Encyclopedia
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Subjects:
Management
The air cargo logistics industry is part of the services offered in the aviation sector. The industry fulfils a segment of the supply chain system for the seamless distribution of goods to meet consumers’ demands.
- technological innovations
- air cargo
- technological adoption
1. Introduction
This study defines air cargo as goods carried by aircraft, whether chartered or commercial, under customs-bonded airway bills. Many scholars, such as [1], have referred to air cargo as a by-product of passenger traffic, where airlines traditionally load cargo into the belly holds of their passenger aircraft. Air cargo operation is observed as an efficient means of transportation because of its capacity to handle high-valued and time-sensitive goods [2,3]. However, the turn of global events resulting from the COVID-19 pandemic and the booming e-commerce demand have reshaped the outlook of the air cargo logistics industry for the future. The International Air Transport Association [4] emphasised how e-commerce accelerates transformation in the global air cargo logistics industry with 15% of volume in 2019 and 18% of total retail sales in 2020.
Ref. [5] compared cargo volume for February 2019 with February 2018 and stated that the air cargo industry experienced a weakened demand, with a fall of 4.7%. Ref. [5] also reported that the air cargo market capacity increased by 2.7% yearly. The record shows that it was the slowest annual growth rate in three (3) years. In contrast, other studies had anticipated that air freight volumes would continue to increase by around 3% annually until 2025 and likely after 2030 [6]. According to [7], air cargo traffic will increase by 4.3% annually for the next 20 years.
Recent technological advances are poised to impact air cargo operations for efficient supply chain management to ensure the seamless distribution of goods with automated coordination of air cargo flow. For stakeholders in the logistics industry, digitisation with ICT and IoT is becoming unavoidable [8] for seamless supply chain operations in air cargo distribution. The requirement to adopt new technological innovations has prompted severe concerns for stakeholders in the air cargo logistics industry. The concerns border on the reluctance for the prompt adoption and implementation of emerging innovations in the industry due to the cost of technological acquisition and negative attitude to change. Nevertheless, the impact of technology on industries worldwide cannot be overemphasised. Its influence is highly significant to have transformed how companies conduct their businesses. The air cargo industry is no exception, as emerging technological innovations are fast becoming major driving forces. Thus, stakeholders in the air cargo logistics industry are under severe pressure to digitise their current operations to remain relevant due to the increasingly widespread technological innovations [4].
Notwithstanding, the reluctance to adopt and implement emerging technological innovations in the air cargo logistics industry prevails [9]. As a result, the air cargo industry is often lamented as lagging in digitisation behind passenger air transport [10]. The air cargo industry is slow to adopt digitisation to modernise distribution although technological applications are required for data and cargo management systems across all distribution stages [11,12]. Similarly, ref. [13] stated that adopting new innovative technologies continues to be slow and less than optimal across organisations. The traditional human behaviour to resist change [14] and the huge cost of acquiring new technologies account for the attitudinal reluctance of air cargo stakeholders to adopt and implement new technological innovations promptly.
2. Effects of Technological Applications in the Aviation Logistics Industry
The logistics industry is broad, with studies focusing on the need to apply technological applications in different aspects of operations such as RFID adoption [21], technology forecasting framework [22], inventory management [23], humanitarian logistics [24], digital marketing [25], digitisation [26], automation of warehousing [27,28], supply chain management [29], and [30] explored the implications of adopting industry 5.0 for smart logistics, etc.
In the aviation sector, most studies focus on the effects of technological innovations on airline operations. For example, ref. [31] found that technologies significantly influence air transport’s safety, efficiency, capacity, capability, environment, and financial outlook. Ref. [32] also found that digital technology applications impact airline operations by enhancing passengers’ flight experience. Ref. [33] stated how technological innovations have helped reshape the aviation industry by making it more efficient, safe, sustainable, and agile. Ref. [34] examined the effects of innovative technologies to provide comfortable, smart, and safe air travel in Asia. The passengers’ perception of technological innovation and adoption during the COVID-19 pandemic was assessed by [35] in China and emphasised the effects of technological adoption on improved airline service delivery.
For the air cargo industry, there is a scarcity of studies focussing on the problems of adopting technological innovations in the air cargo logistics industry. However, studies have also emphasised the effects of technological innovations in handling and distributing cargo. For example, ref. [36] stated that emerging technological innovations have become an important part of cargo delivery for integrating supply chain operations due to globalisation. Ref. [37] affirmed that technological applications in air cargo supply chain management serve as a digital solution to simplify distribution processes. Ref. [38] also highlighted the effect of applying digital technologies in the cargo shipping business. The effect of applying blockchain technology in utilising airport resources for optimal service delivery was identified by [37]. Information technology infrastructure can provide a platform for all agents in the air cargo industry to collaborate online for service delivery [12].
Specifically, empirical studies that relate technological innovations and their effects on air cargo operations are lacking in South Africa. It implies that researchers in South Africa have not considered the benefits of the air cargo industry to the country’s development. Ref. [39] recently examined the effects of 4IR technologies adoption in the South African airline industry on the dynamics in the labour markets. Also, ref. [19] examined the surviving strategies of the South African airline industry with the adoption of smart technologies. The studies were devoted to the airline industry and imply the need to fill a knowledge gap about the effects of adopting technological innovations in the air cargo logistics industry in South Africa.
3. The Air Cargo Industry in South Africa
The air cargo industry in South Africa is versatile and contributes substantially to the growth and development of the country. South Africa has the United Arab Emirates, United Kingdom, Kenya, Qatar, and Germany as the busiest air cargo routes [40]. The air freight industry in South Africa generated a huge sum of 5.1 billion Rands in 2016 to contribute substantially to the country’s economic growth [41]. In 2021, the South African air cargo industry had a total revenue of USD 0.2 billion [42]. South African airports’ cargo traffic ranked second after Egypt in the African continent [43]. Three (3) major implications for the air cargo industry in South Africa are: 1. there is major air trade and exchange between South Africa and other countries in Asia, Europe, and within the African continent; 2. the air cargo industry significantly contributes to the annual revenue and growth of South Africa; and 3. South African air cargo traffic is substantial for trade and exchange in Africa.
The implications indicate the importance of the air cargo logistics industry to economic development. It also shows the connectivity of the distribution of goods across the world’s continents for global trade facilitation. It finally reflects the importance of cargo traffic to airport and airline operations. The implications provide the need for studies that focus on the air cargo logistics industry in South Africa, as it not only contributes to the country’s development but also influences the global trade relationship and promotes airports and airline operations.
This entry is adapted from the peer-reviewed paper 10.3390/logistics7040084
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