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IATA Cargo Day: Big trading nations not geared for e-freight

By Hpanchal on December 8, 2011

As more countries sign up to the Montreal Convention, the number of trade lanes open to electronic Customs filings will increase. But in an IATA media briefing this week, Des Vertannes, the association’s global head of cargo, warned that overnight change is not a given. Some governments that are demanding advance electronic data as part of the supply-chain security process still require paper in their own Customs procedures.

Vertannes was encouraged to note that China is showing more interest in providing electronic data as well as demanding it for inbound goods. In their first pilot, the Chinese authorities focused on Tianjin — not one of their big three airfreight hubs. They have since pulled back, but are interested in assessing the electronic experience in a neighboring state and are prepared to implement e-trading at one of China’s main gateways, he said.

India was still debating the merits of Montreal, but Vertannes said the infrastructure was not there, and there were also cultural attitudes to overcome. “If there’s one thing India loves, it’s stamping documents,” he commented.

One of the last remaining blanks on the map is Russia. It has professed an interest in accelerating e-freight, but Vertannes said Russia must modify both its supply chain and financial structures, as banks currently need to stamp a physical document before releasing payments.

Asked why more forwarders had not committed themselves to e-freight, Guillaume Drucy, IATA head of cargo e-business, said there had been a significant increase in connectivity between airlines and ground handlers over the last three or four months. Forwarders needed to see this critical mass before committing themselves. If only three or four handlers at a major hub such as Frankfurt were e-compatible, forwarders would have to operate dual systems; once that number grew to 10, they would have a greater incentive to go electronic.

Vertannes rejected suggestions that some forwarders are holding off because they see little return on the investment involved. “Costs are borne by the carriers upfront, but all will share the benefits. If the industry becomes more efficient and competitive, it will meet its end goal of gaining a bigger modal share,” he said.

Forwarders could ultimately expect to see cost reductions, Vertannes suggested. “The benefit of an improvement in any industrial process eventually filters down to the customer.”

Air Cargo World correspondent Martin Roebuck has been on the scene in Geneva,  reporting IATA's cargo moves.

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