Our customer GlobeAir leads the way again using our technology

Returnjet and GlobeAir pioneer first online charter quote and booking tool

GlobeAir, the leading European private jet operator with the largest fleet of Citation Mustang jets, has announced the ground-breaking first automatic booking via the Returnjet platform, thanks to the integration of its revolutionary API (application programming interface) developed by BoldIQ. The API is driven by the latest web-based software technologies and interfaces with Returnjet’s online platform to deliver instant net pricing to brokers, including integrated aircraft performance and availability check, together with an end-to-end booking process.

Within minutes of going live GlobeAir announced that its first automated booking had been successfully received. GlobeAir regularly takes booking via the Returnjet platform but this is the first using this revolutionary technology.

Bernhard Fragner, CEO of GlobeAir, explains: “Previously, the private jet industry relied on various human interaction at some stage of the quoting and booking process and now this new functionality represents a significant step change in technology, providing in real time a flight enquiry and a confirmed price. We are very excited to work together with Returnjet to provide the cutting-edge technology in the business jet industry. I have no doubt that the future of our industry will be in the online booking arena.”

Roei Ganzarski, president and CEO of BoldIQ addds “Historically a lot of time, effort, and money has been invested in the aircraft we all fly. We believe that the next evolution of this industry will be ‘off board’ i.e. the significantly better and more efficient use of the existing and future fleets of aircraft, no matter what on-board technology they may or may not possess. What if you could fly more revenue flights with the same number of aircraft and crew? Less aircraft and crew? What if you didn’t need to buy more aircraft or hire more crew to grow your business? Instead of trying to sell your reposition legs, why not eliminate them? When tackling these issues, we are now discussing bottom line efficiency in a whole different and much larger scale. This is why we continue to focus on fleet level and network level operational efficiency.”

Returnjet is the first online booking platform that can provide instant and accurate pricing; another significant and welcome point of difference between it and the other charter search platforms. Returnjet director Steve Westlake sums up in saying “This is a real game changer for brokers using the Returnjet platform. Speed, efficiency and accuracy are key for both brokers and operators, and, by continuing to develop our platform to integrate with the very latest technology it allows us to ensure Returnjet continues to be an agile and flexible tool that can take advantage of new digital disruption models and ultimately set a new service experience in online charter.”

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What do bots and Henry Ford have in common? Efficiency

It seems like every headline these days is either praising or despairing the impact artificial intelligence (AI) and next-gen technology will have on society, especially as it relates to the workforce. Will the introduction of AI, bots, drones and autonomous vehicles permanently alter the current job landscape as we know it? Probably. AI is poised to replace 6% of U.S. jobs over the next five years, according to Forrester. But before you become too concerned about the current state of your job stability, let’s take a deeper look.

As with every revolution, some change is to be expected. Industries will be affected by new technologies by varying degrees, but most changes will come in waves. Almost immediately, we’ll see retail jobs like floor sales and cashiers, delivery drivers, and technicians impacted. The introduction of bots embedded into things like appliances and machinery means self-diagnosis and perhaps even in some cases, self-repair will be possible — reducing the need for human technicians. Of course, we will still need these types of skilled workers, but their time will be freed up for more complicated projects and repairs.

Longer term, we’ll start to see next-gen technologies reduce the overall number of humans in the workforce in fields such as aviation. Technological advancements in the field of autonomous vehicles could allow airlines to be piloted by AI sooner rather than later, but passenger psychology will impede this process for the foreseeable future. As a society, we just aren’t ready for a fully autonomous Boeing 787, although don’t be surprised if cargo aircraft start this sooner. And it doesn’t stop with pilots; we’ll also see call centers staffed by AI bots capable of answering phones and solving problems. Or notice TV news anchors, weather reporters and other information transfer jobs transitioning to AI.

There is no stopping these technological advances. Sounds like a lot of gloom and doom, right? That’s only one view (sometimes also referred to as “glass half-empty”). But before we condemn these technologies and try to limit them or stop them, we need to consider what we already know from the past as we look toward the future. When Henry Ford first introduced the Model T car in 1908, it’s likely he didn’t foresee the full scope of events he would set in motion. By 1914, Ford’s production line had reduced assembly times from 12 hours to less than 2.5 hours. By putting 15 million Model Ts on the road, Ford forever disrupted the auto industry by slashing the price, redefining the working wage and ushering in a phase of innovation that was previously unseen.

If we think about it, at what point did the introduction of a new technology not raise complaints and issues about taking away jobs? Cars instead of buggies and horsewhips, calculators instead of manual computation, assembly robots such as in auto plants, direct-line phones instead of going through a switchboard… Every major technological introduction has its side effect (and yes, perhaps, even purpose) of potentially completely, or partially, replacing the human worker in the equation. But we have also seen that these same technologies enable new services and even industries to be created — and, with them, new jobs.

Think of Amazon, for example. As an online bookseller that “collapsed” the need for thousands of bookstores, one could argue it eliminated bookstores and bookseller jobs. But the truth is it created jobs elsewhere: deliveries, logistics, warehousing and call centers are a small direct example. Moreover, look at how many people can start home-based businesses, or grow their retail businesses because they can now expand their market reach via Amazon’s marketplace. Does that, perhaps, create jobs too?

As we look ahead to the future, we should not be asking, “How can we reassure the public there will still be job security?” Rather, we need to be asking, “How do we best position ourselves to take advantage of the future?” These technologies are sure to displace manual labor in certain industries — like call centers or production facilities — but will they also simultaneously open up the door to new and unforeseen opportunities?

There is really no such thing as job security, regardless of bots. Did employees of Kodak, PanAm and Lehman Brothers have job security? What about engineers at Boeing that are currently going through layoffs? The jobs lost in those cases had nothing to do with AI or bots. What people need to do is see and understand what is happening around them, and think about how they can best utilize their skillset (and/or acquire new skillsets) to find a place — or better yet, create a place — where they can provide value others will pay for. Ingenuity, innovation, perseverance, flexibility and grit are what will ensure people a job in one form or another.

All in all, there are two ways view this revolution. The first is a gloom-and-doom mindset that bots are taking over and stealing our jobs. Or the more rational option, at least in my opinion, is that new technology will positively advance our workforce so we should use it to our benefit. As a society, we’ll be better off embracing change and looking at how it can serve us rather than fearing change. We don’t want to go the path of Kodak — denying digital and ending up as a lesson in history.

There’s no doubt there are unknowns when it comes to AI and the future job landscape, but transformation and adaptability have been an inevitable part of our nation’s and in fact our world’s history. As innovation and invention remain core pillars of our societal DNA, the next phase we need to embrace is the digital revolution.

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BoldIQ part of Jeppesen Operator – Optimized BizAv Flight Department Platform

Link to article on aero-news.net

New Operator Mobile App Adds Key Functionality Within A ‘Do-It-Yourself’ Operations Solution

Jeppesen recently introduced key enhancements to Jeppesen Operator, a new online business aviation platform that integrates key business aviation functionality in a ‘one-stop shop’ self-service environment. Available for pilots and operations staff through the cloud, a new iOS-based companion mobile app for Operator – “Personal Assistant” is also now available that allows flight crews to access essential Operator data and capabilities on the go.

Jeppesen and leading optimization and operations management software provider, BoldIQ, have teamed together to bolster Operator capabilities with scheduling and management functionalities, driven by advanced optimization algorithms. Operator combines Jeppesen’s 40-years of experience with flight planning and international trip planning with BoldIQ’s 10-plus years of aviation on-demand flight operations and optimization experience, into a single, united user platform. Future Jeppesen Operator enhancements will utilize BoldIQ scheduling optimization capabilities to deliver enhanced flight operations functionality.

“Developed through years of research and built with proven software, we understand customer-driven requirements and have teamed with top providers such as BoldIQ and FlightAware to offer Jeppesen Operator as the next generation business aviation tool to unify operations,” said Ken Sain, chief operating officer, Jeppesen. “All-encompassing operations optimization provided through the tool enables operators to utilize their resources to a degree never before possible. Additionally, Jeppesen’s renowned global customer service team is available 24/7 to resolve any issues that customers may encounter.”

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BoldIQ in “Are We Ready for Transportation Technology?” in APICS Magazine

“Are We Ready for Transportation Technology?” Jennifer Storelli, Associate Editor, APICS Magazine

In writing the cover story for the May/June 2017 issue of APICS magazine, I had the pleasure of exploring some of the latest transportation technologies, including drones and automated trucks. Some analysts think that these new vehicles could be fulfilling their own transportation and distribution niches as soon as five or 10 years from now, which could change the industry in many ways.

However, one of the limiting factors to this speed of implementation is acceptance by society. “Technology often moves at a rate that’s much faster than society, business, politics or regulations are able to keep up with,” says Matt McLelland, innovation lab research manager at Kenco. As a result, people often are hesitant to integrate new technologies into their worlds. For example, people are concerned that drones could invade their privacy or that people on the ground could interfere with their flight paths, he points out.

Because these vehicles fly overhead, consumers also have expressed concerns about drones or their packages falling out of the sky and hurting someone on the ground, explains McKinsey & Company in its September 2016 report “Parcel Delivery: The future of last mile.” Plus, because these aerial vehicles will be visible to consumers in their yards and in their neighborhoods, this technology will be a frequent reminder of the shift from current norms.

Despite these concerns, McKinsey & Company found that 60 percent of survey respondents in China, Germany, and the United States say they are either indifferent to or prefer drone delivery. As I outline in the APICS magazine article, drone delivery offers quite a few benefits. One will be the ability to deliver goods to hard-to-reach places faster, which could actually make these vehicles enticing to both consumers and delivery professionals.

Similarly, automated trucks are bringing up some safety concerns as well, points out Roei Ganzarski, CEO of BoldIQ, a last-mile optimization software company. When automated truck accidents happen, people will be inclined to blame the technology, which will slow the progress of implementation, he says.

Still, Ganzarski believes automated trucks and drones will be statistically safer than human-controlled devices. “If you look at accidents, over 80 percent and [by some estimates] over 90 percent of accidents are caused by human error,” he says. “I have no doubt that Amazon will not release a drone into the public unless it is as safe as it could be. I have no doubt that Uber or Google or Ford will not release a driverless truck into the streets until they know it’s gone through all the tests. That’s not a concern of mine at all.”

I’m sure people were skeptical when trains, automobiles, buses, trucks, and airplanes first made their debuts, but now it’s hard to imagine life without these conveniences. I believe that, like their predecessors, drones and automated trucks are worth a try, and it will be exciting to see how these vehicles take on their own roles in the transportation and distribution landscape.

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Our customer GlobeAir shines in Europe

GlobeAir Reports VLJ Demand Surge

(EBACE Show News by Aviation Week)

^{GlobeAir founder and CEO Bernhard Fragner}

Textron Aviation has ceased production of the Citation Mustang due to low demand, but that’s not slowing Bernhard Fragner’s success with the VLJ in Europe. The founder and CEO of Linz, Austria-based air taxi operator GlobeAir reports a 14+% surge in VLJ departures from March 2016 to March 2017 compared to the year earlier. This follows GlobeAir’s 22% growth in VLJ air taxi operations from 2015 to 2016.

First quarter 2017 saw especially strong growth, averaging nearly 17% more demand than first quarter 2016. This, at a time when demand in Europe for larger charter remains flat compared to last year.

Fragner, among other European air taxi operators, saw the potential for VLJ air charter a decade ago. It has increased markedly in the past few years.

“Demand for business aviation is increasing…. People are increasingly waking up to the fact that in many cases it makes more sense to charter an aircraft or take a private jet ‘taxi’ instead, and avoid the huge financial cost and burden of owning your own jet.”

Fragner points out that the average mission in Europe is 1.5 hr. and the average passenger load aboard his aircraft is 1.4. Occasionally, GlobeAir’s Mustangs carry four passengers.

GlobeAir (Booth C64) now operates 18 Mustangs. Having reached critical mass with the type, the firm now permanently bases aircraft at Luton and Biggin Hill near London, plus Le Bourget, Geneva and Nice, along with Zurich and Munich.

BoldIQ members visit with the Army Rangers

Today, some of the BoldIQ team members were privileged to go on base to visit the soldiers of the 2nd Battalion of the 75th Ranger Regiment.

We got a briefing from the battalion commander, got to spend time with some of the soldiers during their day-to-day life (while not on deployment), and were shown some of the gear and equipment used in the field.

These are some of the country’s best…a well deserved title.

Drones, Hyperloops, and Automated Trucks Carve Their Distribution Niches

Jennifer Storelli

May/June 2017

In the last two centuries, planes, trains, and commercial trucks changed the distribution industry and improved the way goods are transported. Now, a new era of innovation is ushering in a second generation of these delivery vehicles, namely drones, hyperloops, and automated trucks. Like their predecessors, each has the potential to reshape the transportation and logistics industry with new capabilities and efficiencies. Although these technologies are mostly in the testing phases, each new vehicle shows promise in its own, niche area of the delivery landscape to ultimately complement both new and existing options.

From air to over there

In the past 14 months, tests by Amazon, Domino’s, Maersk, UPS, and others have shown the possibilities for drone deliveries in hard-to-reach places and less-populated regions. Last fall, UPS partnered with drone-maker CyPhy Works to conduct trial deliveries of packages to such locations. In September, the two companies staged a mock delivery of an asthma inhaler from Beverly, Massachusetts, to Children’s Island, Massachusetts, which is approximately 3 miles off the Atlantic coast. Jerome Ferguson, director of autonomous systems at UPS, deemed the test a success, noting that drones can provide critical services in crisis-response deliveries.

On the commercial side, Matt McLelland, innovation lab research manager at Kenco, argues that it makes the most sense to utilize drone delivery when it offers a clear advantage compared with other methods. “If you’re delivering a 5-kilogram package in the middle of nowhere because some guy lives on top of a mountain, and there’s a little dirt road, and a UPS truck would take an hour to get to the top of that mountain, and a drone can fly there in 10 minutes, I’d say the drone has an advantage,” he explains.

A similar situation in France propelled international parcel delivery company DPDgroup to use drones to deliver small packages to difficult-to-access locations. “In France, many villages are isolated in the mountains—some are even inaccessible during winter—and we also have small islands, so we have a lot of opportunities,” explains Executive Vice President Jean-Luc Defrance.

After two years of testing, the Aschaffenburg, Germany-based delivery firm received authorization from France’s Directorate General for Civil Aviation (DGAC) to make drone deliveries along a regular, 9-mile route. Once a week, DPDgroup’s drone flies itself along a pre-planned path from Saint-Maximin-La-Sainte-Baume to an isolated business incubator in Pourrières to service technology companies in the area. In order to comply with DGAC provisions, a pilot follows the drone route on a screen and is able to take control of the drone’s engine at any stage of the journey.

DPDgroup’s drone is capable of flying approximately 9.3 miles at a cruising speed of about 19 miles per hour while carrying roughly 3.3 pounds of cargo. Weather is rarely a limiting factor for these deliveries, as long as the wind speed is less than about 19 miles per hour and it isn’t storming or hailing, Defrance says. At both ends of the route, delivery terminals secure the landing, takeoff, loading, and unloading phases of the process.

Because of drones’ speeds and abilities to reach isolated locations, they enable delivery companies to offer a new service to their hardest-to-reach customers via same-day and time-window delivery of small items. “In rural areas, it’s expensive to deliver within a specified time window or same day,” according to McKinsey & Company’s September 2016 report “Parcel Delivery: The future of last mile.” The report goes on to say that drones are surprisingly cost-competitive in rural areas, at only approximately 10 percent more than the cost of typical delivery models.

If used just for this purpose, drone deliveries could make up 13 percent of anything-to-consumer deliveries by 2025. This equates to approximately 500 million items in Germany alone, McKinsey & Company reports. For the United States, this would require a fleet of 250,000 drones.

Of course, there are limitations to this delivery method as well. Again, drones are vulnerable to weather, and most have a relatively small weight limit of about 11 pounds or less, McKinsey & Company points out. Plus, the drones that are designed to fly long distances at a low cost are big and require landing areas of about 22 square feet, which is less feasible in urban areas but possible in rural environments. In addition, battery capacity—which usually lasts for 12–18 minutes of flight time—limits how far a drone can travel, McLelland says. As such, DPDgroup’s drone’s battery needs to be changed in Pourrières before the drone can make its return trip, Defrance notes.

However, one of the biggest challenges to drone progress is regulations, McLelland points out. In the United States, for example, drones must remain in the sight of the operator. This severely limits companies’ capabilities to use drones for last-mile deliveries in the United States and is one of the reasons why many companies are conducting drone trials abroad.

In spite of this, McKinsey & Company predicts that drone deliveries could become commonplace in developed nations within the next 10 years.

All aboard

While drones have the potential to revolutionize last-mile deliveries to hard-to-reach locations, hyperloops could transform how people and cargo are transported across long distances. “Imagine a container coming from China to Central Europe in 10 hours instead of two weeks and how that can drastically change the sup-ply chain,” says Andres De Leon Cebreros, chief operations officer for Hyperloop Transportation Technologies (HTT). “If we are able to manage freight by drastically decreasing the delivery times … we will have a much more agile freight industry.”

A hyperloop system—as imagined back in 2013 by Elon Musk, founder, CEO, and chief technology officer of SpaceX, among other roles—is made of two steel tubes welded together in a side-by-side configuration to allow for two-directional traffic. These tubes are supported by pylons and equipped with solar panels to help power the system. Inside the partial-vacuum environment of the tubes, vehicles known as pods are propelled by linear-induction motors and supported by low-friction air bearings that use a compressed air reservoir and aerodynamic lift.

Since 2013, a few other companies have come up with their own hyperloop designs. Los Angeles-based HTT’s model is designed to send a pod carrying a 40-foot container through the tube every 40 seconds at speeds as fast as approximately 746 miles per hour, Cebreros says. Toronto-based TransPod has achieved similar speeds. Sebastien Gendron, TransPod’s founder and CEO, says this can cut the travel time from Toronto to Montreal—which usually takes 6 hours by car or 1.5 hours by plane—down to 45 minutes. Gendron also points out that hyperloops have multiple added advantages compared with other types of transportation:

• Lower cost: Hyperloop transportation will be priced at a lower rate than air freight, Gendron says. In addition, he estimates that installation costs are on par with those of the high-speed rail industry, at approximately $18 million–$24 million per mile.
• Reduced fuel consumption and emissions: Transpod’s system is designed to run on renewable energies, including self-sustaining solar power, thereby reducing emissions and eliminating the trans-portation mode’s dependency on fuel. By comparison, high-speed rail requires electricity, and cars, trucks, and planes require fuel.
• Fewer weather delays: The self-contained, low-pressure tube envi-ronment of hyperloop systems is impervious to weather delays.
• Improved customer service: “Delivering a superior customer experience is now a commodity that differentiates leaders from laggards,” Gendron says. “The ability to … ship products at ultra-high speeds will provide consumers with positive experiences about purchasing from these businesses, serving as a reason to encourage repeat patronage.”

Of course, hyperloops have their limitations as well. For example, size could be a constraint, according to the US Department of Transportation’s July 2016 report “Hyperloop Commercial Feasibility Analysis.” The hyperloop tube needs to be three or four times the size of the pod. Therefore, in order to accommodate a pod carrying a standard 10-foot by 10-foot by 40-foot container, the tube diameter needs to be fairly large, which might not always be feasible. Also, cargo weight limits, which have not yet been determined, will restrict the types of cargo that can be shipped via hyperloop. At present, TransPod is targeting a 10-ton pod capacity, Gendron says.

Beyond working out any technical details, the next steps will be addressing infrastructure and, as with drones, regulations. Still, hyperloop companies are pushing full speed ahead toward implementation. HTT currently is conducting research and development projects in Toulouse, France; Brno, Czech Republic; Abu Dhabi; Bratislava, Slovakia; and Quay Valley, California. TransPod expects to have a commercially viable product available by 2020.

Everywhere in between

While hyperloops can help with high-speed, between-city distribution and drones can facilitate deliveries to rural and difficult-to-reach locations, automated trucks can help handle the opportunities in between. “When you are looking at long distances across highways, the driverless truck will be a huge benefit,” says Roei Ganzarski, CEO of BoldIQ, a last-mile optimization software company. He notes that this type of vehicle has more flexibility than a hyperloop because it can travel to different buildings and depots, rather than only to and from specific stations.

Otto, a subsidiary of Uber, conducted a high-profile demonstration of this technology last October. Otto’s self-driving commercial truck hauled Budweiser beer more than 120 miles on the highway from Fort Collins, Colorado, to Colorado Springs, Colorado. A licensed driver was on board to handle the non-highway driving and to guide the vehicle onto and off of the highway but then only had to monitor the truck from the sleeper birth, as the driving automation system handled all of the highway driving functions.

Even though this automation concept may be new to on-theroad vehicles, similar technology already is being used on planes and ships. Pilots and captains handle the more difficult parts of the trip, such as takeoff and landing or entering and exiting a harbor, but an automated system and sensors control the tasks in between. Some of the systems and technology used in automated trucks— including adaptive cruise control, active brake assist, and lane-keep assist systems and cameras—also are commonly used in passenger cars, points out Sean Waters, director of regulatory affairs and product compliance for Daimler TSS.

Daimler Trucks North America’s Freightliner Inspiration truck—which was introduced in May 2015—is equipped with Highway Pilot, an SAE Level 3 driving automation system that can take control of the driving functions of the vehicle, including steering, accelerating, and braking. The system is designed for highway driving, because highway road conditions are relatively well controlled, predictable, and less complex, Waters says. “Lanes are typically well marked, access is generally not allowed for pedestrians or bicyclists, intersections are rare, and there are seldom traffic signals—all of which make automating the driving task easier.”

Here’s how the system works: As soon as the truck is started, its camera system begins monitoring road conditions. Once lane markings on the highway are detected, the driver is able to engage the driving automation system. In this mode, the truck autonomously stays in its lane and maintains a safe following distance behind the vehicle in front of it. If the vehicle ahead of it slows down or brakes, the truck does the same. While on the highway, the driver only needs to take over if the lane markings become illegible to the camera system—whether because of deterioration or inclement weather—or if the driver would like to change lanes or exit the highway. If the truck determines the driver needs to take over, an escalation scheme involving visual, audible, and haptic feedback mechanisms alerts the driver, and a countdown sequence prompts him or her to retake control.

Because the Freightliner Inspiration Truck is equipped with an SAE Level 3 driving automation system, the driver must remain in the driver’s seat for the duration of the trip. However, he or she is free to handle other operational and logistics tasks, such as scheduling future load assignments or coordinating with shippers, while the truck handles the driving. “Internal studies within

Daimler have shown relieving the driver from the monotonous and fatiguing task of driving a truck—even temporarily—can leave the driver feeling more refreshed and less drowsy,” Waters says. Tests are still being conducted to determine the best ways to keep the driver alert and ready to take over vehicle operations. “A more cautious approach is to periodically prompt the driver to place his or her hands on the steering wheel for a short time,” he explains. “Other approaches involve additional sensors that monitor the driver’s head position, open eyes, or other physiological markers for alertness.”

The reduced stress of the job coupled with the new, high-tech aspects of the role could make the truck-driving profession more attractive to younger, more digitized drivers, who could help fill the industry’s talent gap, PwC suggests in its 2016 report “The Era of Digitized Trucking.” The American Trucking Associations reported a shortage of 48,000 drivers in 2015, and this is only going to worsen as the current population of drivers ages into retirement, Waters notes.

The two other main benefits of this technology are safety and reduced costs. The US National Highway Traffic Safety Administration reports that nearly half of all fatalities happen on highways, and 94 percent of accidents are caused by human error. Taking the human out of the equation, or at least reducing the human’s role, will reduce the accident rate. The number of accidents caused by mechanical breakdowns also will be reduced because the system will constantly monitor the mechanical systems and alert the driver when repairs or preventive maintenance is needed. Plus, the technology adds efficiency to the acceleration and braking processes, thus reducing fuel use and emissions. Although exact cost savings are not discernable at this point, PwC estimates that fleet owners could save $19,000–$36,000 a year per truck, depending on regulatory changes and the stage of automation utilized.

PwC predicts that the development and implementation of automated trucks will come in stages. “Within the next 10 years, drivers may not be needed in long-haul trucks anymore, but will continue to take over trucks entering urban areas … and for local deliveries,” it states.

Merging futures

As these new solutions are further developed and tested, experts stress that these technologies will not replace existing modes of transportation. Instead, they will enable the transportation and distribution industries to unlock efficiencies in specific areas and explore new distribution territories. Drones will enhance the industry’s ability to deliver to hard-to-reach locations, hyperloops will speed up the time it takes to traverse countries and continents, and automated trucks will digitize the trucking industry to reduce the stress of highway travel for human drivers. With these new options, the transportation and logistics industry will be able to increase the speed and ease with which goods are shared and create an ever-more connected world.

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Amazon’s new cargo hub and its implications within the industry

Can Competitors Survive If Amazon Enters the Logistics and Transportation Industry?

Amazon recently unveiled plans to build a $1.5 billion air cargo hub at the Kentucky airport to accommodate its growing fleet of Prime delivery jets. Similar to the way Amazon initially developed AWS to meet its own cloud needs, then offered it to the public, this initial cargo hub is probably only the tip of the iceberg for Amazon delivery offerings in the future. How will this affect the traditional transport and delivery giants like FedEx, DHL and UPS, the mega-retailers, and the users of these services?

When Amazon, one of the largest retailers and movers of goods, chooses to move transportation and delivery in-house instead of outsourcing to other carriers, it eliminates business as usual with today’s supply chain businesses and impacts the way the third-party carriers plan for future growth. Traditional carriers can no longer ‘rest on the laurels’ of their previous successes. They will have to look for ways to provide more value, including better reliability, efficiency, speed and convenience, to their customers at a lower cost. This will be challenging for companies that aren’t as dynamic and innovative as Amazon and perhaps culturally, aren’t willing or able to take risks like Amazon.

Carriers won’t be the only businesses that will be forced to evolve if Amazon’s expansion into transportation and logistics comes full circle. Retail giants are already investing in providing an improved delivery experience for the on-demand economy. Back in the day, Wal-Mart did some amazing first-of-its-kind practices from how they managed stock in their warehouses and stores vis-a-vis their suppliers, to using jets to efficiently move management around. Many competitors then followed suit. Now Wal-Mart is the one following Amazon, further evidenced by its recent acquisition of Jet.com and clothing line, ModCloth. What’s more, Wal-Mart is now trying to ‘one up’ Amazon on its two-day shipping by offering it for free with no memberships fees. Nordstrom, the epitome of in-store (brick and mortar store, of course) customer service, tried to get in on the online trend, but had much less success than they had hoped, recently laying off a significant part of the tech team. This is just a small sample of what is yet to come. These moves are creating an environment ripe for innovation, convenience, higher value and service levels, where it was once not possible.

All this competition and innovation creates opportunity and increased demand for companies supporting the transportation and logistics industry. Manufacturers of airplanes (Boeing got the 767 deal for Amazon’s Prime Air), trucks, drones, bots, pallets, dollies, loading equipment, cargo tracking, uniform makers…and the list goes on. Individuals and businesses shipping packages will also benefit. If Amazon enters the shipping industry, businesses will now have another great option to select from when shipping their packages and goods. Moreover, this new entrant will force moves toward higher levels of efficiency at lower costs at the other carriers as well. Thus, shippers (be it companies or consumers) will benefit.

So, is it likely we’ll see Amazon enter this market and drive change? If the evolution of AWS is any indication, yes. Amazon created AWS to address its own cloud needs. Prime Air and the new cargo hub will work to solve Amazon’s fulfillment and logistics needs, but are easily extensible to future ecosystem players in the supply chain. The Kentucky airport is nicely positioned for this due to location and potential reach. When setting up a hub of this size, with potential growth projections, an airport that is conveniently located to fly short and long distances is a plus. It needs to be easily accessible both by air (an uncongested or less congested airspace) and by ground (so that trucks and vans can easily and quickly access the hub). Following Kentucky, we may see Amazon open a similar hub somewhere in Asia to accommodate the amount of cargo they ship from the region. China, Vietnam or another key manufacturing arena would be probable. After establishing the two initial hubs and officially entering the logistics and transportation industry as a provider, Amazon may look to expand across the U.S., Asia, Europe and other regions as they grow.

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3 Steps to a Demand-Driven Supply Chain

The on-demand economy means customers expect instant gratification via immediate access and convenient delivery options. Companies must adapt and start optimizing their supply chains to stay competitive.

Many companies are still supply driven, constrained by resource capacity, archaic scheduling technologies, and inefficient decision-making. Typically, these businesses match demand by increasing the supply and infrastructure to support it. To become demand-driven, companies must consider three actions:

Leverage real-time data. Data is key to providing valuable insights into what is working in the supply chain and what can be improved. Analyzing data in real time can help answer the most critical question: ‘What do I do now?’ Dynamic real-time optimization of the supply chain enables companies to use data to make rapid decisions and create actionable plans by taking all aspects into account.

For example, a same-day grocery delivery service may have extra delivery trucks on standby, ready for an influx of orders, to ensure it meets ad-hoc demand and delivery timeframes. Or alternatively it tries to ‘box’ its delivery schedules with large time windows to allow more perceived flexibility. This model is not sustainable.

What if the company’s supply chain was optimized to handle random ad-hoc same-day orders, completing all the deliveries with fewer trucks within accurate time windows? Leveraging data with dynamic real-time optimization, companies can consider all factors and determine what truck should take new deliveries while also keeping the rest of its previously scheduled orders on time.

Optimize staff. Having the right person at the right time is crucial for employers. Many organizations often understaff, overstaff, or assign one person to a task when another is better suited, impacting productivity and customer service.

Just as a company may overbuy delivery trucks to have on hand for surge times, it also tends to have more employees than necessary for the same reason.

Companies can do more with fewer employees if they properly identify the inefficiencies and constraints. With interruptions to staff availability, changing shift schedules and demand, as well as regulatory and operational constraints happening each day, businesses must be able to quickly adapt. Resource optimization can adjust accordingly and also take into consideration issues such as required breaks, logical shift planning, and who can best cover when an employee calls in sick.

Prepare for disruptions. Being able to adapt to any disruption keeps a business operating smoothly and efficiently. No matter the size of the disruption, the financial impact can be severe for a company with a supply chain that isn’t optimized and prepared to react in real time.

The key is making the supply chain nimble and able to react quickly with an actionable plan when (not if) a disruption occurs—mitigating as much risk and financial loss as possible.

If businesses leverage data to its fullest potential, converting it in real time to actionable operating plans, they could see a significant reduction in operating costs and resources, while also increasing customer satisfaction and improving the bottom line.

Click to read online at Inbound Logisitics

Industrial Distribution speaks with BoldIQ on Supply Chain

How Will Amazon’s Air Hub Impact Supply Chain Markets? by Mike Hockett

Amazon recently unveiled plans to build a $1.5 billion air cargo hub at the Northern Kentucky airport to accommodate its growing fleet of Prime delivery jets. Similar to how Amazon initially developed Amazon Web Services to meet its own cloud needs and then offered it to the public, this move may only be the tip of the iceberg, first addressing its own fulfillment/logistics needs, but easily extensible to future ecosystem players in the supply chain.

I spoke with Roei Ganzarski, CEO of supply chain software optimization provider BoldIQ, to discuss what Amazon’s air hub means for its internal supply chain, the ramifications for major logistics providers, and what’s next for Amazon in this area. Ganzarski is also former 13-year Boeing executive. Here’s our conversation:

ID: How would you compare how Amazon developed Amazon Web Services to how it is developing its own Prime air delivery?

Roei Ganzarski: I, of course, am in no position to speak for Amazon or why they do things. With that said, as an outside observer, AWS was initially set up to handle all of Amazon’s own internal needs. When they saw the power, quality, and potential of what they had for their own needs, they then offered it externally so that others could benefit as well. This is actually very logical and other companies have gone through the same roadmap. Amazon has now established its first aviation cargo hub to handle its own needs. It would not be a stretch to envision a not too distant future in which Amazon sees the power, quality, and potential of what they have, and offer it externally to any and all companies with cargo needs.

ID: Would you say geography is the main driver behind Amazon picking the Cincinnati/Northern Kentucky Airport for its air cargo hub? (centrally located between a handful of regional cities like Cincinnati, Columbus, Louisville, Indianapolis; short flights to/from Chicago, Cleveland, Pittsburgh, St. Louis, Atlanta, Philadelphia, etc.)

Roei Ganzarski: Geography, airspace and ground space and cost are key factors. When setting up a hub of this size, with potential growth projections, an airport that is conveniently located to fly short and long distances is a plus. But that is not all. It needs to be easily accessible both by air (an uncongested airspace) and by ground (so that trucks and vans can easily and quickly access the hub). And, of course, having it be affordable is very important. Bottom line, this location makes perfect sense as you would not expect to see this type of setup in a popular, crowded, major hub. At least not initially for internal use.

ID: Do you see this as being Amazon’s only U.S. air cargo hub for a while, or do you envision them establishing others – perhaps one on the west coast?

Roei Ganzarski: I personally believe we will see Amazon opening a similar hub somewhere in Asia. With the amount of cargo they ship from Asia, it would not surprise me to see them setting up their own cargo operations there. Perhaps China, Vietnam or another key manufacturing arena. Then, I would expect additional hubs to be setup across the U.S. and Asia followed by Europe and other regions as they grow.

ID: Overall, this air cargo may be just the next step in what seems to be Amazon’s overall goal of having complete management of its supply chain logistics and becoming independent from third party services. If that is indeed their goal, what are the ramifications for those other major logistics providers? (UPS, FedEx, etc.)

Roei Ganzarski: When one of the largest movers of goods (Amazon) decides to move transportation and delivery in-house vs outsourced to other carriers (UPS, FedEx, USPS, DHL, etc), it always impacts those carriers. When you project into the not-too-distant future, in which Amazon may in fact compete with these very same carriers, this becomes a real challenge the carriers have to start planning for. They can no longer ‘rest on the laurels’ of their previous success. They will have to look for ways to provide more value to their customers. More reliability, more speed, more convenience, all at a lower price and cost.

ID: What kinds of companies or service providers could benefit from Amazon taking over its supply chain? (drone makers, autonomous truck makers, retailers, freight logistics technology providers, etc.)

Roei Ganzarski: First and foremost, anyone shipping packages will benefit. Shippers will now have another great option to select from when shipping their packages and goods. Moreover, this new entrant will force moves toward higher levels of efficiency at lower costs at the other carriers as well. Thus, shippers (be it companies or consumers) will benefit. Naturally, anyone supporting Amazon in their endeavors will most likely gain as well. Manufacturers of airplanes (Boeing got the 767 deal), trucks, drones, pallets, dollies, loading equipment, cargo tracking, uniform makers…and the list goes on.

ID: How do you see this development by Amazon impacting other major companies like Alibaba, Walmart or Home Depot?

Roei Ganzarski: Innovative visionary companies drive growth and progress in their own industries and in industries around them. Back in the day, Wal-Mart did some amazing first-of-its-kind revolutionary things from how they managed stock in their warehouses and stores vis-a-vis their suppliers, to using jets to efficiently move management around. Many then followed suit. Now Wal-Mart is the one following Amazon. For example, Wal-Mart is now trying to ‘one up’ Amazon on two-day shipping and offering it for free with no memberships fees. This is just a small sample of what is yet to come. These companies are creating an environment ripe for innovation, convenience, higher value and service levels, where it was once not possible.

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