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An end in sight to the paper chain?

An end in sight to the paper chain?

By Hpanchal on February 14, 2013

Data captured at source can improve tracking and tracing of cargo, increasing visibility to all parties in the supply chain and reducing the time staff take answering enquiries from customers. The less visible price of error and delay is potential loss of customers, van Pelt argues. “Airfreight is an expensive mode of transportation and, unless it demonstrates its value in reducing transit times, there is a real risk that customers and traffic will gradually defect to other modes of transport.”

KLM’s Vreeburg agrees that “some forwarders are lagging behind on e-freight, and that’s blocking deployment. But a lot of the major ones have the systems in place and are really making an effort. They may not call it e-freight, but they have pre-messaging on shipments so the destination knows what to expect. It’s a small thing to remove documents from this process.”

The Netherlands took a holistic approach via E-freight@NL, a two-year project that was awarded a €1.2 million grant by the Dutch government in 2010. KLM Cargo acted as secretary, and the project involved Air Cargo Netherlands (the industry’s representative body, bringing together airlines, agents, handlers and truckers) as well as major shippers.
The participants worked together on reconfiguring their processes to facilitate large-scale paperless import and export operations. IT companies serving the Dutch airfreight market also linked their systems and adopted uniform standards to facilitate e-freight.

Schiphol signed agreements with Incheon Airport in Seoul and Changi in Singapore, taking the view that a “big bang” approach would not work and that e-freight must be pursued at individual trade lane level.

However, van Pelt is resigned to the fact that the local situation differs markedly for airports and their home carriers. “Incheon is at a different level to where we are in Amsterdam. We’re not really aligned yet,” she says.

Lufthansa Cargo began looking at the feasibility of a paperless supply chain back in 2007, analyzing the gaps in its existing systems and the changes that would be needed to infrastructure, IT and current processes. It took five years before LC was ready to roll out the eAWB on a large scale, according to Mario Zimmermann, head of technology and innovation. By the end of last year, more than 250 customers were benefiting from e-freight.

IATA designates “lead carriers” in specific markets, a role LC holds for Germany and Japan. The carrier calculates that about 25 percent of shipments could be handled electronically on this trade lane.

“Lufthansa Cargo has set itself ambitious targets and timelines for digitizing current paper-based processes. But countries in South America, Africa and across large parts of Asia still require a paper AWB, so in 2013, we will concentrate our activities and penetration campaigns in our home market in Germany,” Zimmermann says.

There is not yet a seamless flow of information along the supply chain, which creates inefficiencies, he points out. The lack of interoperability between existing IT systems and stakeholders remains an obstacle.

“We are working closely with our customers to improve the interfaces and message quality. As soon as all stakeholders–including shippers–implement e-freight as their standard process, the full range of benefits will emerge,” Zimmermann insists. “Managing information means you’re managing the business. Pre-clearance of shipments becomes possible; and on the export side, in the best case, you save on the documented export receipt, eliminating an entire step of the process. This allows forwarders to better plan their routes, and reduces waiting times.”

Alongside fully implementation of the eAWB, Lufthansa Cargo is preparing to launch the electronic house air waybill (e-HAWB), enabling the industry to move nearer its objective of completely paperless freight transportation by 2015.
“An ePouch solution will further allow customers to upload all kind of documents accompanying the freight, such as temperature control sheets and so on, offering clients an independent platform for storing confidential documents digitally,” Zimmermann says.

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