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CargoTech hungry for growth

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Air cargo technology group CargoTech is pursuing growth in its portfolio of companies with change management and large language models (LLMs) in mind.

Cédric Millet, president of CargoTech, says the group is “aggressively” looking for companies that can fill gaps in its skill set.

CargoTech currently includes Singapore-based online booking portal CargoAi, cargo optimisation firm Wiremind Cargo in Paris, ECS’s Cargo Digital Factory, also in Paris, Amsterdam-headquartered data provider/consultant Rotate, and digital air cargo charter firm CharterSync, located in London.

Now the group has identified “two potential targets” working within change management and LLMs to join the group and is currently focusing on progressing these opportunities.

“I strongly believe that change management is something that should be offered within CargoTech,” says Millet.

In addition to change management, CargoTech is also in the market for a specialist in the field of LLM, a type of artificial intelligence (AI) algorithm that uses deep learning techniques and vast data sets to understand, summarise, predict, and generate content.

“We are looking at where we could find a company that could fill that gap,” confirms Millet.

He clarifies that all the companies in the group are currently working on LLM development but having a company that is already an expert could accelerate the adoption and use of the technology with the other members.

There are some core conditions in place to assess the suitability of a new company for the group, says Millet.

Any company joining needs to add value to the group, while its focus areas shouldn’t overlap with those of any other company in the group, he stresses.

“It needs to be complementary. We don’t want to create competition within the group,” he stresses.

Additionally, any new companies need to develop in parallel with the others, rather than a situation where the group operates as “one big company developing in sequence”.

On the topic of growth, consolidation is something that Millet is wary of. “I don’t think it’s for the best,” he says.

“It creates a mammoth organisation which makes it difficult to deal with, alongside lack of flexibility, and customisation is almost impossible unless you want to pay a high price.”

He adds that larger organisations “can be too big to sell solutions that are implemented quickly and bring benefits rapidly, and to adapt to the evolution of the marketplace”.

Image source: Pixels Hunter/ Shutterstock

Making digitalisation pay

Aside from adding new companies to the group and a focus on continually developing digital solutions, CargoTech is this year placing a greater emphasis on coordinating sales strategies and “commercial synergies” Millet says.

The group is looking at synergies that it can achieve in terms of technology, staff, support structures, he explains as an example.

There are also a couple of major challenges for air cargo technology, including change management.

“Anytime you want to have a digital transformation in any kind of industry there is a big resistance to change. It’s endemic,” reflects Millet.

Another major challenge is that investing in digitalisation is still an area of uncertainty for financial decision makers in companies.

Digitalisation began to accelerate during Covid because of the need for more cargo visibility, then further developments were geared towards the need for revenue optimisation, while now lower air cargo demand has put financial pressure on digitalisation to deliver productivity improvements and facilitate cost cutting.

But at the same time, this financial pressure means that companies are “hesitant to invest in technology”.

Millet stresses that: “Technology is a necessary investment to be able to achieve productivity improvements and revenue increases.”

Speaking further on the hesitancy of investing, he says that generally the direct benefits of digitalisation –  that is the link between technology and productivity, cost cutting and efficiency is understood.

However, he says: “The productivity increase and the cost decrease is not what brings the highest benefits in terms of the bottom line.

“What brings the highest benefits in terms of bottom line is your revenue increase. And the revenue increase you will get by having revenue optimisation systems for bookings, and visibility of customer traffic flow.”

Uncertainty or scepticism about the business case for technology can cause a “disconnect” between stakeholders at the coalface of cargo operations, so to speak, and its financial management or funders who are less involved with the workings of technology. “That’s where sometimes the challenge can be,” says Millet.

That said, he points out there is a difference between technology with a long results timeframe and those applications with quicker results.

Cargotech, for example, has “plug and play” modular solutions designed to be scalable, quick to implement and with immediate benefits.

It’s fair to say that technology investments are less likely to happen when there are financial pressure and challenges, but if those holding the purse strings can’t be convinced by the argument for revenue improvements then the business case for sustainability might win them over.

Technology enables the switch from paper to digital, the adoption of online processes that speed up handling, and provides insight into how to make operations more efficient.

Millet stresses that the only way to make businesses sustainable is by adopting digitalisation.

“To make it sustainable you need to make it digital. Otherwise, it will not work.”

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