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Relations between FIATA and IATA could become increasingly tense following FIATA’s decision, according to IATA, to “mobilise the industry through collective action against particular carriers”.
FIATA last week encouraged its members to take part in a survey designed to nip in the bud air cargo carriers’ efforts to introduce a paper air waybill surcharge.
The move was picked up by BIFA, the UK freight forwarding association, which asked its members “to join in the stand against the introduction of this surcharge”.
Speaking to The Loadstar, BIFA director general Robert Keen said he thought it would be more useful to provide forwarders with an incentive to take up e-freight, rather than the “stick approach”.
“It would be better to give forwarders that sign up a discount, rather than [impose] a surcharge for failing to do so.”
He noted that in some countries it was still impossible to issue e-AWBs.
“The forwarder is often painted as the luddite, but what you don’t hear about is the disarray on the other side of the fence. Many countries still want reams of paper and there can be differing versions of methods of communication. Forwarders need a common standard, not multiple differing ones.”
It is as yet unclear which airlines are considering the surcharge, although it is likely to be those that have so far fully embraced e-freight. According to IATA’s latest figures, Cathay Pacific, Emirates and Singapore are the top three carriers, but there is no information on surcharges for paper as yet.
Lufthansa Cargo charges “€1 per HAWB for every electronic data transmission” and “€12 per HAWB for manual disposal with hardcopies”. It also applies charges for “minimum shipments not booked or bookable through eChannels”.
While IATA and its member airlines are trying to get stakeholders across the supply chain to convert to e-freight, with a target of 22% penetration by the end of this year, the initiative to charge for paper air waybills has upset forwarders.
“Forwarders want to be transparent to the customer,” explained Mr Keen. “Surcharges of any sort make the customer feel uneasy and the forwarder is first in the firing line – it looks as if they are trying to make money for themselves.”
He added that surcharges often appeared to be revenue-raising opportunities.
“Through our international body, FIATA, BIFA will be voicing our objection to carriers that seek to apply yet another surcharge, and create yet another revenue stream, under the guise of supporting IATA’s e-freight initiative.”
IATA said it was not allowed to comment on individual surcharges, but a spokesman said: “As to the e-Freight and e-AWB industry-led projects, they are proven to add value to the air freight industry through reducing costs, improving efficiency, increasing speed and driving up reliability. These benefits have been acknowledged by FIATA, and indeed by BIFA in its own statement, and we are pleased to report that penetration has risen steadily throughout the year and currently stands at 17.5%.”
Mr Keen, however, added that: “We believe that implementation should create value for forwarders and airlines alike, and airlines need to recognise the costs that the originator of the information incurs to enter and transmit data.”
And he noted that surcharges should be a temporary charge relating to one-off costs, but that they tended to remain in place.
“Surcharges should be applied when inevitable and then withdrawn as quickly as possible. For example a global fuel price spike may be a legitimate surcharge, but scrap it immediately the price stabilises.”
In July, 59 freight forwarders signed the multilateral e-AWB agreement, taking the total up to 1,006 – or about 58% of the potential market – it has now risen to 1,338 forwarders. Five airlines joined in the same month, taking e-AWB capable carriers up to approximately 84% of the total. IATA has a target of 45% e-AWB penetration by the end of 2015.
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Comment on this article
Dave AmbridgeSeptember 08, 2014 at 3:21 pm
Please be aware of the SINGLE PROCESS. This was implemented so that Agents only had 1 process, PAPERLESS. If an AWB is required the Airline, through the GHA, will print and provide it. COAG, with IATA, came up with this initiative to remove this roadblock.
Yes i agree that discounts should be offered as an incentive to E-AWB but conversely if Agents refuse to change then a surcharge to handle paper makes perfect sense. It costs us money to handle paper but nothing to handle and pass electronic data. let’s all get behind E-AWB and drive this forward quicker.
BobSeptember 09, 2014 at 4:34 am
The forwarding industry needs to step up and show the airlines that it can and is willing to adopt electronic trading practices. A majority of the players in the forwarding industry (and some airlines)are being lethargic about e-AWB adoption. Yes, on some trade lanes e-AWB cannot be implemented currently due to regulatory hurdles. However, both airlines as well as forwarders should push for complete e-AWB adoption on trade-lanes where it can be used. This will also be an eye-opener for other countries / regulators that have been slow with the uptake. Otherwise we will just be pushing the goal-post further and further and still be using paper AWB’s 50 years from now. So I would whole heartedly support any initiative that is meant to disincentivise the paper AWB.
Andy RobinsSeptember 09, 2014 at 2:37 am
I can understand a reduction on HAWB fees if the agent is submitting the data electronically. This saving the airline the burden and time and the agent is duly compensated for that.
For countries who require the information prior to sending this makes sense, (no need to clog up the export sheds of the carriers).
To impose fines to countries where there is no pre manifest requirement, appears to be on the “going green” agenda, which has it’s moments, good or bad.
As the mass majority of cargo (not sure of the stats) is in the belly of passenger aircraft, we are talking about the cargo document pouch that accompanies the cargo.
I do agree the way forward is on the E-AWB, as this will be the first step towards other documents being accepted electronically.
But if it is a green issue, the cargo document pouch from my days is about a couple of kilos. Compared to perhaps around 100 kilos or more of newspapers and magazines supplied upstairs to the passengers. How hard is it to have those digitized on the passengers screens.
John DeBenedetteSeptember 09, 2014 at 5:00 am
The distinction between an incentive vs a penalty scheme to motivate an industry’s core processes to change from manual to electronic comes down to timing. At first what seems like a penalty, becomes an incentive as critical mass develops, and ultimately doing business electronically becomes an advantage we can’t imagine living without.
The good news for freight forwarders is that E-AWB can be easy and many solutions to participate are readily available.
Our platform, WIN (winwebconnect.com), provides a one stop solution for instant connectivity to 85 Airlines including e-AWB so as a forwarder, there’s really no good reason to be in the position to absorb these new fees or pass them on to shippers. The same can be said for the per HAWB charges mentioned in the article with most airlines having policies similar to LH.
The benefits of participation by forwarders are often overlooked and understated, for example instead of operational processes becoming fragmentation from using dozens of individual carrier websites to avoid fees and surcharges, a multi-carrier platform consolidates this down to one. Plus the forwarder has the option to simply connect their existing AWB print solution via modern web-service APIs (rather than costly and cryptic legacy EDI) to avoid double data entry. Of course real-time AWB tracking is included so customer service staff don’t have to waste time tracking shipments, as are data (vs. email only) pre-alerts to the destination with secure document transfer so independent forwarders working as partner agents both benefit from the participation by the origin forwarder.
It is therefore logical to interpret these bold but inevitable moves by airlines as a needed catalyst to rapidly accelerate participation and I predict that history will look back kindly on this hopefully short middle stage of transformation.
Dave AmbridgeSeptember 09, 2014 at 2:21 pm
I agree 100% and anyone who says they can’t do E-AWB really just doesn’t understand the huge benefits they can gain from adoption. You know full well my stance on this and i grow more frustrated each time someone says they CAN’T. What they really mean is they don’t want to.
As a GHA we have offered discounts to any Agent submitting FWB/FHL to us prior to delivering the Cargo. We have not had 1 single Agent do this in over 4 years!
I wonder why?