News / 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 provide visibility, according to head of logistics at Early Health Group, Yulia Celetaria. 

On the sidelines of Aviation connect in Istanbul last week, Ms Celetaria told The Loadstar: “I have a clinical trial that needs to be delivered from Switzerland to some remote area in Argentina, and sometimes we use five to six service providers. 

“We work with a freight forwarder, and then the freight forwarder can outsource some other freight forwarder in another region, for example. They work with airlines, they work with warehouses if they don’t have their own, and so on and so forth.” 

Ms Celetaria said it was a challenge to ensure “every single party within the supply chain is following the same standards”.  

“I see a lot of confusion sometimes when you have so many parties,” she said. 

This disconnect is partly attributable to the multitude of service providers that use different IT systems. 

“A lot of times, these IT systems are not co-integrated. I’m getting recent pieces of information from data loggers in regard to temperature, then from airline tracking on where my product is, and so on. It’s very fragmented and I have to get all the pieces together myself.” 

She noted that this is partially due to investment, “because digitalisation costs money”, but also due to a lack of willingness to standardize. 

“Everyone in the industry is speaking about standardisation, but at the end of the day, every company has their own way, and they know better… there’s only that level of collaboration that can actually happen. You can openly talk to another companies, but everybody’s in their little bubbles, I think.” 

Brendan Sullivan, head of cargo at IATA, said: “There is still very limited end-to-end visibility across the supply chain, and end-to-end visibility is about collaboration – actually sharing the data across the supply chain, having enough trust in the partners to do so.” 

He added that “technology is not the holdup anymore”, but instead it was “ireally and truly about trust and collaboration”.

Mr Sullivan also highlighted that another area of “struggle” was around “regulatory differences”.  He said: “The regulators, obviously that’s their job, to come up with new regulations, but when they do it in isolation, without consultation with industry in pockets or regions, we end up with an impossible-to-comply scenario,” he said. 

“As we saw in the case of a recent regulatory change, it was completely fragmented. It was done in isolation where they looked at an integrated business model and said, ‘well, that’s the data that we want, therefore we’ll implement the rule’.”  

One such rule is the US Customs Border Protection’s Air Cargo Advanced Screening requirements (ACAS), introduced in 2018 but enhanced in August this year, requiring the submission of information on shipments arriving in the US from abroad. 

Kester Meijer, director of operational integrity, compliance and safety at KLM, said: “The present ACAS filing has seven data points. How many have they added for the enhanced ACAS filing? 20, minimum 11? Well, actually 13, but two are covered by European privacy laws, so we cannot give them.  

“That is your biomedical information, your passport, your identifier, the IP address that you booked your shipment from. We are not allowed by EU law to give that, but that’s what they require. And then they say ‘the last items, up to 20, they’re not mandatory, but if you want your cargo cleared pretty fast, it’s better that you give them to us’.” 

“Can we be better? Yes,” he added. “The past eight weeks I have been in calls with over 140 freight forwarders and CBP, trying to explain what they require.  

“The big freight forwarders have their shit together. But there was somebody in the call who said, ‘wait a minute, I still do paper air waybills. How is the airline going to solve my problem? Because you need to do risk assessment on my data, my relationship with the shipper’.  

“I said ‘hang on, I’m the airline, it’s your data, it’s your relationship with the shipper and CBP is going to tell me I cannot fly your cargo…’ So the big disruptor is not ourselves,  it is the regulators…”  

Mr Sullivan concluded: “For this industry to be successful, we must try and make sure that we actually engage with regulators early, so that they understand the reality of our business before they go and put something in place.”