Background: Why invest in advanced logistics systems for baggage?
Dubai International Airport (DXB) serves an important hub between the United States, Europe, and Asia. It is one of the highest traffic airports by number of passengers in the world, with over 80M traveling in 2017, and future growth projections to reach 103M by 2020. The increasing scale of DXB poses a high level of operational complexity that warrants the use of highly digitalized platforms. Passengers utilize over 90 airlines to travel to more than 240 destinations on aircraft carrying 2.5M tonnes of cargo every year, and hold high expectations for a seamless experience from gate to gate.1
Poor experiences, such as those created by difficult baggage check-in procedures, security risks, and lost baggage, can lead passengers to choose alternative modes of transportation (e.g., car, train) or to utilize other airports for their travel.2 At a higher level, a lack of investment in DBX’s baggage systems could also lead their airline partners to choose to avoid DBX within their network planning when making decisions for future routes. Together these competitive growth opportunities and operational risks make a solid case for DBX to continue to invest in a well-integrated, advanced logistics systems for baggage.
Strategy: How is Dubai International Airport investing in baggage handling?
Dubai International Airport invested $700M to construct a high-speed track system with a sorting capacity of 15,000 pieces per hour. The process begins at check-in with auto-generated baggage tags that store information on passengers’ bag type, airline, and unique ID. Bags are deposited into yellow baggage trays with RFID technology that allow them to be closely tracked throughout the process as bags travel up to 85 miles in distance on conveyer belts from gate to aircraft. 3 Underlaying this advanced conveyer belt sorting structure is powerful warehouse management system that allows the airline to keep track of baggage flows throughout the system and make adjustments where necessary. 4
In the near-term DBX is continuing to invest in optimizing their baggage logistics system to mitigate against risk of system downtime which could otherwise result in flight delays and lost baggage at the expense of airlines, passengers, and DBX’s reputation for operational excellence and quality service. 5 Longer term, DBX must continue to think about their ability to scale systems to meet increases in passenger demand through Dubai and what that may mean for expansion efforts for serving new terminals or possibly even a new airport. 6
In addition to these steps, I’d urge DBX to think more broadly about how they can better anticipate demand on their system and incentivize passengers towards creating a more fluid operational environment. For example, DBX could offer a small food and beverage retail credit to passengers willing to check-in baggage a few hours earlier. DBX should also be proactive in gaining feedback from airlines on how they can better integrate operations to create efficiency and customer stickiness within their service offering. For example, integrating baggage data with airlines’ passenger data could help facilitate the transfer of mutually beneficial operational information (e.g., which passengers may have been re-routed and therefore need their bags to follow). These offerings would provide a huge value add in allowing airlines to save on operational costs and increase their passenger experience.
Future thinking: What’s next in the digitization of baggage?
The technology currently being used at DBX has the potential for much wider applications that could better serve passengers, while also enhancing airport security and operational efficiency at DBX. To illustrate, I’ve provided two examples of potential opportunities below:
1. Home to destination baggage services: Could DBX utilize smart scanners and RFID technology to allow customers to send baggage straight from their homes? This could allow passengers to travel more seamlessly through the airport while sending the entire baggage process behind the scenes requiring even less human touch.
2. The next generation of smart baggage: What opportunities for partnership exist between airlines, airports, and consumer companies to create smarter bags? Enhanced baggage technology could allow a higher level of transparency regarding baggage location, weight, contents, and ownership throughout the journey.
 “Dubai International Airport Facts,” Dubai Airports Corporate Media Center, November 2017, [URL], accessed November 2017.
 Dale Fodness, Brian Murray, (2007) “Passengers’ expectations of airport service quality”, Journal of Services Marketing, Vol. 21 Issue: 7, pp.492-506
 “City in the Sky,” PBS, February 2017, [URL], accessed November 2017.
 “Siemens Baggage Handling System Dubai International,” Siemens Media Center, June 2013, [URL], accessed November 2017.
 “Dubai airport records 83.6 million passengers in 2016,” Gulf News: Aviation, January 2017, [URL], accessed November 2017.
 “Innovative Siemens software for end-to-end digitalization of air cargo processes in Dubai,” Siemens Media Relations, September 2016, [URL], accessed November 2017.