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THE IT SEcTION

FULL SCREEN VIEW - by Marcia MacLeod

Information is the name of the game in the freight industry of today

When the integrators introduced track and trace a technological lifetime ago, it was hailed as miraculous. No more sitting and wondering if your cargo was shipped as booked, on time; if it had arrived at destination; if there were any delays. Despite teething problems - not least the lack of universal bar code scanning, which underpinned track and trace - this technology has not only continued to transform the freight industry, but has been transformed itself. No track and trace means no supply chain visibility; no visibility means no just-in-time, make-to- order, lean supply chains or any of the other processes introduced to try to increase efficiency and cut costs. The need for greater visibility

has a huge impact on freight service suppliers and their IT systems. Shippers rely on their forwarders and carriers to come up with the data necessary for their very existence - and, as they increasingly concentrate on what they see as their core business, they are also outsourcing more and more tasks, such as purchase orders, which previously they would have guarded with their lives. Impatex, BoxTop Technologies,

Kewill and SCS are just a few of the IT companies asked to provide purchase order management software for forwarders. “The forwarder is positioning itself as the shipping department of its customers,” says Peter Day, MD of Impatex, “With the web, people can access the system anywhere at any time. By adding PO management, all parties in

the supply chain can obtain status updates and other information.” This levels the playing field between smaller forwarders and bigger corporations. “Forwarders need software

that allows open access to data - but also lets them add their own updates,” says Christopher Hewlett, MD at BoxTop. “Capturing data is not that easy; there is a shift to web portals to allow the right information to be seen long before the goods become a shipment. This way f o rwa r d e r s and shippers can identify p r o b l e m s before they occur. The shipper can then make a decision whether to send part of the order by air, source more stock elsewhere, or transfer stock from another location. The need for early visibility becomes even more important when shelf-ready goods are involved, as no stock literally means empty shelves. We’ve spent 18 months working on software to support this sort of visibility.” Purchase order management

is supported by tracking at sku level, rather than pallets or containers. (A ‘sku’ is a stock control unit). “Our software manages orders at sku level from the time they’re collected to the time they’re delivered, to help give people a holistic view,” explains Tom Clayton, MD at SCS.

“We know which skus go into

which pallet or container and on which vessel or aircraft.”

Sku-level track and trace allows shippers and their forwarders to, for example, identify potential delays so they can make alternative arrangements, such as sending an emergency shipment by air. But some question whether this data goes far enough. “The global supply chain

“Capturing data is not that easy” - Christopher Hewlett, BoxTop

is optimised at each end, but not end-to-end,” claims Hakan Nilsson, CIO at Geodis. “People work with local databases because it’s too expensive to access global ones. The technology is there: it’s a matter of changing people’s mindsets.” The ever-

increasing need for data has also

changed the way shippers choose service suppliers. Companies are more likely to share data if they have a good relationship and are more able to share data if their IT systems are compatible in some way. This could mean full integration or simply agreement on the terminology and standards used: true collaboration involves more than accessing a web site with a user name and password. Once two companies have invested the time and money to set up the right systems and work out what information to share, and how, shippers are not going to be in a hurry to move their business. “Forwarders are trying to

become more flexible and to provide a personalised service for their customers,” says Ritu Rooney, global product manager, freight forwarding for Kewill.

“But at the same time, they are trying to standardise (to make integration and communication easier). The credit crisis, although reducing investment in IT, is also making people look at the shortfalls in their systems. They need to be able to integrate with other systems that will bring them more information and will allow them to share information. Smaller forwarders don’t need the same level of sophistication, but still want to be able to offer the right service to their customers.”

Which way now the for portals?

This constant demand for data could prove a bonus for portals, but, surprisingly, in some cases it is having the opposite effect. The airlines’ forwarder customers, in particular, are increasingly choosing to access the carrier’s own web sites because the airlines have more and richer data available. “When we started offering

online bookings through the portals, 24% came over the web,” comments Rupert Lees, process consultant at Lufthansa’s E Services. “Now it’s 41%, but we want to see 50% of our bookings online by 2011.” He says that now only 12% come via portals and about 29% of the company’s bookings come through E Services, “and this will increase when we develop an acceptable electronic AWB.” American Airlines’ new version

of AA.com, due for release next year, will make it easier to use

and provide more functions, but the carrier already sees at least 75% of bookings coming through AA.com. MD of internet strategy, Sarah Wagner, adds: “We are introducing technology that will differentiate ourselves from other carriers and from portals, such as paying invoices online and track and trace at piece level.” Portals do still have

benefits, however, especially for forwarders looking for spot rates. And portals are expanding their functionality into things like track and trace and providing links to customs. In any case, the situation is slightly different for ocean freight, possibly because both GT-Nexus and Inttra, the two main ocean portals, were founded by shipping lines. Both claim business is growing, although in the case of GT- Nexus, the growth is coming from shippers, not forwarders or carriers. (GT-Nexus now markets itself as a multimodal forwarder.) “We find large shippers

and the bigger 3PLs who need greater visibility are coming to us,” says Greg Kefer, director cargo marketing at GT-Nexus. “It is impossible to bring all the partners of an international supply chain into one platform without the web - and portals have the advantage because we provide the standards necessary for the transfer of data. If companies try to do this themselves, they all end up speaking different languages.” Inttra is expanding its

reach into the NVOC market, handling booking and shipping

instructions and managing consolidations. “Carriers want a more interactive approach,” emphasises Jeff Pattison, CIO. “We are trying to provide schedules, vessel and arrival information in real time, not easy when schedules can change so frequently.” “However,” Pattison admits: “Portals cannot provide as much robust data as a carrier’s own web site, either because the data is not available externally or because the carrier worries that if it gives this information to the portal, its own web site loses value. We have to talk to the carrier to resolve this as shippers want a consolidated view of the data; they don’t want to have to go to lots of different sites.” Maybe so. But where do forwarders fit in? They are not only customers of portals and carrier web sites, but they have to ensure their own web site provides the right information for their shipper customers, and for that they need to collaborate with carriers to ensure accurate, up-to-date, ‘clean’ data is available at all times. No wonder companies like Toll Global Forwarding, Geodis and Kuehne & Nagel invest so much time and money in their IT systems. As Kuehne & Nagel’s IT

director, Dave Clarke, points out, “IT is all about planning; it needs to reflect your market place, at the same time creating slicker, faster processes. We also need to encourage collaboration to tie our customers in with us. If we can provide that end-to-end visibility, there is no need for them to go anywhere else.”

Lufthansa Cargo celebrates RFID tagging success

Lufthansa Cargo has installed what it claims is the largest application of ‘passive’ RFID (Radio Frequency Identification) tags in the air cargo industry at its Frankfurt cargo centre. The airline is using the Mojix Star passive real time location system to locate single cargo shipments, pallets and containers in real time and keep better control of its operation. Following successful completion of the pilot,

the system is being more fully deployed. The technology has the advantage that the

passive tags used do not have a power source and hence are thin, light and very cheap, costing no more than a couple of cents. But unlike previous systems using such tags, the system can pinpoint tagged freight over a very wide area rather than only when they pass through pre- defined portals or gateways.

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