News / Etihad joins WebCargo as air cargo's digital transformation develops

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Etihad Cargo has taken another step towards digitisation, signing up to Freightos’s WebCargo platform.

The platform, part of Freightos’s Digital Air Cargo initiative, will give 1,700 logistics providers and forwarders access to Etihad capacity, and will work alongside Etihad’s own eBookings platform, which accounts for nearly 50% of its sales.

WebCargo will give Etihad Cargo instant schedules, promotional rates and bookings.

Rory Fidler, head of technology & innovation at Etihad Cargo, said: “We are pleased to kick-start 2020 with yet another digitalisation milestone. During the past 12 months we have introduced several initiatives to improve our customers’ experiences and provide the company with greater accessibility and visibility.

“Our latest API capabilities will facilitate the roll-out of our product through WebCargo over the next couple of months and they will become a key partner in strengthening our digital connection to forwarders around the world, with a special emphasis on European markets.”

Manel Galindo, WebCargo’s chief executive, said: “Digital Air Cargo is going to become an industry norm and WebCargo is proud to be leading the movement with innovative industry partners like Etihad Cargo.

“WebCargo by Freightos was the first digital air partner for airlines pioneering digitisation, and are committed to making air cargo work better to enable quick agile global trade and delivering a 21st century shipping experience.”

The roll-out will begin in Europe, starting with Spain, France and the UK.

Etihad joins airlines including Lufthansa, Air France-KLM, IAG Cargo, and United on the WebCargo platform.

In a white paper on digital air cargo, Freightos noted that ”global air and ocean freight both failed to evolve fully binding contracts, creating a commercial environment rife with uncertainty and heavily dependent on personal relationships to avoid contract defection or rolled cargo. The shift towards Digital Air Cargo presents an opportunity to adopt simple binding digital contracts, backed by financial guarantees to uphold contracts. This is absolutely critical for a low-touch digital air cargo reality”.

And, among many benefits of digitisation, it also pointed out that index-linked contracts – pioneered by Qatar Airways Cargo – could help companies locked in at the wrong price.

“With fully digitised air cargo, sufficient trade volume patterns can be analysed to determine reliable pricing benchmarks, allowing airlines, GSAs and forwarders to link prices to indices and creating long-term contracts that track the market automatically. This reduces manual and time-intensive contract negotiations to discussions over a fixed percentage in relation to indexes on select lanes.

“This is already commonplace in the bulk shipping world [with forward freight agreements]. Nor is the concept new, as airlines are already familiar with index-linking for fuel procurement.

“Once a contract is index linked, price fluctuation exposure can be effectively hedged with derivatives such as swaps and options,” it concluded.