The big supply chain disruptor is the regulators, say shippers
Shippers need their supply chain partners to collaborate in order to speed up processes and ...
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It’s time to turn our attentions. There’s been enough IATA-bashing lately (admittedly, much of it from The Loadstar). But it’s time to turn the focus back to where it should be. And where is that? The industry itself – by which I mean all the players, not just the airlines and their embattled association.
It’s very easy to criticise those who put their head above the parapet, but what of the rest? Why does it seem that only a handful, a gallant bunch, are, as Etihad’s Chris Notter likes to say “working together to increase the size of the pie”? (Compete on how to slice it, he continues.) Can you really criticise someone else’s efforts if you are not trying yourself?
What it all should be about, for everyone, is taking air freight’s share of the transport market from 2% to something better, something bigger. No one can do that alone.
Of course, one of the best ways to increase efficiencies, to make air freight a more attractive option, is through e-freight. That old stumbling block.
IATA, actually, is close to fulfilling its promise to reach 10% e-freight adoption on live trade lanes by the end of the year. It is still only 1.6%, but there is much optimism that 9 or 10% can be achieved. There are still difficulties (none of which stem from the trade associations). But the pieces are starting to fit together. As Cargolux’s Henrik Ambak said: “Customs are now our friends”. And ground handlers couldn’t be more keen. Swissport has even pledged to pass on the 20% savings it will make to its customers.
That leaves the airlines and the forwarders, and, as ever, this is where it all seems to break down.
The most shocking statement to come out of the Air Cargo Handling Conference was also from Cargolux. Yes, Cargolux, the newly controversial player, briskly stepping away from its previous incarnation as a head-down, common-sense all-cargo carrier. When Ambak was asked whether Cargolux would make e-AWBs mandatory, he replied: “We don’t think it’s helpful. We don’t want to intimidate our clients.” He pointed out that airlines don’t produce any documents, they simply carry them. So the price of neglecting e-freight is simply the fuel used in carrying paperwork. “For us, there’s not much money involved,” he said.
Elsewhere, there was much resentment from carriers that forwarders would be the only ones to gain. Forwarders, whose margins are four times that of the airlines. Forwarders, whose share of the pie never changes, because it’s always 100%. Why, say the airlines, must they make all the effort, deal with all the false information coming out of forwarders, and pay and work to make it right?
It’s a fair question – but one that is somewhat anachronistic. (Incidentally, in the carve up of responsibilities between the four members of Gacag, FIATA has been dealt the e-freight card. IATA got security, TIACA trade and shippers got sustainability). Even, surely, the overly traditional air cargo industry can see the benefits of the electronic age. You don’t reject your paperless telecoms bill simply because it was easier and cheaper for the provider. And don’t you prefer to store your contacts on your I-phone rather than in an address book? Even though it costs you more?
When it is your business at stake, when there is a chance that you can become more profitable, busier, and more efficient – even if it benefits someone else more, surely it still makes sense? Questioning e-freight is an argument that should have been had 20 years ago. Not now. The argument has been won. Now, it simply needs implementing.
IATA can’t change all this. It’s one association, and as such is there to serve, not lead. Gacag has been set up, for your convenience, purely to help the whole industry achieve more goals. But even that can’t affect change in individual companies.
It has been mooted that the relevant trade bodies name and shame those companies that are failing to act on e-freight. Rightly, this has been dismissed as a political and possibly commercial nightmare. But you should be warned that The Loadstar has no such concerns…
So the next time you ask what IATA, or Gacag, or Tiaca is really achieving, a better question might be what you and your company have done to increase efficiencies, to increase the size of the pie. They are doing their bit. What about you?
Comment on this article
Ted
September 27, 2011 at 2:08 pmSomeone, as I recall, defined what e-freight encompasses because they thought they are the ultimate authority in the matter and knew better, or whatever the reason; it wasn't any individual airline or forwarder. The documents which pose a challenge are those originating from the shipper that have little value or relevance to the carrier and only a bit more for the forwarder. If the hype was dropped altogether and instead 100% compliance for FWB transmission and whatever the airlines provide in return, free FSU and so forth were the target, it could become credible. Once achieved, additional documents could be added incrementally as electronic transmission in phase II or III. The stand-alone offering a-la Descartes for all currently specified e-freight documetns is great, except the fact that everyone using it would need to either make double entries or spend scarce funds on yet another integration piece.