An end in sight to the paper chain?
The current paper-based air cargo transportation process generates around 30 documents per shipment, making for a large and weighty “pouch.” Andreas Otto, a member of Lufthansa Cargo’s executive board, told a recent media presentation that he can’t believe the airfreight industry is still producing 10,000 tons of documentation every year. He pledged to “get rid of all the useless paper by 2020.”
This surplus weight is not only bad for the planet. IATA calculates that once the whole supply chain–including shippers, forwarders, handling agents and customs authorities as well as the airlines themselves–buys into its e-freight initiative and replaces paper documents with digital files, the industry could slash its costs by almost $5 billion per year.
The trouble is that IATA’s member airlines have been unable to impose their will unilaterally on their supply chain partners, let alone convince reluctant governments of the merits of paperless trade. As of last October, shipments accompanied by electronic air waybills were running at around 90,000 per month, or a mere 5.6 percent of the total.
Announcing revised target dates of 20 percent eAWB penetration by the end of this year, 50 percent by end 2014 and 100 percent by end 2015, Tony Tyler, IATA director general and CEO, said: “We have to accept that the eAWB has been harder to drive forward than we anticipated. We have slipped by a year. It’s not satisfactory, but it is the reality in the present economic circumstances.”
A new pan-industry approach from the Global Air Cargo Advisory Group (GACAG), in the form of a “roadmap for paperless air cargo,” may finally bring the required momentum to the process. GACAG was founded in 2010 by IATA, the International Federation of Freight Forwarders Associations (FIATA), The International Air Cargo Association (TIACA), and the Global Shippers’ Forum (GSF), to ensure the air cargo industry has a strong, unified voice in its dealings with regulators. The group targeted e-commerce as a priority, along with security, customs and trade facilitation, and sustainability.
GACAG’s e-commerce task force has broken down e-freight into three key components or “pillars,” and has set goals and identified responsibilities for each part of the industry to help bring the vision to reality.
Pillar 1 involves engaging with regulators and governments worldwide to implement fully electronic customs procedures and regulations that support paperless shipments.
Pillar 2 focuses on working collaboratively within the cargo supply chain to digitize the core transportation documents passing between forwarder, handler and airline, starting with the air waybill, but also including the house manifest, flight manifest, and security declaration.
Pillar 3 will see the industry develop a plan to digitize the additional commercial documents that typically accompany airfreight, either in or outside the pouch, such as those originating with the shipper.
Bill Gottlieb, a past president of FIATA and former chair of the GACAG e-commerce task force, said at the launch of the roadmap: “The industry is now comprehensively united in our objectives and timelines for e-freight and eAWB. This sends a huge message to all industry participants and I am comfortable that this will lead to significant acceleration in adoption of e-cargo in 2013. This is a perfect example of how we can be stronger through dialogue and collaboration.”
Speaking at a media briefing at IATA headquarters in Geneva in December, Guillaume Drucy, head of cargo e-business, said feedback from the industry had pointed up a number of “road blocks” that were hindering e-freight.
Foremost is that many states have not yet ratified the 1999 Montreal Convention and/or do not permit electronic release of import and export cargo. Three major BRIC economies, Brazil, Russia and China, are thus far inaccessible.
IATA has therefore put its initial focus on eight specific high-volume airfreight markets within the 34 percent of global trade lanes that are presently open to e-customs. However, Drucy said that through continued lobbying, 80 percent of trade lanes could be opened up by 2015. This year, IATA hopes to launch pilot projects in two BRIC countries.