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Fear of disruption is misplaced – as it is only innovation done by someone else.

So said Brendan McKittrick, chief technology officer of Mercator, an IT company which seems to be steaming back into the air cargo market in a big way.

Mercator itself is innovating, it says, keeping disrupters at bay. It was plugging its warehouse app at WCS last week, a clever device which is the first in a series of apps to be rolled out as part of its newly launched Intelligent Cargo Ecosystem.

It was developed with a “team of user-experience guys,” explained Mr McKittrick. “We re-imagined it and asked ‘is there a smarter way’?

“Technology is irrelevant, if it works. The question is, how do I progress by using it? Technology has been around for a long time – but what does it change for the user?

“Technology has to be for the customer. You need to keep drilling down.”

He added that his career had begun in cargo, and he had only just returned to it – “when I came back, I realised that not a lot had changed in 20 years”.

He believes disruption is only caused when there is a gap existing players fail to fill.

 

“The only reason Uber was successful is that the taxi industry hadn’t done it well. So if we don’t do it well, someone else will.”

Pointing to Amazon, he added: “Prime Air is now one of us – it is not a disrupter. It will bring the best of technology to bear.

“Amazon succeeded by having a very simple user experience. Prime Air will be hi-tech enabled. And it will increase the cargo it carries to include others, not just its own. It is building it up itself. Which suggests there are areas which are ripe for improvement.”

Michael Steen, chief commercial officer of Atlas Air – and provider of some Prime Air capacity – urged the air cargo industry to respond to the new players.

“I don’t see the industry responding to companies like Uber Freight – and it needs to. We need to ask: how can we disrupt ourselves? We should look at ourselves as enablers.”

Essa Al-Saleh, chief of Agility Logistics, agreed that change had already come.

“We are already being disrupted – look at our margins. We are in disruption mode. And look at the equity capital going in. It is happening.”

While much of the focus on equity coming into cargo has been on new technology companies in Silicon Valley, Mercator was this year acquired by private equity company Warburg Pincus – as was aviation passenger technology company Accelya. Yesterday, their owner announced a merger between the two.

Interestingly, Accelya is run by former CHAMP management – CEO John Johnston, CFO Susan Boulton and vice president James Fernandez all went over to Accelya, the latter pair in May last year.

Mr Johnston was yesterday named CEO of the merged entity.

Competition between a newly boosted Mercator and CHAMP is set to be fierce. But, said Mr McKittrick: “If a company comes up with something innovative, that’s a good thing. It creates a more competitive environment that gets the best out of all of us.”

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  • miles@cetuslabs.com

    March 21, 2017 at 4:40 pm

    Great article and an interesting perspective from Mr. McKitrick. I admire his initiative and Mercator for “reinventing themselves.” Unfortunately, if innovation was that simple everyone would be doing it.

    Especially if it’s easy to “pick up a few user experience guys” which probably means the project was outsourced to another firm that does not fully understand the business. Whole departments are needed within enterprise organizations – and maintained. Good software is like gardening, it needs to constantly be evolving and as Mr. McKittrick said, needs to respond to the customer. Development is a constant task and this is how real innovation is done. The second that Mercator puts its foot off the gas, is the second that another player is coming to overtake it. (Note: I do not have full context into the company, scenario, but just speaking from an industry perspective.)

    The reason why enterprise organizations fail to innovate is that they’re hindered by the overhead, red tape, and burden of getting approvals to move. Once large companies go public, they must exceed investor expectations – increasing growth rate exponentially. To constantly improve results means to constantly be innovating and finding new markets. This is nearly impossible to do for large organizations. Instead, it’s better for enterprises to acquire a startup and let it run autonomously – freeing it from the burden and operational overhead that slows down the organization. (But don’t take my word for it, take it from Clayton Christensen, tenured Harvard Business Professor and researcher in his amazing book, The Innovator’s Solution.)

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