Airfreight Industry, Quo Vadis? Part 5

Documentation, e-freight, e-AWB, Processes.

In this series of articles disruption is the keyword, and we look at various areas in which the traditional airfreight industry needs to be streamlined and simplified, so as not to be swept away by something completely new and innovative, as is happening in other areas, where new mobile internet technology is making traditional business models obsolete.
Last Monday, our author Mark Grinsted focused on the annoying issue of overbookings and offloads. In this essay he asks if the cargo industry has really made any substantial progress in paperless airfreight documentation during the last 40 years. His gloomy conclusion: the cargo industry has merely reached an “Airfreight 2.0” level – if at all. Enjoy reading!

In the last few years – or decades? – we hear so much about the e-words: e-freight, e-AWBs, e-bookings. But what is the reality and what is just hype?

Early days
When the author of this article worked for Air Canada Cargo in Frankfurt in the 70’s, even those early days the complete AWB data were entered into Air Canada’s central computer system. Yes, there were already computers in those days! The original AWB was not sent in the pouch; just one copy was attached the accompanying documents to identify which shipment they belonged to, and the rest was thrown away. At destination, the computer data were used to reprint the AWB, complete with collect charges, where applicable, already converted into local currency. And the electronic data were also sent to the accounting headquarters in Winnipeg for accounting purposes. A paperless process! The same applied to import shipments. Despite all the hype now-a-days about e-AWB and e-freight, has the airfreight industry really made any progress since those days so far away?
This example illustrates two aspects essential to any introduction of paperless airfreight:

Nothing New
Firstly, technologically the e-AWB is nothing new at all. Instead of just talking about it and patting our own backs for moving a shipment of documents from Frankfurt to a customs-fee destination on an e-AWB, we should rather put all our efforts into removing, one by one, the obstacles which have prevented the worldwide introduction of e-AWBs as the industry standard in the past decades.

Our author Mark Grinsted focuses on the weak spots of the cargo industry in his series
Our author Mark Grinsted focuses on the weak spots of the cargo industry in his series

Accompanying Documents
And secondly, this example shows that the problem is not so much the AWB itself but the accompanying documents. So long as these are in paper form, the cargo pouch will continue to be full of all sorts of documents: commercial invoices, packing lists, certificates of origin, customs documents (e.g. T1, Carnet-ATA), and, if any of these are missing when the shipment arrives at destination, the effects will be just as severe as when the AWB is missing.
The e-AWB is therefore only a small part of a general problem. We need a concerted action by all players in the worldwide airfreight industry: Exporters, forwarders, airlines, handling agents, customs, etc., to standardise all transportation documents in electronic form.

 

EDIFACT
A platform already exists, since 1987: EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) under the control of the United Nations Centre for Trade Facilitation and Electronic Business (UNCEFACT). Meanwhile numerous standard EDIFACT message types have been defined, comparable to the standardised Cargo-IMP messages (FFR, FSU, FBL etc) which have been in daily use ever since the early days of airfreight and telex-machines.

Not Our Problem?
Some will say it is not the airline’s problem to transmit the accompanying documents in electronic form. But it is, since it is the airline who transports these documents in paper form and is held liable if they do not arrive with the shipment. In more and more countries, it is the airline who is responsible for the (electronic!) transmission of shipment data to the customs authorities. And it is in the vital interest of the whole airfreight industry to speed up processes and improve the quality of the airfreight product.
The airfreight industry is lagging far behind the technical possibilities and developments in industry in general. While manufacturers are talking about “Industry 4.0” the airfreight industry has not even got as far as “Airfreight 2.0”- if we count “Cargo 2000” as “Airfreight 1.0”

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Fragmentation
Compared with other more progressive industries, the airfreight industry faces problems very specific to this industry: The international nature of the business, the fragmentation of the participants in the process, the lack of one large market leader with sufficient financial power to forge ahead and pull the rest of the industry with it.
The international nature of the business means that all processes must be workable in all countries, independent of their infrastructure. The chain is only as strong as its weakest link. As long as, for example, a customs officer somewhere in China can put a shipment on hold as long as the red (and not any other colour!) original AWB is not available, we are not going to make much progress with e-AWBs.
The fragmentation of the industry means that solutions must not only work in all countries, but must also be workable for all participants in the airfreight transportation process: Airlines, Forwarding agents, Cargo Handlers, Ramp Agents, General Sales Agents, Trucking Companies, and, last but not least, Customs Authorities. In general, these are all small to mid-sized companies, all fighting for survival, with limited financial resources and certainly wary of investing money in new technologies without being sure of a return on investment. But the result is stagnation if everyone just follows his own local interests. There is even a new fragmentation developing: Airlines each with their own different online booking systems.

And today?
The technology of the early days of airfreight may have been very basic, but at least clearly-defined Cargo-IMP messages and a telex-machine in every airfreight office provided a reliable minimum of standardisation all over the world. And today?

 

Mark Grinsted

Postscript:
Readers are cordially invited to send their inputs and post comments or make suggestions for additional cargo themes worth to be elaborated in depth by Mark and published on our CFG portal.

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