CHICAGO – After transforming its under-performing passenger operation over the past decade into one of the best managed and profitable global carriers, Delta Air Lines (NYSE: DAL) is now focused on improving other aspects of its business, including cargo.
The company's capital expenditures in cargo-related technology and systems are paying off in improved service and ease of business for customers, Eric Wilson, managing director for global cargo sales, said in a FreightWaves LIVE presentation here last week.
Two years ago, Delta overhauled its website, making it more user friendly and functional. Deltacargo.com is where unmanaged customers — small, mom-and-pop freight forwarders and shippers that don't have contractual arrangements — typically book freight. The upgrades resulted in a 350% return on investment. A third of all bookings now come through the web channel, compared to 7% before the digital investment, Wilson told FreightWaves afterward.
"Customers are really happy about it," Wilson said.
Tracking And Visibility
In 2017, Delta stood up its Cargo Control Center to better monitor shipments, especially critical ones such as perishables and human organs for transplant, and ensure consistent delivery performance. With 12 hubs around the world, operations in 60 countries and more than 300 daily destinations in its network, keeping track of shipments impacted by a weather delay or involving a connecting flight can be challenging.
The Cargo Control Center is essentially a 24/7 office at Delta's Atlanta headquarters where dedicated personnel coordinate with other parts of the company, including the in-house meteorology team and call center, to predict potential bottlenecks and service issues associated with flight delays or cancellations, make necessary transport and safe-handling adjustments, and keep customers informed with timely status updates.
Delta is one of the first major carriers to replace manual tracking of container shipments with Bluetooth technology. This year it completed outfitting all of its 19,000 unit load devices (ULDs) with short-range radio frequency transmitters and has placed 1,400 readers at its warehouses, and those of its airline partners, around the world.
The technology ensures Delta has equipment available where needed and gives customers push notifications into the shipment's status, according to company officials. The airline also extended the program to off-airport customer facilities so shippers can track ULDs, which hold cargo, baggage and mail, throughout their journey — starting in their own warehouses.
The automated tracking service eliminates paperwork at the dock door when units are loaned out and produces a digital receipt, which is emailed directly to the shipper.
"We realized we needed to close the information gaps from when we accept a shipment and tell customers what we do with it while it's in our possession," Wilson said. "That's increased our order book because we have a correct [equipment balance] and we can … show customers where their cargo is in the system. We also use it as a kind of accountability piece. If they take the equipment off premises and we don't get it back, we know where it is, so we can contact the customer and ask them to return it — hopefully with a new shipment in it."
Delta also offers a satellite-based, onboard cargo tracking product, Equation Critical, which is typically purchased for highly time-sensitive shipments.
Delta last year also invested in mobile barcode scanners that warehouse workers wear on their wrists to tell the cargo management system when shipments are checked in, being built into larger containers with other pieces, unloaded or moved between aircraft, Wilson said. There is also a screen for customers and delivery drivers to sign documents. And agents can use the technology, which is equivalent to having the company's operating system on one's forearm, to take pictures of a shipment if damage is noticed during acceptance or in-transit handling.
"It's given our agents more mobility, more freedom of movement," Wilson said. "They're not tied to a desktop where they have to do this function on a keyboard. It's been extremely well received and we continue to roll that out system-wide."
Predicting Customer Demand
Wilson also explained how a new partnership with FreightWaves' SONAR product is helping the airline with demand forecasting for cargo. Trucking is a much more open market than air cargo, with several platforms for identifying rates, capacity, accepted and declined loads in near real time, while airlines typically rely on 3-month-old data to plan pricing and asset deployment, he said.
"We think FreightWaves is going to give us some visibility into the future, which will help us make better decisions and ultimately do better by our customers," the sales chief said. "Rearward-looking data is as big as [a car] windshield. And our forward-looking data is as big as our rearview mirror. We struggle in our industry to understand what's coming around the corner."
SONAR data showing Delta Air Lines efficiency improvement
Last month, Delta Cargo launched a one-stop delivery option for its DASH domestic, small-package same-day express service tailored for small companies. Shippers can take advantage of 3,000 flights per day on Delta's domestic network.
The company partnered with Roadie, an on-demand logistics provider that crowdsources drivers using their personal vehicles, to provide a first- and last-mile delivery option for shippers.
Wilson said Delta has tens of thousands of known shippers, who have been validated for security purposes and have been asking for an all-inclusive shipping option because they don't have time to drive an urgent item to the airport or have a familiar local delivery network, especially at the destination city. DASH Door-to-Door lets small forwarders and other companies tender a package with one click, and Delta takes care of the pickup and delivery, working behind the scenes with Roadie.
Many forwarders use couriers for express package shipments, but the new service is aimed at companies that are irregular shippers or don't have established relationships with couriers and need something delivered the same day versus going overnight through a FedEx Corporation (NYSE: FDX) or UPS Inc. (NYSE: UPS) network, Wilson added.
"It's not our normal model to provide a pickup or drop-off service. It adds cost, it adds complexity. But we realized we already had a solution" with Roadie to delivery delayed bags to passengers at home or a hotel, he said.