By Karen E. Thuermer, AJOT
The statistics are astonishing. The air cargo industry fills up 39 Boeing 747 freighters each year with paper wasted on documentation, all of which costs money to produce and slows down shipping. Twenty years ago it took 6.5 days, on average, to send a shipment internationally, today it takes 6.0 days.
By utilizing paperless cargo processing, or e-freight, 38 documents that accompany air cargo shipments could be eliminated, shipping time could be reduced by 25% and $1.2 billion could be saved each year.
‘It’s time for the industry to crawl out of the technology dark ages,’ exclaims Giovanni Bisignani, director general, International Air Transport Association (IATA).
IATA is committed to freeing the airfreight supply chain of paper documents by moving to a simpler, paper free, electronic environment. The benefits are many. Shippers will see expedited movement of goods and improved quality of service. Forwarders will realize process efficiency and reduced cost of compliance; airlines will achieve process efficiency, cost reduction, and improved competitiveness for air freight; and Customs will have faster, more accurate information for security screening and clearance.
To make e-freight a success, airlines, forwarders and Customs must cooperate. Most important, worldwide governments must commit to accepting e-freight.
Moving towards cooperation, in December IATA successfully signed up five Customs administrations in Canada, Hong Kong, the United Kingdom, the Netherlands, and Singapore to participate in a pilot project to test e-freight business process standards. These countries were selected because they are at a technical state of readiness to allow them to interface with the forwarding community in a paperless environment.
Home airlines (Air Canada Cargo, Cathay Pacific Cargo, British Airways World Cargo, KLM Cargo, and Singapore Airlines Cargo) and freight forwarders operating in those markets (DHL, Schenker AG, Kuehne & Nagel, Panalpina, and ABX) will also participate in the pilot that will be up and running by year-end 2007.
‘We decided to limit the first wave of e-freight pilots to a manageable number to allow us to maintain tight control on the initial trials that would set the standard and the template for subsequent waves,’ says Aleks Popovich, Global Head of Cargo, IATA.
Kuehne + Nagel, which launched its own eFile initiative in 2005, will run an e-freight pilot lane between London and Toronto.
‘Under eFile all transport-related documents are scanned and are subsequently electronically available throughout the transportation process (also for the customer via Kuehne + Nagel’s tracking and tracing tool, KN Login), as well as for later storage,’ says Marcel Fujike, vice president, Product Management and Business Development Global Airfreight, Kuehne + Nagel Management AG.
As the largest forwarder with the broadest reaching network, DHL Global Forwarding is also fully engaged and committed to the program.
‘Our participation is on behalf of our valued customers as they are the ones that will truly benefit the most by having their goods shipped with more visibility and the value added ‘speed to market’ component that will ensure their continued successes,’ says Gary Schultheis, senior vice president, Airfreight North America, DHL Global Forwarding.
The United States is not part of IATA’s initial pilot due to its size and complexity. But Cargo Network Services, IATA’s US subsidiary, is currently approaching government and industry contacts to lay the groundwork for the United States to participate as a ‘second level’ adopter.
‘The want and need is certainly there to initiate this program, but the resources and the technicians need to be available for this to become a reality,’ says Schultheis. ‘The forwarding community needs to stop just talking about this and prepare for it, while the shippers and importers should play an active roll in the testing, ramp up and roll out of e-freight in North Am