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Issue 4 2014 - Freight Business Journal


FullScreen View The E-Freight illusion


With all the talk about e-freight, one would think (a) at least a significant proportion of airwaybills (AWBs) and other documents were produced electronically and (b) e-freight is not only A Good Thing, but A NEW Good Thing. Neither is the case. Airlines are admitting that less than 20% of AWBs they receive are sent electronically. For IAG Group, the figure is 14% (but how they reach this figure, since they quote 15% for BA and 9% for Iberia, is beyond me); for Luſthansa, only 6%. Air France-KLM has the highest figure - 14.5% for KLM and 16.2% for Air France. Half of all AWBs received in the Netherlands are issued in electronic format. IAG claims the use of e-freight


is growing 1% every month. “We are pretty confident e-freight will account for 35% of business by the end of the year,” says Angel Cabeza Rivas, head of IT and e-cargo. AF- KLM-Martinair’s ambition is 25% for e-AWB; its agreed target is 20%. Luſthansa, too, predicts growth. “We are currently identifying


stations where we can set up enabling processes for sales, customer service and handling staff,” explains Thorsten Friedrich, head of e-freight. “We will run workshops to train staff and have a detailed look at our IT systems and that of our customers. We developed new processes to enable customers to adopt and accept e-AWB more easily. We piloted this project in Munich; Frankfurt goes live in June, to be followed by LA, Singapore, Hong Kong, Dubai, Vienna and Milan.” These carriers aren’t the only


ones apparently on the slow track to e-freight: IATA owns up to a 13.4% global penetration for e-AWBs, although Guillaume Drucy, head of cargo e-business for IATA and


executive director of Cargo 2000, points out that not all aspects of e-freight are measurable. “There are many elements of e-freight,” he says. “There are so many different documents - core documents like AWBs and other commercial documents such as invoices - and we, as an industry body, only track some of them. “The


industry is removing


paper documents one by one. It is now possible, for example, to transport goods in the EU, US and much of Asia, with no paper invoice. This only became possible around ten years ago, when customs organisations decided they no longer needed a paper invoice or packing list.” In fact, some carriers are


concentrating on e-AWBs, not all of e-freight - and Jan Vreeburg, director of logistics and industry affairs for AF-KLM, points out that the rush to embrace 100% paperless trading actually proved one of the barriers to e-freight as it is too much of a change for most companies. “The AWB itself may be electronic,” says Vreeburg, “but other documents in the forwarder’s ‘pouch’ are not. “With the current results in e-AWB we can see that, despite the fact that not all documents can be sent electronically, already more than 1% of all shipments in our network are completely paperless”. One of the problems is there are no industry standards for electronic formats for many commercial documents carried in the pouch. But forwarders have been


communicating with airlines since the 1980s, the first customs clearance system existed before that and the Internet came into widespread business


By Marcia Macleod


new. LACES, the first airport community system, launched at Heathrow in 1978; British Airways introduced Carat


- allowing


forwarders to obtain quotes, book space and send house waybills - in the late 1980s, around the time EDI took off. Why, then has it taken so long for the industry to get where it is now? Why is BA, a pioneer of the precursors of e-freight, boasting about the IAG Group’s new online booking system? “We think this will be market


leading,” says David Shepherd, head of commercial. “We want to engage more with portals (eg GF- X) and we’re prepared to develop host-to-host connections with larger customers if they wish.” But Carat did the same thing; the only difference is the Carat soſtware sat on the forwarders’ computer system, whereas today everyone uses the Internet. There are several reasons why


progress has been so slow - and not all are the industry’s fault. Some countries - Russia, Brazil, India and China, for example - still insist on paper documents. The complexity and fragmentation of the industry, with so many players in one supply chain, have made it hard to develop new business processes. As Friedrich points out, change management is important. And the recession has taken its toll, as there simply has not been the funding available for new projects, especially when outdated legacy systems have to be replaced first. The lack of industry standards


use 15


or 20 years ago. Whatever the hype, paperless trading is not


has also been a barrier. The belief that the switch from standards- based EDI to the internet


eliminated the need for standards has proved far from the truth. “We need harmonisation (for different documents and processes),” says Cabenza Rivas. “And we need forwarders to trust and use them.” Things are being done to


facilitate the move to e-freight. The ‘single process’ makes it easy for forwarders as they can send all documents to the carrier electronically: if a paper document is required, say for customs, the carrier will print it out.


IATA is continuing discussion


with countries still wedded to paper, convincing authorities in Delhi, Beijing, Shanghai and Guangzhou to go electronic. It has also helped bring the cost down for forwarders by switching from the proprietary Cargo Imp standards to open, neutral XML. “The Cargo Imp manual cost thousands of dollars and required expertise - now in short supply - to implement it.” explains Drucy. “XML manuals are a fraction of the cost.” Security and other regulatory


requirements are driving e-freight, as government bodies want data so fast, it can only be


sent


///IT Trouble in the mail


TIACA has called for a global standard for advanced data for mail parcels. Mail is subject to the same security regulations as other cargo, but because so many mail parcels are sent consumer-to-consumer, rather than business-to-business, it is impossible to apply known shipper status or


to obtain


some of the data necessary for security clearance. “Mail has similar processes different


to cargo, but sub-


sets,” says Douglas Brittin, secretary general of TIACA. “The data is held in a different format to ordinary cargo. The forwarder will know where post is coming from and where it is going to at a higher level, but will not necessarily have details of the shipper. There is also no harmonised customs code for mail.” Bitiin said that incidents


in October 2010 led security authorities to require greater care when handling mail. He added: “Customs and the CAA in the US, Canada and the EU are now working on specific data elements to provide the security data which could


prevent this happening again. “The advanced information


should enable authorities at destination to identify anything unusual or suspicious, advise


so the forwarder


they can and


airline they want further security screening before the consignment is shipped. They can also apply intelligence against the shipper analysis - name, address, destination, weight of item (for example,. does it feel like a book?) and so on. “The problem is that if no standards,


there are


different authorities in different countries will want data in different formats and possibly apply different codes, requiring forwarders to have different systems for different countries. “Mail volumes are growing


with the e-commerce boom which means a high percentage of shipments could be designated for additional security screening and we must have data submission regulations and screening protocols that are workable.”


All for one and one for all


electronically. More


soſtware companies are entering the sector, which widens the choice for SMEs - which are increasingly viewing technology as a differentiator. It’s all good stuff. And maybe,


maybe, the airfreight industry will finally get its electronic act together. But there is still one more hurdle to go: how do you convince the truckers to join in?


The truck stops here


A European truck parking application has proved so popular that its developer, PTV Group, is adding extra facilities less than six months aſter it was launched. In addition to providing location


and details of truck parking facilities along motorways, the soſtware now also allows drivers to view the next possible parking lot with free places; driving time to


the lot is also provided. “There is still a lack of truck stops


appropriate along


motorways,” said a spokesman for PTV. “Regulations on driving times and rest periods do not give much leeway for finding an appropriate stopping place. Truck Parking Europe lists over 10,000 parking options.” Drivers can see at a glance what


facilities are provided at the stops – such as showers, accommodation, restaurants or wi-fi - as well as information on security features and vehicle services, including petrol, truck wash and repair. In addition to official truck stops, Truck Parking Europe provides information on commercial vehicle parking spaces off the main roads.


application


The free downloadable displays


potential


parking places on a digital map. Registered users can post a comment or add information - and many have reviewed truck stops on the application. Drivers who arrive at a truck stop and find it full can post an update immediately,


warning other drivers to try somewhere else.


Dunkirk has become the last of France’s major ports to adopt the AP+ cargo community system. AP+ replaced GEMINI last year, ensuring that Dunkirk, Le Havre and Marseilles all use the same technology. Other French ports also relying on AP+ include Fort- de-France, Bordeaux, Rouen, Nantes Saint-Nazaire, Pointe-À- Pitre, and Cayenne. The all-for-one approach from that in many


varies


countries, where ports view their system as a competitive advantage. In the


UK, for


example, Felixstowe and Southampton would


dream of using the same port community system. Dover relies on yet another system. “We merged our system Marseille and


at Le not


because they didn’t want to have different processes for different ports.” The new system uses more


modern technology to make it easier to integrate with private systems (those run by carriers


and forwarders),


provides improved tracking and tracing, with all information on one screen, and offers better functionality. For example, once a user inputs data for an export booking, all other actions - like confirmation or generation of documents - take place automatically. With Gemini, data had to be keyed in for every application. “AP+ is reactive, too,” says


Havre


ten years ago to create AP+,” explains Christophe Reynauld, innovation manager at MGI, suppliers of the technology. “Shipping lines and large forwarders put Dunkirk under pressure to use the same system


Reynauld. “Whenever an event occurs, a message is sent immediately to the relevant parties.” The system is used by


shipping lines, barge operators, forwarders, customs, warehouse operators, port


security and


other key players in the port, including the port authority.


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