API Based Air Cargo Ecosystem in the Future
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At a simple level, an API is a set of programming instructions and standards for accessing a web-based software application or tool. They are the sets of requirements that govern how one application can talk to another. APIs, in turn, are modern day equivalents of real-time chat applications like snapchat, WhatsApp and so on - systems that are connected in real time with near zero delays between request and response.
For instance, a travel company develops and makes available an API so that other travel companies can send information requests to its systems, and of course receive the replies, usually containing dynamic information such as prices and availability. By building their own APIs, suppliers are almost becoming direct-to-consumer distributors of their own products, offering their own sites or apps to book on, and possibly marketing through a metasearch engine.
It is easy to think of APIs in this context as doors that let transactions and data in and out of a Web service. Like doors, they only swing in a certain way at a given time and they are typically open only to those applications that have keys to the lock (i.e. the rules or passwords). An API is a software-to-software interface, not a user interface. With APIs, enterprise applications can talk to each other without any user knowledge or intervention.
An example of how API's have transformed an entire industry is the evolution of digital payments in India. The introduction of UPI (Universal Payment Interface) helped transform serpentine queues in front of banks and a largely cash-based economy into digital payments that gets money transfer done in less time that it takes to type out a
message on your smartphone. In the banking industry, self-service has become the new normal with digital wallets net-banking and ATMs practically eliminating the need to physically interact with a bank or its representatives anymore. The question is what new technology will make communication even more instant? Will the screens turn obsolete soon? The future is exciting and unpredictable.
If we draw a parallel with this transformation in business communication, digitalization made possible endless opportunities in the aviation industry as well. The Airline industry is in the midst of the digital revolution - underpinned by constantly evolving networks of service providers and APIs – the plumbing of the global travel industry is slowly becoming more and more interconnected and real-time – e.g. communication links and API connectors between merchandising platforms, loyalty systems, central reservation systems, global distribution systems, industry transaction hubs and gateways, etc. IATA's NDC (New Distribution Capability) is a great example of how airlines can share their data with airports, travel portals and other developers via APIs and in turn, transform their offerings to much more than just a seat on a plane.
Cargo industry status quo: Then and Now
International shipping has been around for many centuries. From the earlier eras, this is an antiquated, paper-based process that stopped making sense when jet travel was invented. A large quantity of information is exchanged between actors of a complex supply chain. The onset of EDI decades back provided a much-needed framework for electronic transmission of data, but the adoption of such standards – even in today's hyper-connected world remains woefully low. Unfortunately, the industry still relies largely on paper to transport that information suffering from many limitations including poor data quality, incomplete coverage of data elements, lack of common data standards etc.
Technology has also since moved on, and a lot of what cannot be done using traditional EDI can be delivered with proven alternatives such as APIs. Imagine a global standard that allows air cargo carriers, shippers, forwarders and service providers such as GHAs to interact freely and in real time, transmit data including rich entities like images and media and get instant feedback. It would transform the air logistics business to an extent that seems unimaginable in today's world!
Digitization is the only possible method to oversee the process and ensure that goods arrive at each point on the way. The role of API comes here- to effectively manage the supply chain for the cargo ecosystem which includes purchase orders, prices, quantities, and so on. The goal is to minimize the amount of human interaction necessary and make the flow seamless.
The Roadmap to a Digitally Enabled Cargo Industry
The roadmap to the adoption of such global standards for digitizing the integration between air cargo supply chain partners needs to be addressed at two levels – the industry as a whole and within each supply chain partner enterprise.
In 2016, IATA launched Simplifying the Business (StB) Cargo Transformation program with transformational initiatives such as driving up the adoption of electronic data through the introduction of industry-wide tools and standards like e-AWBLink, eAWB360, Message Improvement Program (MIP2.0) and Cargo XML. This approach needs to be taken further into creating global standards for digital interchange such as with APIs. The Cargo ONE Record initiative spearheaded by IATA is a further step in this direction that aims to create global standards for end-to-end supply chain data connectivity. It defines common data dictionaries and connectivity standards using API technology. The industry needs to get on board with such initiatives and give it much needed momentum through rapid adoption.
At an enterprise level, air cargo supply chain providers like carriers, Ground Handlers, Airports, regulatory bodies, forwarders and other service providers need to think ahead of the status quo in terms of simple EDI and instead try to 'leapfrog' into the future by adopting future focussed technologies like APIs. This is by no means a simple task in today's circumstances given the antiquated systems and technologies that most of the industry still relies on. The time is ripe for transformation and the ones that seize the opportunity and equip themselves to thrive on this future state – with digitally enabled capabilities will soar to the skies.
The transformation – much like the digital revolution that has taken root in the banking industry will become the new status quo in the foreseeable future for supply chain and logistics and the ones that are equipped to ride this wave will be able to tap into capabilities that others will not. It is hence of paramount importance that air cargo service providers critically evaluate their current IT capabilities and build an effective roadmap to be equipped for this transformation.