American Airlines (NASDAQ: AAL) postponed most projects and slashed spending when the coronavirus pandemic wiped out passenger travel, but reengineering its cargo management system has proceeded without a beat. And it’s already proving to be a timely upgrade.
In October 2019, the airline picked IBS Software to be the backbone of its new cargo system. The iCargo platform supports all aspects of American’s cargo sales, operations, customer service, and accounting. The goal is to provide more efficient online channels, better tracking, greater efficiency in warehouses, and a robust back-end system.
Angela Hudson, who leads the IT transformation at AA Cargo, said the new system is expected to be completed by the end of summer.
When COVID-19 began restricting global travel and airfreight earlier this year, American and its customers quickly recognized the value of the new air cargo technology.
“It was difficult to conduct testing virtually on a project that does require so much teamwork and collaboration across work groups,” she said. “But this work-from-home setting made it clear just how important enhanced technology abilities truly are.”
While Hudson said American would have preferred to roll out its new system’s capabilities in the pre-COVID-19 environment, limited services offered during the pandemic offered full volumes on both cargo-only and passenger flights.
“It’s been a positive opportunity to test full flights on a smaller scale,” she said. “Slower volume has allowed [cargo] stations more time to test the new features and get comfortable with the changes, all with lower business risk.”
100 to 10
American Airlines, Fort Worth, Texas, began the multi-million dollar modernization of its antiquated air cargo systems three years ago.
“We had to overhaul nearly 100 systems down to about 10,” Hudson told American Shipper. “That’s a daunting task.”
Previously, whenever the airline needed to meet a new air cargo IT challenge, it bolted programs onto its existing system.
“It’s an industry very set in its ways,” Hudson said. “Things worked a certain way for a long time, and there was not the same momentum we saw in other industries to prioritize and expedite technology modernization.”
As the carrier’s systems aged, it became much costlier and difficult to program changes, if they could be made at all. Even making a minor change to a freight product or a customer notification option required extensive work in multiple systems.
“The reality is that consumer expectations today are completely different than they were a few years ago,” Hudson said. “As the bar for expedited shipping rises across consumer services, cargo carriers have to adapt in order to maintain a competitive offering.”
Hudson said the cargo systems transformation at American was the largest and most complex she had undertaken in her IT career. It involved more than 700 people across 300 global locations, in addition to more than 150 business, technology and vendor participants.
Hudson said the IBS Software system offers American’s cargo staff “easy-to-use” dashboards that identify potential shipment breakdowns with color-coded indicators and countdown clocks. She said these new capabilities “help us get ahead of potential issues and keep shipments on their planned path and at destination as promised.”
The new platform has also allowed American to automate lingering paper-based steps. This includes, for example, American’s truckload manifests that are now shared digitally rather than printed. Other improvements include an online, interactive claims form that expedites the approval process; increased use of scanners and tablets; and ability to upload documents needed for bookings, rather than printing and handing off at tender, Hudson said.
However, the iCargo platform has not conquered 100% of the paperwork involved in global airfreight transportation.
“While much can transition from paper to digital, there are still some systems that are hard to digitize, particularly when dealing with customs and the varying requirements for each country,” Hudson said.
Just the beginning
Freight forwarders and shippers have taken notice of recent airline investments in airfreight management systems.
“Many carriers are increasing their investment in technology despite the current virus-related challenges so that they can stay current and meet increasing demands when volumes return to normal levels,” said Brandon Fried, executive director of the Washington, D.C.-based Airforwarders Association. “Consumer expectations today continue to evolve and are significantly different from those of just a few years ago. In addition to reliable service performance, customers now expect ease of booking, schedule searching, shipment status, and quick claims handling that this technology promises to provide.”
Last July, United Cargo (NASDAQ: UAL) joined with Freightos’ WebCargo to build a new online portal that provides forwarders with expanded on-demand booking, pricing, and real-time updates on the carrier’s global cargo network.
Two years ago, Atlanta-based Delta Cargo (NYSE: DAL) relaunched its website with improvements to online freight bookings, tracking and check-in from any computer device. In 2019, the airline also expanded its use of Bluetooth-equipped cargo pallets and containers to provide real-time cargo visibility across its network.
(Click for additional American Shipper/FreightWaves articles by Chris Gillis.)