Innovative Disruption Brings Breakthrough

In today’s digital world, innovation is a key trait that great companies possess. Whether you’re talking about Google, Amazon, Alibaba or so many others, their ability to continually innovate and expand their vision is paramount to their success. Innovation used to be driven by necessity, with necessity being the proverbial mother of invention. We innovated to make life easier on us (washing machines) or make things easier to build (steam cranes), safer (electric lights), more efficient; and you can easily name a dozen of others. But as the digital age came upon us our innovation was guided by new principles and a series of questions, including “WHY and WHY NOT”.

Today’s innovation uses technology to challenge existing norms and markets on a variety of levels. Many of the people in those markets initially believed their status quo was safe and things would never change. For instance, whoever thought something like ride-sharing would arise to be competitive to Taxis? But now, Uber dominates in many cities and has now extended into food delivery. Uber has recently announced it will expand into the delivery of “just about everything” in an attempt to disrupt Amazon at the local level1. These mega-successful market disruptions by Uber have been enabled by technology. Uber is now one of the top 250 most valuable companies by market cap in the world. And there are so many others, namely Tesla, Amazon, Apple, etc. All have changed their markets and what it means to compete.

The keyword is disruption. And today, companies must disrupt themselves or be disrupted by someone else. Where necessity is often the catalyst for innovation, disruption, or “why not” thinking are now keys to innovation. Organizations must think critically, learning to challenge their perceptions and accepted norms as concrete. And many organizations make this mistake concerning highly regulated environments. PayPal disrupted the regulated payments market, Sofi and Robin Hood challenged investments and in the United States, even the highly regulated Healthcare industry has been changed with innovative healthcare applications and telehealth.

Air Cargo is also ripe for disruption now. It has long been fairly uninterrupted, safe, and was often an afterthought for many passenger airlines, with about 1%-3% of their revenue coming from cargo. So, why bother? Sound familiar? But now, more than ever, Airlines are looking to grow their revenues, as well as create brand new revenue streams. Our customer Azul has innovated and is now the leading e-commerce logistics company in Brazil, and growing fast. They did not wait for the competition to force their hand and be the catalyst – “why not” was the catalyst.

The expected total sales in e-commerce globally will grow from an estimated $5 trillion sales this year to a projected $6.4 trillion globally in 2024. Therefore, the entire e-Commerce logistics market should be innovating and disrupting. Airlines, 3PLS, 4PLS, freight forwarders, first and last-mile ground delivery companies, as well as warehouse operators, must innovate to gain access to the fast-growing and very profitable e-commerce logistics market. There’s a bigger piece of the pie for Airlines now if they choose to disrupt and own more parts of the e-commerce logistics market than they had before. Yet many airlines are afraid to disrupt the longstanding ecosystem. My question then is, do you still want to own a taxi in New York City?

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