By Brandon Fried
I was vehemently against the purchase of a new family computer. After all, our old desktop had performed so well and reliably that I simply ignored its growing obsolescence. What could not be ignored were my kids’ constant requests and pleas for a new, state-of-the-art machine capable of running modern programs and yes, all of the latest gaming.
Time is wonderful as it’s passing allows us to gradually realize different perspectives. After struggling with getting the latest software to work on my aging computer, I began to see another point of view. I realized that good software does indeed come from heaven but only when you have good hardware. So, after much reflection and a bunch of hard-earned cash, our new flat paneled beauty sits prominently at home, plying the internet like a hot knife through butter while teaching me a lesson of time’s ultimate value.
As e-commerce begins to find its place within the airfreight forwarding industry, I am reminded of my aging computer. Waiting and saving my money until the last possible moment may have seemed smart but how much of my time was wasted on inefficiency? Being unable to run current software and play the neatest games were my clues but how will forwarders know the time is right to pull the e-freight trigger?
IATA has begun a phased-in approach to e-freight that starts with e-AWB, an initiative focused on eliminating the paper airline Master Airway bill from shipments. It is a logical starting point but an easy to read roadmap is still needed for those willing to continue the journey.
Forwarders are aware that intuitively e-commerce saves money by stripping out labor costs. Airlines seem to understand the benefits for their operational needs but from a forwarding perspective, where are the models supporting this? Digitizing data is the foundation to e-freight but knowing how, when and where this will occur bring lingering questions for many in the forwarding community.
Forwarders want to know if shippers will be willing to digitize their paper shipping documents or will this task be left to their forwarding companies. If forwarders provide such a service to the customer, what are the costs and will the operational savings outweigh the expense?
When I began to look for a new home computer, my kids quickly showed me the competitive environment and what I was up against. For instance, the software guru neighbor in the big house down the street not only had the most current machine but one on each floor of his colossal house. As with the large intergalactic forwarders, he wants to be assured that his investment will support the proprietary systems he develops.
Many forwarders are medium-sized and use third party, off the shelf software to run their business. They hope that these vendors are up to speed on e-freight requirements and are working on solutions that will be easy to use and understand. They also worry about whether the savings will pay for the additional costs of development.
Finally, my neighbor Barney lives in a small house still uses a manual push lawnmower and has one computer that belongs in a museum. He reminds me of the many small forwarders who seem to survive without complex computerization, relying on typewriters and clipboards for record keeping. Is there anyone addressing their needs?
Companies called VANS or Value Added Network Services will doubtless play an important roll for all market segments in meeting the e-commerce challenge. These firms serve as intermediaries between business platforms, transforming data between formats such as EDI to XML or EDI to EDI. It would certainly be helpful to know where they are in the e-freight development process.
The IATA e-freight initiative aims to “take the paper out of air cargo” supply-chain operations and replace it with electronic messaging which is supposedly more accurate, more reliable and less expensive. As with my children convincing me for the need of a more modern and capable home computer, adoption is going to be slow but there are signs of progress. Many airlines are signing up, and a new convenient multilateral e-AWB agreement between carriers and forwarders is now available.
In 50 years, as we look back on the progress of e-commerce in air freight transportation, it will be interesting to see how long it took the industry to adopt its principals and derive the promised efficiencies and cost savings. Time will tell but not pursuing the digitalization of paper data will likely place our industry on the wrong side of history. Now is the time for all of us to roll up sleeves, stop preaching theory and start talking about real-world opportunities and solutions to make it a reality.
Brandon Fried is the executive director of the U.S. Airforwarders Association.