transportationreport AIR FREIGHT
responsible for the overall lack of progress. Digitization’s
benefits to the customer have not been adequately articulated, he said. The industry has fallen short in providing
sufficient staff training and in convincing workers that digital conversion will make their jobs easier and more effective, rather than obsolete. Companies also need to do a better job of leveraging technology to re-engineer core
processes instead of just automating functions now being
performed manually, Hughes said.
The cause has not been helped by the insular attitudes of
the players. Many airfreight truckers and ground handlers
are still uncomfortable with digital transmissions. Airlines
have lost billions of dollars in the past 12 years and have
spent billions more on aircraft, labor, and fuel. Investing in
cargo IT systems might not seem a priority at this time.
Small and mid-sized freight forwarders have a “
what’s-in-it-for-me” attitude, contending that e-freight means more
work for them and less work for the airlines receiving the
information. The forwarders also complain about compliance costs.
Braun said the forwarders’ selfishness is indicative of a
long-running suspicion that airlines will one day sell
directly to shippers behind the forwarders’ backs. He also
disputed their poverty pleas, arguing smaller forwarders are
masters at lean-and-mean operations and profit hand-
somely on the arbitrage between what they pay for space
and what they resell it for. “Many forwarders make a lot of
money. They just don’t want to spend it,” he said. Hughes of
IATA argued forwarders’ myopia is becoming less of an
issue as they begin to recognize the value of digitizing the
information flow.
No one is under any illusions that e-freight represents
anything more than a good starting point for digital conversion. And it doesn’t capture the holy grail of end-to-end
shipment visibility demanded by many of today’s multinational shippers. For that, Zablocki said, shippers must turn
to integrated carriers like UPS, FedEx Corp., and DHL
Express that operate closed-loop physical and information
systems.
Experts said shippers expect their forwarders to achieve
parity with the integrators across all metrics, including
technology. That is an exceedingly difficult task. An international shipment passes through the hands of four or five
different vendors, all with different IT systems. By contrast,
a shipment moving via an integrator is handled by one vendor with one system. Integrators also spend billions of dollars a year to upgrade their systems to meet shippers’
increasing demands. Many in the so-called nonintegrated
segment lack the resources or the commitment to play at
that level.
There’s also a concern the industry’s current efforts are
responses to the past rather than a blueprint for the
future. In their presentation, Messrs. Sangster and
Markill of Descartes predicted the nature of information
exchange would look radically different in five to 10
years. As global commerce and security regimes expand,
more detailed shipment information will be required further up the pipeline, they said. It will no longer be
enough for regulators to capture data just from forwarders and airlines; shippers will become more embedded in the process, they said.
In addition, the information requirements from digital
consumers and retailers will put new demands on the air
supply chain, both in terms of information exchange and
the transparency of transport services, the Descartes duo
said.
The cumulative effect, they predicted, will be to “cause a
paradigm shift from messaging to synchronous communi-
cation.” In this environment, “more collaborative business
processes and technology will be required,” they said.
Air freight is and will remain highly relevant on the world
stage. IATA estimates that about $6.4 trillion of goods,
about 35 percent of global commerce’s value, moves by air.
With so much riding on the airflow, Hughes recognizes the
industry can no longer afford to watch the digital parade
race by.
“These are commodities of high commercial and social
importance,” he said. “If we continue to rely on legacy
processes and paper, then we risk getting out of step with
market and customer demands and expectations.” ;
