Air Cargo

Air Freight Long-Term Contract Challenges

Revolutionizing Freight and Transport Through Digitalization

The modern-day supply chain, a critical component of global commerce, faces increasing challenges, including those presented by long-term contract challenges. With ‘Supply Chain Air Freight Long-Term Contract Challenges’ at the forefront, the intricate nature of contracts, numerous stakeholders, and the rapidly changing landscape of cargo movement become even more evident. There’s a need to streamline processes and improve efficiency. The pandemic has only amplified these issues, but where there’s a challenge, there’s also an opportunity: the potential for digital transformation in freight and transportation.

The Problem Deep Dive

Air Freight Contract Duration

Prior to the pandemic, air freight contracts within the supply chain usually lasted a quarter or a year. Yet, the crisis drove numerous freight forwarding firms and direct customers to secure longer-term agreements to ensure they had adequate space. However, a notable downside of these extended contracts is their strict penalty clauses for early termination. While these penalties offer security to service providers against abrupt cancellations, they pose constraints for clients, limiting their flexibility. Today, there’s a prevalent trend of multi-year charter contracts still being active in the market.

Complex Paperwork and Compliance

With global trade comes the need for rigorous documentation. Freight contracts, regulatory compliance paperwork, customs declarations, and more are now an inevitable part of the supply chain. Longer-term contracts further complicate this scenario. This often translates to tedious manual processes, delays, and potential for error. Administrative inefficiencies, particularly with customs paperwork, can hold up cargo for days, considerably influencing cost and delivery timelines.

While border compliance procedures have long been a challenge, with almost 30% of all global trade costs in 2020 attributed to them, it’s worth noting that such issues aren’t directly tied to the pandemic. Instead, geopolitical events such as Brexit play a significant role in shaping these documentation procedures.

Fragmentation in the Supply Chain

One of the most pressing challenges is fragmentation and lack of visibility across the supply chain. From manufacturers to transport providers to end retailers, the absence of a unified platform creates inefficiencies and uncertainties. A shipment in international trade often involves 20-30 parties and over 40 documents. Such fragmentation can elevate costs by 15% and slash service quality by 30%.

Ship full load during Covid

Pandemic's Impact

COVID-19 further complicated the logistics landscape. The unpredictability brought about by the pandemic made stakeholders seek guaranteed access to transportation space and rigorous compliance adherence. This desire for stability, however, collided with a fluctuating contract landscape and volatile cargo movements, leading to a magnified demand-supply gap. 

In April 2023, the International Air Transport Association (IATA) highlighted a pressing issue of overcapacity in the global air cargo sector. While the demand for air cargo decreased by 6.6% compared to April 2022, the available capacity to transport cargo surged by 13.4%, exceeding pre-COVID levels. This disparity between reduced demand and increased capacity presents a significant challenge for the industry.

Embracing the Digital Era: The Path Forward in Global Trade

Integrated Digital Platforms

To address the complex landscape, integrated digital platforms have emerged as a potent solution. These platforms offer centralized contract management, automated compliance checks, and real-time visibility into cargo movements. Firms with digital supply chain platforms can boost their operational efficiency by 10%. A staggering 85% of enterprises predict that within the next half-decade, integrated platforms will become pivotal in supply chain management. Integrated technology isn’t just a buzzword.


A comprehensive look at the Digitally-Driven Growth: A Holistic Approach to Aligning Supply Chain Objectives with Broader Business Goals  case study reveals its tangible benefits. The study found that such technology can facilitate seamless communication and data-driven operations in the supply chain.

Blockchain & Smart Contracts

The integration of blockchain ensures data security, transparency, and verifiability. Smart contracts can automate contract execution based on predefined conditions, significantly reducing manual intervention and the potential for disputes.

Blockchain in Supply chain

A recent research publication from Agile Dynamics estimates that blockchain technology will increase the Global GDP by $2.1 Trillion and almost half of it will come from B2B growth markets, which indicates the expectation of widespread adoption and innovation of blockchain in various industries and markets globally. The adoption of smart contracts can cut business expenses by an average of 13% by eradicating manual touchpoints and middlemen.

Predictive Analytics

Advanced analytics provides stakeholders with predictive insights into market trends, allowing them to anticipate challenges and adapt accordingly. It also aids in the optimization of routes, storage, and even pricing.

According to Harvard Business Review “Retailers lag in adopting advanced data analytics due to cultural resistance, organizational issues, talent shortages, unclear processes, outdated systems, and data management challenges. It recommends fostering an analytics-friendly culture, organizational redesign, and strategic investments in technology and talent for businesses to leverage the full benefits of analytics.” 

Predictive Analytics

Firms employing advanced analytics boast 33% higher profit margins compared to their non-adopting counterparts. 62% of retailers and manufacturers saw significant enhancements in their supply chain operations after incorporating predictive analytics. 

Analytics not only helps in anticipating market trends but also in evaluating contract performance. By applying analytics to contract terms, businesses can assess metrics like revenue productivity per container or per mile. This offers insights into whether long-term contracts are financially viable or if they need revisiting.

Analytics-Driven Contract Management

In the realm of digitalization, merely moving contracts to digital platforms isn’t enough. The true power of digitization lies in leveraging analytics to understand and optimize contract terms. For instance, determining the ‘revenue productivity per container’ or ‘revenue productivity per mile’ can offer insights into the true cost and effectiveness of long-term contracts. Such granular analytics can guide companies on whether the long-term contract model is beneficial or if adjustments are needed. By evaluating these metrics, organizations can make informed decisions about restructuring their contracts, ensuring they get the best return on investment.

End-to-End Visibility

One of the most invaluable features of these digital platforms is the promise of end-to-end visibility. For companies, this means being able to monitor their supply chain in real-time, right from the point of origin to the final delivery, ensuring better coordination and decision-making.

According to this article form Supply chain digital, “Supply chains are lagging in adopting modern visibility technology, with a lack of real-time data and cross-company collaboration hindering progress, says Ryan Closser from FourKites. A Deloitte report reveals only 13% of firms can map their entire supply chain, while 22% lack visibility beyond immediate suppliers. “

End-To-End Visibility

Visibility is vital for operational efficiency and future resilience. Businesses with end-to-end supply chain visibility enjoy a 20% reduction in the cost of goods sold. This is evident in the case study of Digital Transformation in Logistics: Enhancing Efficiency and Performance with End-to-End Supply Chain Visibility.’ In this study, it was clear that digital tools can significantly enhance efficiency, enabling real-time tracking and data-driven decision-making in optimizing the supply chain. It underscores the necessity of such visibility tools in today’s complex logistics landscape. Enterprises that possess real-time supply chain transparency can diminish stock-outs by 50%.

The digital tide waits for none

The freight and transportation sectors are at the forefront of a pivotal digital transformation. As the pandemic amplifies global challenges, the industry’s course is indelibly linked to its prowess in embracing and leading with digital innovations. Beyond just strategic moves, digitalization emerges as an essential pillar for resilience, growth, and efficiency in our complex global commerce matrix. This isn’t about passive adaptation—it’s a clarion call. 

The data sends a clear message: Embrace digital tools to eradicate inefficiencies and cultivate nimble, adaptable supply chains. Integrated platforms, blockchain, predictive analytics, and end-to-end visibility aren’t just advantages; they’re imperatives. Every stakeholder, from manufacturers to retailers, must spearhead this change.

Act now, not only to remain relevant but also to carve a dominant position in the future tapestry of global trade.

End-to-End Supply Chain Visibility: Igniting Efficiency

End-to-End Supply Chain Visibility: Igniting Efficiency

The Backdrop:

A big player in global freight forwarding and supply chain management in the logistics industry was hitting some roadblocks. As their business exploded, so did the complexity of their operations, leading to bottlenecks, increased lead times, and assets sitting idle. The decision-making was also taking a hit, with the absence of real-time data and and end-to-end supply chain visibility. They reached out to us, DARTexon, the mavens of supply chain digital transformation, to untangle their operational knots.

The Objective:

We had our work cut out for us: to dial up efficiency, minimize lead times, and give a shot in the arm to decision-making by bringing end-to-end visibility to their supply chain operations. Our aim was to rev up asset utilization and provide a robust ROI.

Choosing the Ace in the Hole for Supply Chain Visibility:

In a world where businesses need to comply with modern slavery act, environmental, social, and corporate governance (ESG) regulations, full supply chain visibility has become the Holy Grail. Businesses are harnessing new tech tools to achieve this level of transparency and create resilient supply chains.

Logistics end to end visibility solution

The DARTexon Way: A Digitally Supercharged Supply Chain

But remember, not all solutions are cut from the same cloth. Selecting a supply chain visibility tool can be quite challenging. Key factors matter. These include customization and flexibility. Data processing capability for generating reports is also crucial. Security is vital, particularly because various stakeholders across the supply chain will use these solutions.

Sense analyze respond supply chain

We put our Supply Chain Visibility product in the driver’s seat. This power-packed system gathers location info from various sources and morphs it into actionable business insights. Key functionalities include:

  • Integrated Asset Tracking : From fixed & portable GPS devices to SIM-based and app-based tracking, we had all bases covered.
  • Production and After Market Supply Chain : We managed both inbound and outbound processes with aplomb.
  • Trip Models and Types : We supported a variety of models and types, from Milk-Run to Long Haul and planned to dynamic trips.
  • Advanced Features : Our arsenal included asset monitoring, control center, fleet/driver management, route management, and multilingual alerts. It also had multilingual alerts system delivered via SMS and WhatsApp.
  • Dashboards:  We provided dashboards for real-time monitoring and quick decision-making, which included trip, route, alert, and plan vs actuals
  • Key Performance Indicators (KPIs) :  Plan vs actual analysis, on-time delivery (OTD), delay analysis, asset utilization, asset exception analysis – we tracked them all.

The Outcome and Impact:

Getting the most out of our solution meant having a dedicated team in the trenches, ensuring its success. By integrating this deployment into specific role objectives and key results, there’s assurance that the job gets done. Additionally, this approach assigns a knowledgeable individual to swiftly handle any emerging issues or delays. Furthermore, using a vendor with a top-tier customer success team ensures a seamless rollout and a speedy ROI.

Our Supply Chain Visibility solution led to a transformation::

  • Efficiency boost: Our integrated tracking system enabled real-time asset monitoring, cutting down on time lost to manual tracking. The clear visibility of inbound and outbound processes helped streamline operations and eliminate redundancies.
  • Delay Reduction: Our real-time tracking and alert system facilitated the early identification of potential delays, enabling proactive corrective measures. This significantly improved the on-time delivery rate.
  • Increased Asset Utilization:By implementing constant tracking, we ensured that assets were consistently working and not idling, providing a healthy bump to the client’s ROI while reducing unnecessary downtime.
  • Enhanced Decision Making : Dashboards and KPI measurements offered a panoramic view of operations. These real-time insights empowered the team to make data-driven decisions, leading to improved supply chain efficiency.

Visibility tools, a real boon for organizations, allow the detection of potential issues before they blow up. They also ensure all stakeholders are kept in the loop about cargo movements, thereby meeting production goals, service levels, compliance regulations, and delivery obligations.

Our collaboration with this logistics client is a testament to the power of a well-designed digital transformation solution. It can effectively rein in supply chain challenges, drive operational improvements, and put the wind back in the sails of bottom-line performance.

Supply chain management

Supply Chain Optimization – Localized Decision-Making

Local supply chain decision-makers have a clear edge, with an impressive 83% likelihood of making informed and effective decisions

This can be largely attributed to their immediate, hands-on involvement in operations, which lends them unique insights—a clear demonstration of the value of localized decision-making in supply chain optimization. Furthermore, evidence shows that decisions grounded in a localized or cross-functional approach prove practically successful in 57% of instances, underscoring their effectiveness.

But how this can be achieved? 

The answer lies in adopting a localized and cross-functional approach to decision-making.

Here’s what a local decision-maker brings to the table:

  • Deep Knowledge of Relevant Variables: They have a keen understanding of the variables that should be factored into their decision models.
  • Comprehensive Variable Inclusion: They ensure all pertinent variables are accounted for in their decision models.
  • Assurance of Data Accuracy: They validate the data representing these variables, ensuring it is precise and reliable.
Supply chain Decision making Local vs Centralized

What is the implication of integrating digital technology with localized decision-making?

Presently, the digital analytics tools at our disposal tend to favor global decisions over local ones.

It’s crucial to harness the unique perspective of local decision-makers. Armed with specialized knowledge about their region, suppliers, and customers, local decision-makers’ insights can be instrumental in enhancing operations, spotting opportunities, and effectively managing risks.

We should focus on these three key areas:

  • Digital Transformation of Local Decision Models: Move towards the digitization of local cross-functional decision models to streamline processes.
  • Global Technology Infrastructure Development: Refine the global technological framework to expedite localized and cross-functional decision-making.
  • Customer Empowerment: Enable customers to take the reins, equipping them with the tools they need to become self-reliant in their transactions and interactions.

How did we do it?

Case Study: Optimizing Supply Chain Decision-Making through Localization

In today’s globalized world , characterized by intricate business landscapes, optimizing decision-making in supply chain management is the linchpin of seamless operations and the preservation of a competitive edge. This case study takes a deep dive into the transformative influence of localized decision-making within the scope of supply chain management. It explores how local supply chain decision-makers, with their heightened human visibility and proximity to operations, are more likely to make good decisions, resulting in improved overall performance.

Our client is a multinational manufacturing corporation which operates in multiple countries and has a complex global supply chain network. As a producer of consumer electronics, they need to ensure tight-knit coordination among a range of suppliers, distributors, and retail partners to meet the demands of their customers effectively and efficiently.

Implementing Localized Decision-Making:

Our client’s transformation strategy, focused on ‘Supply Chain Optimization – Localized Decision-Making’, revolved around decentralizing the decision-making process. This innovative approach empowered local managers and employees, leveraging their intimate knowledge of regional nuances and specific expertise. To foster a comprehensive perspective on decision-making, cross-functional teams were established, composed of members from procurement, production, logistics, and sales departments.

Embracing the digital age, our client recognized the value of incorporating technology to streamline their supply chain operations. Key digital technologies included:

  • Real-Time Data Analytics: The company implemented robust data analytics systems that collected and analyzed real-time data from diverse sources, including sales, production, inventory, and logistics. This gave local decision-makers access to timely, accurate information, and the ability to make data-driven decisions based on the real-time status of the supply chain.
Real-Time Data Analytics
  • Supply Chain Visibility Platforms: The deployment of these platforms allowed decision-makers to track and monitor the flow of goods throughout the supply chain. These platforms integrated data from various stakeholders—including suppliers, manufacturers, logistics providers, and retailers—providing a comprehensive view of the supply chain and facilitating cross-functional collaboration.
Supply Chain Visibility Platforms
  • Collaborative Planning Tools: The company adopted collaborative planning tools to foster real-time communication and collaboration among local teams. These tools promoted real-time communication, document sharing, and collaborative decision-making, resulting in improved coordination, faster resolution of issues, and better alignment of supply chain activities.
Collaborative Planning Tools

By empowering local supply chain decision-makers, capitalizing on their unique human visibility, and promoting cross-functional collaboration, we observed a significant uplift in decision-making effectiveness and overall supply chain performance. This case study underscores the power of localized decision-making as a strategy to drive operational excellence and secure a competitive edge in a fast-paced, complex business environment.