Half of corporate executives identify better pricing and reservation software to improve real-time visibility as the most impactful way to achieve sustainable growth
NEW YORK; Dec. 18, 2015 – Only one in four air cargo corporate executives surveyed by Accenture feel that they’re able to optimize revenue for their business, despite an ongoing economic recovery which has driven an increase in freight volumes.
In a global survey, “Accenture 2015 Air Cargo Research: Taking Off for Higher Profitability,” Accenture found that while air cargo executives want and need better tools to help optimize revenues, half of all air cargo companies (54 percent) are actively seeking better pricing and reservations software to improve real-time visibility into utilization and price integrity across the quote-to-cash cycle.
In a marketplace where increased competition and slowing growth are common, carriers are intent on securing every possible dollar of revenue by decreasing operational costs. The survey shows that 71 percent of air cargo executives would consider Software-as-a-Service (SaaS) to lower overall costs, improve business agility and speed deployment.
“For many air cargo carriers, limited visibility into capacity utilization can result in serious revenue leakage through a number of causes. These include unnecessarily shipping low-yielding freight on in-demand routes to under-utilized allocations and being unable to respond to shipment disruption,” said Ganesh Vaideeswaran, managing director, Accenture Freight and Logistics Software.
The research outlines key areas that air cargo carriers are looking at in order to transform their business:
- More efficient business processes: More than 60 percent (69 percent) of respondents chose “achieving process efficiencies" as one of their top three business challenges. This includes optimizing capacity, as underutilizing capacity can lead to revenue leakage. Nearly 40 percent (39 percent) of respondents point to process automation and improving software tools as twin priorities to manage this challenge.
- Price integrity: Inaccurate and inconsistent pricing is one of the principal causes of revenue leakage across the industry. Additional challenges arise from a lack of visibility into market rates and de-centralized control of sales operations. Just 14 percent of air cargo executives indicate that their current pricing systems allow them to easily create and manage competitive rates. System-level issues contribute to the difficulties in this area - missing information such as cargo details at the time of booking was cited by 61 percent of respondents as a key challenge.
- Better visibility: While our research shows that executives have relatively high visibility into utilization at each key stage of the shipping lifecycle, only 54 percent have end-to-end visibility across every stage – from quoting and booking to acceptance.
“Air cargo transports approximately 35 percent of the world’s trade by volume – it’s a hugely important industry, and our research shows that carriers are under mounting pressure to increase profitability in a competitive and increasingly volatile marketplace,” Vaideeswaran continued. “These findings underscore our commitment to creating software that brings agility, efficiency, and precision to all aspects of cargo operations. By helping to prevent revenue leakage, these solutions create exciting opportunities for boosting growth in a tough operating environment.”
The full report is available at www.accenture.com/2015AirCargoSurvey.
The Accenture 2015 Air Cargo study is based on a quantitative, online survey conducted by McGuire Research Services on behalf of Accenture between February and March 2015 among 85 air cargo
executives worldwide. The 85 survey participants came from across the air cargo industry – from airlines and air cargo carriers (scheduled and non-scheduled) to freight air transportation companies. Respondents came from Europe Middle East & Africa (70%), North America (21%), Asia Pacific (7%) and Latin America (1%).
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 373,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.
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