IAG Cargo and CargoAi: a new sustainable future

Start-up company CargoAi provide digitised solutions for the air cargo industry and accessible, sustainable features to help their customers start their net zero journey as soon and as seamlessly as possible. We spoke with Magali Beauregard, Chief Commercial Officer at CargoAi, about what they offer, why sustainability is at the heart of what they do, and the importance of their partnership with IAG Cargo.

Tell us about CargoAi.

We’re a tech company in airfreight and our mission is to bring the best practices and technology to the industry. Our team is made up of airfreight and technical experts – there is a constant dialogue between the two areas. This allows us to optimise technology and methodology in terms of product development with the airfreight team, who’re very knowledgeable about the manual or semi-manual processes in use in our industry.

Our goal is to make the whole booking process as efficient and smooth as possible. Procurement of airfreight has long been based on rates only. What we want to drive from the start is for procurement decisions to also be based on quality and other factors, like sustainability metrics, that go well beyond the simple price tag.

What has CargoAi introduced to the industry and what effects has it had?

Our core product, CargoMART, is not the first service product targeting the industry or its customers. What we’re bringing that’s new is our vision as CargoAi as the IT supplier for airlines and forwarders. We don’t believe that just providing the industry with an off-the-shelf application is going to solve all of the required user cases. We believe that we can leverage our unique skillsets and unique expertise which we have gained over the existence of CargoAi, to support the industry with customised solutions, especially in the area of building applications or supporting all sorts of integrations, as a real middleware provider.

We can see the industry over the last year has been going in the direction of a lot of bilateral point-to-point integrations, which is totally inefficient. We add a lot of value when we act as middleware by aggregating and working towards the standardisation of carrier data that we receive, which we can then redistribute to the forwarders or system providers. Acting as the industry enabler with regards to this connected ecosystem, is a vision that we deeply believe in and a mission that drives us.

Why do you think the digitalisation of air cargo has become a major trend in the industry?

There’s no other way really. Every company is becoming digital whether they want it or not. Digitalisation is a part of every aspect of our individual lives, and it’s the same on an organisational level. It’s like the air we breathe now, so foundational that you cannot call it a trend any longer.

Can you tell us about Cargo2ZERO, the new sustainable feature on your platform?

It’s really exciting. From the beginning, our mission isn’t just to steer procurement transactions based on prices, but also steer these decisions towards the most sustainable options available out there. With Cargo2ZERO we’re leveraging our position as the industry marketplace and aggregator, as we have a unique position between the carriers and forwarders, not only from an integration perspective, but also from a data and influence side as well

In a nutshell there are two sets of solutions – the suite of sustainability data and the SAF purchase. On the data side, we offer CO2 solution calculations, which are embedded in all workflows powered by CargoAi. On a shipment level, we’re providing the data to inform clients about their carbon footprint and about how optimised their procurement decision is using a CO2 efficiency score.

Then, in late 2022, we announced a partnership with Neste, who is the leading producer worldwide of SAF. Our goal is to enable any forwarder access to SAF at the transactional level for one booking or for bulk purchase, for any volume share, ranging from 1 per cent of SAF to100 per cent SAF. We want to help educate the industry about the urgency needed for pivoting to radically more sustainable procurement decisions and give clients tangible solutions to reduce CO2 emissions.

A commitment to sustainability is something we value in our partners. IAG Cargo meet this expectation with their commitment to driving sustainable initiatives for their customers, such as the selling of SAF.

Other plans for offering a more sustainable service?

The SAF purchase was a very big launch for us. We will continue to build on our suite of sustainability data to leverage our position as a data aggregator and many small to middle-sized carriers have reached out to us to take a step forward with their own SAF offering, which we can support from a technology and resource perspective. This will keep us busy in the next few months.

We’re also working on a couple of projects to support clients in refining the sustainability data they work with.

Why do you think sustainability has become such an important factor in the air cargo industry?

The world has undoubtedly pivoted on prioritising sustainability. There is a consensus amongst leading aviation and airfreight organisations to set science-based targets to become net zero by 2050, and IAG Cargo is already leading the way with their targets. Its parent company, IAG, is already the first European airline group to commit to 10% of its fuel as sustainable aviation fuel by 2030. We can see that some companies are driving it with set targets already, however, we can see a real divide between very large organisations who have the knowledge and resources to drive this on both strategic and tactical level, and the others, where sustainability has not made progress beyond, if at all, the awareness stage.

In our industry, a similar thing happened previously with E-AWB, where it took more than a decade to get the long-tail customers on board. For sustainability, we don’t have the luxury of such a long time frame to pivot though. In 15 years, we should have achieved such significant reductions in CO2 emissions that we would be left with the last miles on the pathway to achieve net-zero by 2050. So it’s great that we’ve got a few big players already on board who are going all-in with their long-term sustainability plans, but we want to empower and enable smaller customers too to make significant contributions, because the whole industry needs to move at pace and scale.

How does your partnership with IAG Cargo benefit freight forwarders?

IAG Cargo is part of our portfolio of connected carriers that we distribute – we have upwards of 70 carriers, connected through CargoAi and visible to our forwarders worldwide. It’s a great opportunity for us to have the full portfolio of airlines represented by IAG Cargo available to forwarders, who’re wanting to have access to different channels and ways of booking. IAG Cargo offers an extensive network to destinations all around the world which meets customers freighting needs. We’re offering customers efficiency, speed and reliability on the quoting, booking, tracking and overall shipment management processes.

Do you have any goals for 2023?

I would certainly recommend your readers to watch the CargoAi space in 2023! We’re currently fine-tuning the release of one major product development – that’s still under wraps at the moment, but it means we will be strengthening our market presence – even though we already have users in 108 countries. We plan to continue to grow our team with developers, marketing, sales and customer-facing roles to further strengthen our product portfolio and provide a solid customer interface in the various markets. Overall, as a start-up, it’s critical that we keep on adding value to our clients and partners and it continues to be a very exciting mission.