Tech companies Freightos and cargo.one are leading the push for fully digital air cargo marketplaces where freight forwarders can quickly compare live rates and capacity, and instantly book a shipment.
So far, only a handful of airlines have made the technology investments required to connect with the third-party platforms, but on Tuesday, Freightos said the cargo arm of Scandinavian Airlines will sell freight space through its WebCargo subsidiary.
More than 1,600 logistics companies and other users are on WebCargo, and they collectively are responsible for more than 30% of global air cargo by tonnage, according to Freightos’ Nov. 26 announcement.
Application programming interfaces, which essentially enable back-office systems to talk to each other, are the key piece to the real-time transactions. As reported here last week, automating the booking process is not yet commonplace among air cargo carriers but is seen by key early adopters as a service differentiator because it can take the friction out of freight transactions.
The advantage of automatically connecting the forwarders’ transportation management system with airline reservation systems is more predictable, transparent pricing and capacity information that can be confirmed instantly, as passengers are used to when booking tickets. But in the air cargo industry, most online booking is still manual because the carrier must manually confirm the price and booking in the system. In many cases, phone calls and emails are also required to finalize a booking.
When combined with shipper turnaround times, the process adds up to two or three days to shipping, according to WebCargo. In addition to making life easier for forwarders, the WebCargo system also lets them view live spot-market rates side by side with their negotiated contract rates.
Many airlines offer static rates through WebCargo, but so far only Lufthansa Cargo, Air France-KLM, IAG Cargo and United Airlines just enable electronic booking. Lufthansa also is directly connected to cargo.one, along with seven other airlines. And Lufthansa additionally offers forwarders the ability to use an API for one-to-one communication with its revenue and capacity management system.
SAS Cargo said WebCargo is another way it can make the customer experience a priority. It already secures 80% of its transportation orders through its own online booking site.
“This expands our visibility worldwide and perfectly builds upon our established digital products and services, like instant booking confirmation, dynamic pricing and a fully automated and digitized document manager, making them available for a broader audience,” Martin Dellepiane Larsen, head of network and revenue management at SAS Cargo, said in a statement.
Freightos, which also offers a multi-modal rate management system, acquired Barcelona-based WebCargo in 2016. Founded by serial entrepreneur Zvi Schreiber, Freightos has raised $94.4 million from leading venture funds, including GE Ventures and the Singapore Exchange.