Digitalization has arrived in air freight and has translated into tangible results across multiple airlines. In partnering with multi-airline booking platform cargo.one, Finnair Cargo has achieved industry-leading digital booking numbers on a third-party channel in a short amount of time.
The market situation
Some carriers are paving the way in digital distribution with a comprehensive transformation strategy. In doing so, they are answering the industry's calls for action, while at the same time catering to forwarders’ evolving requirements. Customer expectations are shaped by retail experiences in other industries. This fact has become abundantly clear in the uptake of those digital booking offers already available in the market.
One of the well-known frontrunners, AFKL, announced recently that 23% of overall cargo revenues are booked via the in-house myCargo booking tool, while Etihad Cargo has grown online booking rates to 33.7% over the past year. SAS Cargo continues to set an aspirational benchmark for digital booking penetration with over 85% of all bookings made online in 2018.
Finnair’s success with cargo.one
Next to investing in proprietary solutions, such as the above examples, Finnair Cargo decided to partner with cargo.one in early 2019 as a result of its customer-centric, multichannel strategy.
Shortly after going live, the partnership has already started to bear fruit: Seven weeks following the launch on cargo.one, Finnair achieved 27% of general and express cargo bookings in Germany and 15% in their home market of Finland via the platform.
cargo.one enables Finnair to adopt a multi-channel approach and to serve customers digitally. This new distribution channel allows Finnair to focus on executing its distribution strategy with limited infrastructure investments while championing digitalization and customer-centricity.
The airline’s presence on cargo.one meets freight forwarders’ expectations and enhances Finnair’s visibility in their customers’ day to day business.
“Booking airfreight was never so fast and easy. cargo.one saves me 2-3 hours of work a day. To be able to book so many great Finnair offers, especially to Asia and North America, on cargo.one now is a valuable benefit.”
Hauke Langert, Airfreight Manager at Skyline Express
Digital sales channels
Digital distribution channels significantly reduce friction and allow airlines to execute on a sophisticated distribution strategy.
Friction is reduced through decreased response time and process costs as well as a customer centric one-stop-shop user experience. Airlines can refine their strategy by learning about customer preferences and buying behaviour to further improve their value proposition for customers and optimize prices.
Building a dedicated digital sales channel has not been done overnight, and in most cases will have required carriers to invest heavily in their own digital distribution infrastructure.
Advances in digital technologies have led to the emergence of new digital marketplace business models that provide an additional distribution channel in air freight. These marketplaces provide differentiated value beyond that of an in-house channel (e.g. through data products and improved matching of supply and demand) at significantly lower levels of investment.
In partnering with cargo.one, Finnair’s bet on one of these digital marketplaces has already paid off.
