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Why building a connected cargo ecosystem is such hard work … but worth the effort

The cargo industry has shown a growing appetite for digitalization over the past years. One which has been reinforced by the new (digital) ways of working imposed by Covid—19. While cargo actors are increasingly turning to technology to build a connected cargo ecosystem, doing so successfully often remains a challenge. Let’s look at 4 key hurdles to success and how to overcome them.

According to McKinsey, “when organizations come together to share and manage data, they can create value far beyond what would be available to the individual partners”. We could not agree more. Their study “Four ways to accelerate the creation of data ecosystems” zooms in on the key benefits that can be achieved by building a data ecosystem – and the possible hurdles on the way. A close match with what we have identified working with cargo communities around the globe. Let’s explore the main hurdles we have identified and how you can avoid them.

4 key hurdles - and how to overcome them

1. One-fits-all doesn’t work

A cargo ecosystem consists of many players: ground handling agents, freight forwarders, trucking companies, airlines, customs, food safety agencies, … Each one having its own challenges and attention points when it comes to optimizing cross-company processes. Trying to answer everyone’s needs from the start, with a one-fits-all solution, is doomed to fail. Companies will step in based on the perceived value-add for their business, not for the benefit of the community. As a monolithic solution only starts generating benefits once everyone is on board and using all functionality, the time to benefit will be too long. Whereas to motivate parties to step in such a community approach, the so-called carrot for their business needs to be big enough, and within direct reach. In other words, companies should be able to adopt a solution that focuses on a business case that is relevant for them and can generate first benefits fast. It’s therefore recommended to start with a small group of users around a specific business case and add more functionality (and users) later on. As stated by McKinsey: “By starting small and scaling later, building on proven technology and evolving the data model as they progress, and involving partners early on, organizations can dramatically lower risk and accelerate implementation.”

Companies will step in based on the perceived value-add for their business, not for the benefit of the community

2. Different levels of digital mindset

The different companies at a cargo hub a likely to have different mindsets when it comes to digitization. Some might already have pushed digital transformation to the next level within their companies, others might still be operating quite old-school and holding off on digitization. Getting them all on board together will result in a process that is by definition going too fast for some and too slow for others. You want to select some digital-minded parties to take the lead instead. Have them elaborate the first business case, implement it and share successes - thus allowing them to set the example for and inspire others.

3. Compatibility with existing systems

“Don’t reinvent the technology wheel”, says McKinsey. True that! When performant systems and processes are in place, a full system overhaul is throwing out the baby with the bathwater. Massive benefits can be achieved when new technology complements existing, by adding functionality the legacy systems can’t provide.  This facilitates adding new or reinforcing existing processes, as they tap into and enrich existing data and processes. And it facilitates user acceptance, as familiar systems will remain in place.

Massive benefits can be achieved when new technology complements existing, by adding functionality the legacy systems can’t provide.  

4. Technology alone is not the solution

You cannot build a connected cargo ecosystem with technology alone. Whereas solid technology to enable secure and easy data sharing is crucial, stakeholder management is at least as important.  Bringing different actors together in a connected ecosystem requires clear agreements on governance (e.g. how will systems being used, what are the penalties for misusage, who will pay for what, etc). In addition, it requires close follow-up and support throughout the process, from informing stakeholders and inspiring first users, to accelerating onboarding, to stimulating correct usage. Just making the technology – however powerful - available and presuming everyone will start using it (correctly), is wishful thinking. Also, beware of digitizing existing processes and documents - spend enough time on analysing the existing and desired situation, and build your processes to the digital capabilities that are out there. Building a connected cargo ecosystem requires change management and digital transformation, a process that does not happen overnight nor without steering and guidance.

Beware of digitizing existing processes and documents;  build your processes to the digital capabilities that are out there.

To conclude

Is it all then impossible? Not at all! It just requires the right approach, expertise, technology,  and effort – as described above. When done right the benefits for both the individual parties as the entire ecosystem are unparalleled. With cross-company processes running smoothly, together an ecosystem can generate benefits in terms of efficiency, visibility, and transparency no single company can reach on its own. Which makes all the effort worthwhile.

Nallian is assisting airports, cargo communities and single entities on their road to connected & intelligent work.
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