.

A smooth and seamless experience when travelling abroad may feel out of reach for those who have travelled in 2022. But airlines and airports are already starting to use tech for things like digital identity management, facial recognition in place of passport checks, as well as virtual queueing and digital landing cards. These new systems have made a real difference in reducing queues and waiting times at the airports, alleviate the pressure of manual work felt by staff and free-up resources and space within airports to create an improved customer experience.

The next hurdle, however, will be in the collaborate and implementation of these systems globally to support not only passengers, but also bags, at every step of the journey. The bag presents a reasonably sized logistical challenge for operators to handle – it was exposed to be one of the more ‘broken’ elements of the journey in the last 12 months. As we experienced the summer of chaos, with baggage piling high in reclaim halls, lost luggage featuring heavily in news headlines and passenger confidence knocked as more and more were told to expect issues and delays when travelling with baggage.

Even simple fundamentals like end-to-end bag tracking present a gap in the market currently. IATA‘s recent GPS survey reported that 81% of passengers said they would be more likely to check a bag in if tracking was made available. Whilst there are some organisations working with partners to support tracking, the uptake across the industry is low. For instance, United Airlines currently offers tracking on all passenger baggage, which can be traced through an app so passengers can follow and receive updates on the whereabouts of their bags as they travel. And in a recent trial by the team at Toronto Airport with Copenhagen Optimisation used real-time load data of bags along with the size of and likely land time of aircraft to dynamically allocate space on baggage reclaims. But still these are solutions done in silo and not industry wide.

If the industry were to come together to connect the dots across the passenger journey, using technology to support in the flow of things like baggage through the airports, these issues and pain points could be alleviated.

Technology and digitalisation development are key to make sure any sector prospers, but in an industry currently laced with legacy infrastructure, there is much more work to be done.

That is why continued investment is needed, to meet current demand, improve collaboration and integration, and enhance the passenger experience. This is a challenge, as typically VC money doesn’t like the sector. They see clients as being slow moving and bureaucratic. It is a heavily regulated industry with many layers that need penetrating in order to make change. On the other hand, the industry doesn’t typically like working with start-ups – the organisations who typically offer digital innovation solutions – because whilst most airport innovation is incremental, tech incumbents have a proven track record whilst providing all-in-one solutions that most start-ups cannot provide.

But will the current situation precipitate a change on both sides? The opportunity and need is clear, but only time will tell.

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