E-freight adoption, slow but steady
Going paperless is a priority for the air cargo industry. However, the digitisation process by the air cargo community is slow and the pressure is mounting on the industry players to speed up the processes. Reji John
One important aspect of technology adoption in air cargo industry is digitising information and documentation. And the best example here is the electronic airway bill or e-AWB. The International Air Transport Association (IATA) has been on a global campaign to implement paperless shipments in the air cargo process which will improve efficiency and have a positive effect on the environment. E-freight is an IATA initiative which aims to replace paper with digital documents throughout all elements of the air cargo supply chain – including shippers, forwarders and export customs, carriers, import customs, handling agents, forwarders and consignees. Traditional paper-based air cargo involves some thirty documents for every shipment, and is estimated to create the equivalent of eighty Boeing 747 freighter-loads of paper every year. E-freight eliminates re-keying of data: reducing cost, speeding processes and enhancing accuracy. IATA wants to raise e-freight volumes and get more airlines and air cargo agents to join the IATA e-freight initiative by pushing the use of electronic airway bills instead of paper AWB. IATA is driving its airline members hard to make IATA e-AWB compulsory in an effort to raise industry efficiency. The IATA Cargo Committee has set itself the target of end 2014 for the 100 percent replacement of the paper document by electronic AWB. The electronic AWB is seen as a major step in making airfreight handling paper free along the whole supply chain. Everybody is talking about e-freight these days. The Indian government is pushing the issue of e-freight to achieve a higher level of transparency with respect to foreign trade activities. However, there is resistance from certain stakeholder of the industry. In March 2013, while addressing the Aviation Day India conference in Delhi IATA’s director general Tony Tyler appealed the industry to pull forces to modernize cargo processes. “You will recall that in 2008 we collectively said good-bye to the paper ticket. By 2015 we are trying to do the same thing for cargo with a 100 percent conversion to the e-Air Waybill – an important step in the overall e-freight vision,” said Tyler. He said that India Customs has agreed in principle to creating a paperless environment, which according to him is “encouraging”. “But progress is too slow. To be blunt we need a show of political will to kick-start the process. IATA is ready and willing to provide resources to help. And one of the goals of this visit is to secure the commitment of authorities at the highest level to support implementation of e-freight,” he added. According to IATA, there are 63 airlines with 3908 airport locations in the global e-AWB project. This represents approximately 80 percent of potential AWB market coverage. While there are 801 freight forwarders with 3665 freight forwarder offices worldwide representing approximately 52 percent of potential AWB market coverage. “This is a fantastic example of cross-border cooperation and will be of immense benefit to businesses and the economy. This clearly demonstrates that where there is a will, there is a way. I am confident that this will motivate other nations and regions as they look to accelerate the adoption of the e-AWB,” said Des Vertannes, IATA’s global head of cargo. In fact, in the recent past, there has been some concerted effort in the industry to speed up IT adoption. This is largely because the industry itself is realising how laidback it is in innovation and technology when compared with other industries. Secondly, the industry is undergoing major changes driven by external factors like market volatility, financial crisis, capacity growth in passenger markets, security and environmental regulatory restrictions. So technology becomes the natural ally for the industry to tap its full potential. In fact it is the players from Europe who are leading the e-freight initiative in the air cargo industry. Take for instance the Amsterdam Schiphol airport. The Dutch government funded a e-freight initiative by its main airport Schiphol to encourage the move towards paperless air cargo. “From 2010 to 2012, we had the e-freight@NL project where we tried to inform the market players, and pushed our local players to adopt e-freight. We also identified that within the supply chain, the biggest bottleneck was in passing the cargo from one end of the supply chain to the other. That is really where you need to establish the right interface so that everybody has the same electronic data. We terminated our project in 2012 and now it is up to the market to takeover. I am happy to see that most airlines are now proactive in stimulating other partners in the supply chain to adopt the paperless movement,” said Saskia van Pelt, cargo development director, Amsterdam Schiphol and founder member of e-Freight@NL. IATA’s target for this year is to start two pilot programmes in the BRIC countries, to increase global coverage from 33 to 45 percent, and to achieve 20 percent e-AWB use across the industry. By the end of 2015, it is hoped that e-Freight will be live in 80 percent of all world trade lanes, that the industry will achieve 100 percent paperless substitution of the three core transport documents (air waybill, house manifest and flight manifest), and that the document pouch will be eliminated for most general cargo shipments.n
