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THE IT SEcTION FULL SCREEN VIEW - by Marcia MacLeod


E-freight lumbers down the runway


Everything is being done to make e-freight easy to use. Traxon launched an eCargo Pouch, a central document and message management system, to enable users to keep necessary electronic documents together. It has also held a series of forums for forwarders and handlers to explain how e-freight works and demonstrate its e-freight products. Emirates now has 16 electronic documents available and is due to launch four more - the transfer document, transit declaration, import goods declaration and customs release - before the end of the year. The volume of e- freight cargo carried topped the 1m kilo mark in July. In October, Lufthansa became


the first carrier in India to introduce e-freight for outbound shipments. “By 2015, we want to implement e-freight as a standard process,” emphasised the German flag carrier’s head of technical development, Markus Witte.


But forwarders are less than impressed. “In an ideal world, e- freight is something everybody wants,” said John O’Connell, trade service director at British International Freight Association. “But someone, somewhere in the supply chain will ask for a piece of paper - and if the forwarder can’t supply it, the cargo comes to a halt.” Some parts of the world are more advanced than others, but forwarders don’t want a partial system. “If it works, it has to work globally - and so far, less than 1% of shipments are processed electronically.” BA World Cargo’s senior VP


Europe and the Americas David Shepherd, points out: “We’re 15 years behind the passenger market. Unless we move forward, we’re never going to reach a paperless environment.” But, says O’Connell, “e-Freight


is based on the success of e- ticketing for passengers, but cargo isn’t a person: it’s an inanimate


object that can’t talk or walk. And besides, IATA may claim it removes paper from passenger travel, but most passengers print out their tickets and carry it with them on their travels.” Although IATA points to 29


airlines and 1,105 forwarders using e-freight, it doesn’t say how many use it all the time, or for all documents. Most people admit the speed of adoption is slower than IATA would like. “It will be a long journey to reach paperless transport,” Felix Keck, Traxon’s MD, admitted. “The perception is that we will suddenly go from paper documents to paper-free, but things don’t work like that. You have to change the processes used by airlines, forwarders, shippers and customs. If you have to use two processes - one electronic and one paper - you’ll never get anywhere.” While airlines like Lufthansa and Emirates have visited


IATA is pushing it, airfreight community systems are accommodating it, and airlines love it. Why, then, asks Marcia MacLeod, is e-freight so slow to take off?


individual branches of forwarder customers in an attempt to convince them of the benefits of e-freight - speed and cost savings - they admit there are problems. “Some areas of the world are a bureaucratic nightmare to deal with,” said Witte. “Even if the government backs e-freight, a lot of the local customs and other official offices don’t. Forwarders aren’t doing enough to get shippers on board, either. We want tripartite talks with IATA, airlines and forwarders to get the message across.” But Emirates’ senior VP cargo-revenue optimisation, Pradeep Kumar, insists: “We are beginning to reach forwarders. We must move to e-freight. A consignment carries up to 30 associated documents, which is costly and cumbersome. A day can be saved per shipment by switching to electronic documentation. And while many bigger forwarders already


produce these electronically, many of the smaller agents do not have the right technology in place to do so.” The problem is that too many


people in the industry have heard it all before. People were talking about paperless trading 20 years ago, first with EDI and then the web. IATA says it has eliminated 12 documents altogether and developed standards for another eight. Wasn’t EDI dropped because it required standard documents? (Though even today, a lot of companies still use EDI such as the UN Edifact standards over the web.)People didn’t like it because they had to create standards, and keep to them, and to standard documents. Over the years, money has been


spent, systems installed - and in many cases, processes never changed at all and the promised savings never materialised. Why will it be any different this time? l Amsterdam Airport Schiphol


Is the future of supply chain up in the clouds?


Cloud computing will become increasingly important to suppliers, says Steve Keifer vice president of industry and product marketing at business-to- business e-commerce specialist, GXS. Large corporations like car makers and retailers are making increasingly complex and disparate demands on their suppliers, and in turn on the logistics industry, he says. A GXS-sponsored study of


819 supply chain executives around the world - published on 30 September by the supply chain management institute and SCM World - found that


over 86% expect complex requests from customers, such as vendor-managed inventory (VMI), cross-docking and floor- ready merchandise, to increase through to 2013. The research, one of the


largest studies ever completed on B2B e-commerce, was led by Martin Christopher, member of the supervisory board at SCM World and emeritus professor of Marketing and Logistics at Cranfield School of Management, who said: “The pendulum of power in the supply chain is swinging away from suppliers and towards the


customers. These large buyers are demanding more complex and customised support services from their community of suppliers, many of whom are facing growing commoditisation at the same time. As a result, supply chain executives around the globe are acknowledging that process flexibility and customer service are just as important for differentiation as delivering superior products.” Steve Keifer predicts:


“Companies that can master those complexities will have market leadership, allowing them to service, say, Toyota differently


Imtech sings the logical song


A new warehouse and transport management system is now available in the UK after Imtech, a Dutch company, saw its LBase software taken up in Europe by 3PLs such as Swiss Post, Panalpina, DHL and Logwin. “The key advantage of our software is its logic interpreter, which is a flexible tool to tailor the package for each user,” says


UK country manager Rob Gibney. “It also offers multilingual and multi-currency capability. And we can provide in-cab communication for drivers, integrated to the depot’s back office system.” LBase controls the flow of consignments through the transport chain, suggests routes and produces the necessary documentation. It can also be used


for invoicing and will calculate insurance cost, if applicable, and assign it to the correct party, whether that is consignee, consignor or transport company. LBase was developed by Austrian company Transflow, which was acquired by Imtech in 2008. Transflow will become Imtech ICT Logistics Software on 1 January 2011.


from VW, or Peugeot.” And one of the best ways of dealing with that complexity is cloud computing. Cloud computing can be


likened to a big switch capable of allowing a whole community of users to exchange information between each other, overcoming system and software differences, and even linguistic and time differences too. Interestingly, says Steve Keifer, the freight community systems set up in places such as Felixstowe and Heathrow airport anticipated this approach a couple of


decades ago, although in those days of course there was nothing like cloud computing and compatibility depended on having proprietary software and systems installed at every user. Since then, many other electronic communities have developed, for example suppliers to the automotive industry. Some interesting ‘cloud communities’ are developing in other parts of the freight industry too, Keifer adds. “For example, we at GXS have done a lot of work with customs


Steve Keifer


agencies in places like south-east Asia and India.” This is a very new concept in this part of the world, but it has allowed a degree of technological leapfrogging to take place.


and Singapore’s Changi Airport signed a memorandum of understanding (MOU) on e- freight at the International Air Cargo Forum in Amsterdam in early November. Both airports promised to facilitate and promote to their local supply chain the use and further development of paperless air cargo transport, agreed to exchange e-freight knowledge and explore the possibilities of joint research. Enno Osinga, vice president


cargo of Amsterdam Airport Schiphol said: “Paperless working creates many benefits for all parties handling cargo but we will not be able do this alone. We need our local partners in the supply chain, and we need other airports to be able to create paperless trade lanes.” The E-freight@NL project was


earlier awarded a €1.2 million grant by the Dutch Ministry of Economic Affairs.


ISSUE 4 2010


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