E-commerce ‘virtual integrator’ service e-SmartLogistics launches
This article was originally published by Charlotte Goldstone on CA&AS.
Long-standing air cargo and logistics executive Denis Ilin has launched a new business to support air cargo carriers and stakeholders to become air logistics ‘virtual integrators’, able to offer e-commerce customers an end-to-end logistics service and improve margins for air cargo providers.
Some of the solutions offered by e-SmartLogistics are reportedly already being used by Amazon to help manage its imports into the UK, with strong interest from a number of other players.
Ilin says e-SmartLogistics can develop and provide end-to-end logistics solutions for e-retailers directly, as well as jointly in cooperation with airline partners, promising “quick, reliable and transparent parcel delivery, through an affordable solution to e-shippers which is economically viable for air carriers”.
After working for many years within air cargo, including as president and CEO at AirBridgeCargo Airlines, Ilin spent four years working as a VP of a national postal provider, responsible for cross-border e-commerce. There, he turned the company’s “ever loss-making” postal product “into a profitable business with 30%+ margin, by transforming the company from a last-mile sub-contractor of e-commerce customers to a full end-to-end e-commerce logistics provider”.
That led to him independently developing the e-SmartLogistics concept and solution, “which could be used by airlines to offer a to-door e-commerce product, increasing airlines’ own margins while offering to the ultimate clients better quality, transparency and pricing”. He told CAAS that what most airlines are offering currently as an e-commerce product “is the same old consolidated cargo with e-commerce parcels inside”.
Adding a full end-to-end service, including full visibility of the airport-to-door process on a per-piece level, turns the carrier, effectively, “into a virtual integrator”, says Ilin, adding: “If airlines want to stay in the high-yield e-commerce game, they need to change their mindset to a ‘per-piece’ mentality of an integrator or a postal service – because this is the language the e-commerce industry speaks. E-SmartLogistics is prepared to assist its airline customers with that task, to develop such a product and offer it to the market.”
In discussions at the ACHL 2024 conference in Istanbul (see page 28), about the challenges of aligning and integrating the various fragmented players in the air logistics chain, Ilin observed that Cainiao was one of the only examples of “a successful integrator in e-commerce – a logistics provider, providing integrated solutions for e-retailers for every type of modality”. He said companies that ignore this potential would continue carrying and handling e-commerce cargo “at low margin, if any at all”.
Stan Wraight, CEO of the air cargo advisory company SASI World, has been talking for several years about the need for airlines to develop “virtual integrated” products, to turn the fragmented air cargo system “into an integrated delivery system for e-commerce shipments, express, and any vertical that requires speed, transparency, quality, compliance – and all at the lowest unit cost possible”. He observed that a typical current traditional air cargo rate from Chicago to Frankfurt is only US$0.60 to $0.90 per kilo, whereas e-commerce logistics providers are selling it for $6.
SASI World has been developing a ‘Smart Cargo Airports’ programme and is advising client airports how to develop their facilities, processes and procedures in order to be able to offer integrated and digital services to e-commerce logistics customers and carriers, and other promising markets. SASI World is now working with Ilin’s e-SmartLogistics organisation “to assist developing the combined end-to-end product, with a number of airports and carriers interested in or committed to the solution”.
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