Chief among new year resolutions for 2017 at IATA were the removal of paper from the air cargo process and the adoption of a common digital language if the industry is to successfully exploit the potential growth from e-commerce.
Global head of cargo Glyn Hughes assesses progress so far and what else needs to be done.
eAWB penetration in 2016 was below IATA’s target. Why is that?
As we know, eFreight and eAWB (air waybills) require a significant number of factors to be in place to facilitate successful implementation. Despite the complexities, eAWB penetration moved significantly during 2016 and finished the year at 48.9 per cent penetration, which, while below the industry target
of 56 per cent, is still a great achievement. In December this translated to more than 600,000 shipments transported without a paper AWB.
Are you confident that the target for 2017 is in scope?
Targets should be challenging and the 2017 target adopted by the IATA Board of Governors is 62 per cent, which I believe is achievable if the current momentum of the second half of 2016 continues.
Where/who are the best performers?
There are too many excellent performers to highlight so I prefer to guide people to the IATA website where we publish eAWB results including top airlines, airports and freight forwarders.
We also analyse the data by region, which shows that the eAWB programme has been embraced equally by all parties through this great global industry.
What are the blockers and what can be done?
There are many factors that influence eAWB adoption, ranging from the regulatory treaty in place, technology compatibility among supply-chain partners, customs support for e-programmes, process redesign to, most important of all, the desire of the parties to affect change. To address each of these factors IATA has developed an implementation ‘playbook’ and produces case studies that seek to showcase individual success stories.
Can you reiterate what benefits eAWB and e-freight offer the digital air cargo process?
There are many, starting with accuracy of information. The forwarder originates the eAWB message, which is then used by all parties in the supply chain thereafter, whereas the paper AWB is entered into various systems by the different parties and every entry is open to error. Mistakes, of course, lead to shipment delays, so accuracy equals speed.
Additionally, eAWB messages can be used to fulfil regulatory filing submissions, compliance with which are mandatory, and more authorities around the world are demanding advance cargo information that eAWB can fulfil. Operational efficiency is again enhanced through use of technology, leading to fewer errors by the forwarder, so fewer shipment delays.
Advance clearance at destination is enhanced by electronic data. The data provided in an eAWB can also be used for shipment tracking, providing a customer benefit. A paper AWB moves with the freight; the eAWB and ePouch (collectively eFreight) move ahead of the actual freight and, therefore, prepare the way for speedier shipment clearance.
Finally, moving away from paper is the right thing to do for environmental reasons; in today’s world, where every aspect of our daily lives is increasingly being digitalised, it’s the natural progression in the workplace.
Cathay Pacific has identified 14 countries that can feasibly offer eFreight without a pouch. How many more countries will be offering that this year?
Cathay Pacific is yet again leading the way and the move to ‘no pouch’ has been a success – it paves the way for further country roll-outs. There are many countries where eFreight is feasible, so expansion is really down to market engagement and the common standards that are in place.
Does the onus lie with customs departments or forwarders (and airlines) to grow this ability?
The responsibility lies with us all. Customs need to embrace modern processes and adapt to using digitised information. Forwarders, ground handlers and carriers also need to embrace the future and move away from the historic paper practices. Technology is no longer an issue as there is plenty available. Trade associations and the media have the responsibility to promote the benefits and challenge the industry to join the eFreight evolution.
What Uber-style disruptors lie ahead for the air cargo business?
The crystal ball question! Rather than try to identify a potential disrupter we challenge the industry to disrupt itself, question legacy practices, challenge existing processes and innovate with new solutions designed around today’s – and more importantly tomorrow’s – consumer and shipper expectations. Air cargo has a proud history of agile solutions adapted to industry trends. Now is the time to return to those proud industry origins.
What is the overall outlook for 2017?
In general terms, there are several optimistic signs for 2017 following the good second half of 2016, which saw great growth for consecutive months and the year finished with global 3.8 per cent growth versus 2015. For 2017, we expect to see the continued rise in e-commerce shipments, high-value pharmaceuticals and perishables. The electronics sector and fashion accessories and apparel also seem to be strong areas fuelled by e-commerce purchases by consumers.
Which technological innovation or process will have the most impact in the coming years?
Transparency of information, greater use of data and real-time shipment information will drive industry innovation. IATA has launched a programme called ‘Simplifying the Business of Air Cargo’ (StB Cargo), which has identified numerous projects and programmes designed to support the digital air cargo process, from piece-level tracking to digital shipment records and incident reporting, and from smart facilities to real-time customer feedback and service rating. Exciting times lie ahead for this great industry, which powers the global economy by transporting 35 per cent of international trade by value. Everybody who works in air cargo can be proud of what they do, but none of us should stop trying to improve.