E-freight slow to catch on
With the exception of a few key carriers and airports, progress toward total e-freight implementation is slow.
At IATA’s World Cargo Symposium, speakers reviewed where e-freight is heading and tried to assess why take-up has not been higher so far.
Sue Presti, senior director for government affairs at TIACA, said that a survey conducted in collaboration with FIATA late last year showed 50 percent of forwarders were aware of e-freight, but fewer than 20 percent were doing anything about it.These non-adopters said e-freight was too complex, too broad or too big a challenge for smaller companies. Other respondents were concerned about data sharing and confidentiality or thought the costs would be too high relative to the benefits they could expect.
E-freight has not progressed as far as expected and “new arguments” were needed to encourage more forwarders and shippers to participate, said Felix Keck, managing director of e-freight solutions provider Traxon Europe. It was in shippers’ best interest to optimize value all the way along the supply chain, but shippers claimed they were finding it difficult to align themselves with differing Customs and IT requirements.
SkyTeam members Korean Air Lines and KLM had blazed the e-freight trail for the alliance, said Neel Shah, head of cargo at Delta Airlines. Korean had partnered with Samsung and LG Electronics, which were already operating a paperless environment, to help ramp up its own pioneering efforts. KLM was set to implement electronic air waybills from April, starting with exports from Amsterdam.
Delta, which Shah admitted had no resource dedicated to e-freight or Cargo 2000 as recently as 18 months ago, now had the equivalent of five full-time staff working on these projects. The carrier had adopted e-freight domestically and began migrating it to international services at the end of February.
Czech Airlines had made its first e-freight shipments in December, and Shah estimated that SkyTeam carriers were now responsible for more than 20 percent of e-freight shipments worldwide.
Niranjan Navaratnarajah, who heads up e-freight for Emirates SkyCargo, said people had been running round the carrier’s warehouses clutching paper documents even though they had handheld devices. “When we asked them why, they said they had always done it,” he said.
So Emirates’ own staff as well as forwarders had been e-freight sceptics, but Navaratnarajah said the carrier had been able to show smaller forwarders added value by fast-tracking those presenting electronic documents. They had later cutoffs, went to the front of the lane and could achieve faster deliveries, he said. Emirates is now aiming to load its first full freighter with e-freight.
Daniel Ng, deputy divisional head for the aviation industry at the Civil Aviation Authority of Singapore, said CAAS was driving e-freight implementation there. Even those companies that claimed they had embraced e-freight still preferred to scan paper documents rather than use EDI; Ng said government incentives may be needed to encourage the industry to buy in.
Alan Wright, head of global cargo network development at Swissport International, said ground handlers faced “the consequences of collective disarray” in the industry. The harsh reality was that in terms of international traffic, e-freight accounted for only 0.3 percent of shipments or 13,000 shipments a month, not the often quoted figure of 1 percent, which included domestic movements.
The potential back-office benefits were clear. Wright said that in a previous forwarding role, he was familiar with ratios of one member of office staff to 10 or 12 people in the warehouse. In handling, the ratio was nearer 1:1.
“We want it to work. We need one air waybill, on time and accurate,” Wright said. “The first owner of the document, electronic or paper, must get it right first time. We only receive a waybill for 50 percent of the shipments we handle, and we don’t even know if it’s accurate. The consolidation doesn’t tell me anything about what’s in the shipment, nor does the master air bill. It’s got to be at the house level.”