Robot revolution

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Airport cargo facility provider Airis International discusses the latest developments in cargo handling infrastructure, including the potential use of robotics in pallet and ULD building

A major part of the role of air cargo facility providers is to identify emerging trends that may affect the design or efficiency of the air cargo sector and its ground operations. And while some may argue that air cargo has not changed much in the last 40 years, advances in communications technology and processes, in particular, mean that a lot is changing, and there is a long list of factors that threaten or promise to transform the air logistics chain in the near future as never before, writes Will Waters.

New technologies, emerging market demands, changing global economies, pressures on pricing and margins, more-complex financing structures, and more rigorous environmental regulations are just some of the forces reshaping an industry that, until recently, had not changed in decades, according to Airis International, a US-headquartered aviation facilities specialist. In its role it draws on the expertise of aviation specialists including leasing and real estate specialists, engineers, legal authorities, environmental planners, and business analysts, to identify and open new opportunities for its clients – also providing underwriting for projects through financial partners.

Airis notes that questions facing clients when trying to plan facilities include: What new design strategies should be considered and what technologies provided for? What are the business implications of facility costs? What business solution will provide the most flexibility as the air cargo industry grows and changes? What works and what doesn’t work in planning configurations? How can the facility be made adaptable to changing markets?

The company’s CEO, Ron Factor, says one key development in the last three to four years has been the reversal of a previous trend in Europe and North America during the 1980s and ‘90s for forwarders to move away from expensive on-airport locations to less-costly off-airport sites. He says a combination of factors is now driving many larger air freight forwarders back to the airport, particularly the desire for a faster, more-integrated, secure, reliable and cost-efficient air logistics chain. Other factors have included rising property costs at off-airport locations and the significant financial costs of transfers between airside and off-airport facilities.

Another factor has been the consolidation that has taken place over the last 10 to 15 years within the freight forwarding and logistics sector, which has led to the formation of enormous multinational players with revenues of US$20 billion or more, he notes, giving these players the buying power and the volumes to justify on-airport facilities.

Examples where forwarders have been migrating back to airport locations include Munich, Vienna, Frankfurt, and Amsterdam, with freight forwarders in some cases choosing to co-locate with air cargo handlers, or employ traditional air cargo handlers within parts of their own warehouse facility with airside access, “in order to find the best possible efficiency or processes. One area of our future focus is to look at providing both freight forwarders and ground handling agents with facilities on-airport where they can take advantage of synergies,” Factor says.

“There are many complicated components to deliver product from shipper to consignee. Speed and quality is the name of the game, along with process integrity, transparency, and security, but when that is spread out across the infrastructure, it becomes expensive because the pieces are changing hands. The idea is to transfer that process into a vertical solution, offering processes in a close environment, or ideally in the same environment.

“That is what we see and what we are trying to design for.”

As an architect specialising in aviation, his job is to find ways to reassemble these complicated components back onto the airport in the most economic and efficient fashion. “Everything is cost driven, and e-commerce has presented new challenges. But there are solutions and it is just a matter of time to make it happen,” Factor says.

Of course, space is restricted at many of the world’s major metropolitan airports. That problem is often compounded by the fact that airport cargo areas, often created during a period prior to deregulation, are made up of a patchwork of small cargo handling facilities and ground leaseholds whose lease expiry dates are perpetually out of sync, making large-scale, modern developments very difficult.

“That is the conundrum that faces our world,” notes Factor. “But there are ways of facing and changing that, and that is what we do.”

Many of the airline-specific, purpose-built cargo handling facilities created in the 1980s and 1990s were single-storey buildings that stretched for hundreds of metres, with perhaps 100 truck docks. But improving technology and processes leading to efficient call-forth systems for trucks reduces the need for so many truck docks, and new multi-storey facilities “are much less costly in terms of footprint”, Factor notes.

While the move by freight forwarders back into the airport environment has created new requirements in terms of airport cargo facility design, the demands placed on the supply chain by the rapidly developing e-commerce business is also placing new requirements on air cargo facilities.

The e-commerce challenge

Factor says the needs of e-commerce players are likely to be different from general air cargo shippers, “but it is not yet clearly understood what their requirements are at this point”, he admits. “The US Department of Commerce estimates that the current value of e-commerce to the US economy is between US$2 trillion and US$3 trillion and predicts that by 2025 it could be $20-$25 trillion. That will have a huge impact on how goods are transported. But no one yet understands exactly what that impact will be.”

Currently, a lot of the traffic generated by e-commerce is being channelled through postal providers, which are seeing a revival of their parcel businesses because they are seen as a cost-effective, integrated means of distribution.

This has come at a time when there has been a shift away from cargo being largely borne by freighter aircraft back to it being borne in belly holds of passenger aircraft, in part because of the increased capacity offered by new-generation wide-body aircraft. “That is something that has occurred in the last three to five years and has an impact on the infrastructure of airlines,” Factor notes.

A greater number of smaller shipments requiring faster processing has also reduced the need for automated storage and retrieval systems within some air cargo handling terminals.

The rapid growth of e-commerce shipments, much of which is currently transported by postal operators and the integrated carriers, may suggest the need for a rebirth of larger postal facilities at airports, although Factor says it is far from clear whether that is the answer to the question of how the freight sector should accommodate e-commerce volumes.

The postal authorities are “currently pretty much overwhelmed”, are not necessarily the most efficient means of distribution, and also tend to be slow to change, Factor notes. He sees the use of postal operators as the favoured channel by e-commerce operators being “a temporary fix” and expects this role to be taken over at some point by private enterprises.

One such private company with a particular interest in logistics, of course, is Amazon. So, might Amazon be part of the solution?

Factor says that the number and size of Amazon’s distribution facilities, particularly in the US, is hugely impressive – as is their speed and efficiency, making extensive use of automation and robotics, of which his company is a strong advocate. “We think there is a tremendous need for robotics in the industry, which is being explored now. It is not perfected yet, but it is just a matter of time.”

He sees parallels in the automation process of the automotive industry back in the 1980s, noting that more than 60% of the fabrication process of cars in the US is now done by robots. “We will see a similar evolution on the air cargo side,” he says.

Robots are coming

Airis has been exploring the use of robots in air cargo handling after being approached by Finnish innovation firm Ahkera, which is developing robots to use within passenger baggage handling.

Last year Ahkera and Airis began working with Shanghai air cargo handler PACTL to examine the feasibility of robot technology within air cargo pallet-building in a context of shipments of irregular size, shape, and mass. Using analysis of two years of data from PACTL and from airlines, Airis and Ahkera have concluded that 85-90% of general air cargo shipments handled by PACTL could be processed by robots.

Henric Nauckhoff, SVP of business development for Europe and MENA at Airis International Holdings, told the Nordic Air Cargo Symposium in Stockholm: “So, we’re focusing on one of the most labour-intensive processes in the air cargo operation, the actual buildup of the pallets and containers. What we were able to see in this particular operation was that we could save up to 60% of the manpower involved in a particular operation.”

Airis calculates that by using robots to build pallets within a context such as PACTL, “the payback for the investment in a robotics solution would be less than two and a half years – and remember that this is an environment where the salary levels are vastly lower than what we experience in a European or Western environment – as low as 20%”.

Manpower efficiency gains

But the manpower-efficiency gains also have the potential to help solve a problem affecting many air cargo handling companies, particularly in rapidly developing economies: a difficulty recruiting, training, and retaining qualified staff.

Nauckhoff says three robots working on four workstations could build around 16 pallets per hour, or around 24 LD3 containers, which is scalable. “And the good thing is that this is applicable to a brownfield existing facility as well as to a greenfield facility,” he adds. The robotics solution also takes up a smaller footprint than the equivalent volume processed manually.

Under the robotics model, prior to the loading of the cargo by robots each piece is automatically weighed, dimensioned, and covered with machine-readable tags during the acceptance process, allowing each shipment to be identified down to piece level, including a digital photo ID of each piece – something that shippers have been demanding of the air cargo sector for quite a long time.

“This is becoming a very big issue, the need for transparency and control, and the need to have the possibility to track and trace down to a very fine level. Typically, shippers communicate in terms of pieces, whereas in the airline industry we are used to talk about shipment level, and the two things don,t really meet,” Nauckhoff observes.

In addition to these productivity and ‘manpower’ efficiency gains, which are boosted by the fact that the robots can operate 24 hours a day, he says there are also security benefits because the cargo remains untouched by humans, as well as obvious safety and health benefits for humans not employed in such demanding and grueling work.

PACTL may now trial the first use of the robots to build general cargo pallets this summer, and two Middle East-based airlines have placed orders for robots to be used in passenger baggage handling.

Although the use of robots in passenger baggage handling has already begun at a handful of airports, Nauckhoff believes this is the first solution being developed specifically for cargo. However, one Norwegian seafood shipper, Marine Harvest, has been using robot technology to build air cargo pallets, although the shipments are regular in size and weight – as opposed to general air freight. It was unclear at the time of writing which robot technology it uses.

Nauckhoff says that although the technology is new to air cargo, it is proven technology that has been used within the automotive sector for around 25 years.

Several delegates at the Nordic Air Cargo Symposium agreed that robotics have significant future potential within air cargo operations.

Henrik Ambak, SVP for cargo operations at the world’s biggest international air cargo carrier, Emirates, said he had been tasked with creating a 10% manpower efficiency improvement, year on year, for the next three years. “So, are we looking at automation? Yes we are. You could say that this may be counterintuitive in terms of costs, but it also has a lot to do with the consistency of service.

“For us, it is all about ‘delivered as promised’, and that means creating predictable operating scenarios, and there robotics obviously is the future. We are looking at it, we are following that space, and eventually there is no doubt the right time will come for us to use thatas well. When that point in time occurs, I can’t tell you.”

Tom Mikkelsen, head of air freight at Marine Harvest, commented: “We have been using robots since 2009, building ULDs, and I can confirm that it is very useful, it is working, it is producing a ULD with 161 boxes, 4,000 kg, in 15 minutes. So, I think it is going to be part of the future.”

Freight forwarders skeptical

But some freight forwarders are skeptical about the potential of robots in pallet building. Panalpina’s Lucas Kuehner says pallet-building is almost an art, involving a great deal of knowledge acquired by specialists, and he didn’t see a great deal of savings to be made by replacing this function with robots. He also doubted whether they could cope with more complex shipments, but acknowledged that they may have a future for more regular or homogenous shipments – for example in gateways such as Shanghai where such shipments were more common.

Kuehne + Nagel’s Tim Scharwath, in an interview in this issue of CAAS, also doubted their value because irregular shipments make up such a large proportion of air cargo.

Nauckhoff says he has heard similar skepticism expressed by other people, but insists that the feasibility studies he has done with PACTL lead him to believe that the average proportion of shipments that can be handled by robots “would not be below 80% or above 95%”. He says robots will also have several types of ‘hands’ that can be switched according to the shape or size or nature of the shipment, a switch the robot can make itself and that will only take a few seconds.

“We truly believe that robotics can and will be a game changer,” he says, noting that there had been repeated calls in recent years for game changers in air cargo operations. “It is an area that hasn’t really changed over the last 35 or 40 years. We think that robotics will change all that, and quite soon.”