The air cargo industry as it is created by the airlines and forwarders, is a true marvel of industry cooperation serving highly effective and efficient logistical solutions to a globalized world depending on reliable, quick and economical supply chains. The industry does that through a distributed delivery model with various types of companies, each playing their specific roles, say IATA Cargo officials, Glyn Hughes and Henk Mulder, along with Ariaen Zimmerman of Cargo iQ, acknowledging a certain diversity of messaging systems. These are their views:
For all these parties to work together efficiently, there needs to be a lot of information exchanged. One may say that efficient and reliable data exchange offers the foundation and the keystone
to the industry’s collaboration.
Efficient data exchange needs infrastructure, optimal standards and commitment. The International Air Transport Association plays a big role in creating these standards and promoting the industry to commit and support them.
Information exchange standards
IATA has been at the base of developing many standards for data exchange. There has been type B messaging, various versions of Cargo IMP, Cargo XML, and ONE Record is being developed. The reason that there have been so many standards is obvious: with the progress in technology and ever-increasing complexity of international trade, both the ability to exchange data and the need for specific data types evolved and the standards need to keep up.
Standards are important… they guide companies on their investments in technology and ensure compatibility between various systems. In that sense, standards reduce costs and facilitate the reliability of functionality. To do that standards have two very important requirements: they need to facilitate best practices, and they need to be adopted. Without adoption any standard is of little relevance.
Adoption of standards relies on their need or benefit versus the cost of adoption, and this is where the industry faces some of its biggest challenges. To implement new standards is costly and the distributed nature of the industry quite often leads to little benefits for individual companies, until their partners in the industry adopt these standards too.
To accommodate their partners as well as their own organization, many companies often facilitate backward compatibility or multiple standards. IATA and its members walk a thin line of introducing and promoting new standards without forcing their members into costs that they cannot justify. With too high a pace and no backward compatibility, the life cycle of standards would become too short and the risk to develop new technology based on these standards would be too high.
IATA and its members are nevertheless fully dedicated to innovation and standards that benefit the industry as is illustrated through, for instance, Cargo XML and the ONE Record initiative that will allow unlocking the benefits of modern linked data technology 1).
Messaging platforms and direct communications
As with every industry, the pace of adoption varies by company. As a result, various industry platforms have emerged that facilitate the exchange of data of different standards. These platforms allow different companies to have different standards and are therefore a great facilitator in the data exchange that the industry relies on.
This benefit is a double-edged sword, however: it allows introduction of new standards and enables the community to lag in adoption as well.
Besides cross platform compatibility, these platforms provide another benefit: reliable routing of information. To make sure data reaches the correct stakeholders, reliable routing and addressing needs to be in place. IATA cargo recently introduced a new program to help those communicating directly, as well as those through a platform, in their connectivity: IATA’s Enhanced Partner Identification and Connectivity program – EPIC 2).
e-AWB and its adoption
The e-AWB was introduced by the industry around fifteen years ago, addressing clear needs from the entire supply chain, as well as governments to come to a more efficient way of agreeing on and distributing contract details for the carriage of shipments. In essence, it was a digitalization of the Air Waybill document standards and conditions of contract. When introducing these standards, there were clear advantages for the industry in terms of efficiency. The reality of introduction was not that simple, though.
Centuries of legislation and trade customs do not get replaced overnight and given the interdependencies of the air waybill applications with legislation and settlement systems, complex contractual frameworks needed to be erected. So, besides creating a digital data infrastructure that would create the benefit from the e-AWB, there were a lot of real-world steps that needed to be taken.
Individual companies benefit differently from the implementation of the e-air waybill and in order to work together the companies in the middle of the air cargo process, such as carriers and their ground handlers, often must facilitate both paper as well as electronic versions of the air waybill. Given the additional costs of running parallel processes, the industry should be motivated to finalize this transition as quickly as possible.
The distributed service delivery model of the air cargo industry comes with great advantages: the industry has been able to create an incredibly reliable network at relatively low costs to the final shipper and the key to that is specialized companies that offer their services to various partners in the network: from sales agents, to ground handling agents, to trucking companies, and forwarders that provide the industry’s customer interface at origin and destination. One of the hurdles the industry faces is to make sure that information is shared by and reaches all parties involved.
IATAs’ ONE Record as well Cargo iQ work hard to offer standards for data sharing throughout the journey – including door-to-door– and with further evolution of new technologies such as mobile devices, interactive cargo and data formats, there is good hope that the industry will find a solution here as well 3).
Air cargo has a proud history of over 100 years working collaboratively and innovatively to address challenges and industry evolutions. The industry has come together to keep cargo moving in the fight against COVID-19 and it does so with a shared, common vision and unified objectives.
Glyn Hughes, Global Head of Cargo, IATA
Henk Mulder, Head Digital Cargo, IATA
Ariaen Zimmerman, Executive Director, Cargo iQ
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