Industry should focus on E-freight solutions

  • June 3, 2013

At a recent major air cargo industry conference airline executives claimed that forwarders would lose business if they failed to adapt to E-freight. The E-freight initiative, which is sponsored by the International Air Transport Assocation, is a program that aims to build a paperless, end-to-end transportation process for air cargo. It involves the entire air cargo supply chain.

The electronic transmission of shipping documents is an efficient way to move them between origin and destination. Many industries, including air cargo, have benefited from the numerous ways technology improves process flows and the overall quality of the transaction. Members of the Airforwarders Association agree that leveraging electronic data interchange is not only beneficial for business but will be the continuing wave of the future.

For years, despite airlines investing little in cargo technology while spending millions on passengers, forwarders moved ahead, building solutions to enhance internal operations for themselves and their shippers. Now some of those same carriers are beating the drum and pointing the finger at forwarders for being laggards in the electronic data process.

But here is a word of caution to some of our friends in the airline community: Forwarders are not laggards. Nor are we your “agents.” We are your customers and should be treated as such. Threats and unsupported allegations have no room in this important narrative.

This is not a one-size-fits-all world. Your customers come in all shapes and sizes. What may work for a large, multi-national forwarder is not necessarily going to work with a smaller, midsized company.  As your customers, forwarders are not ignorant of the effects of technology on our globally connected supply chains. We understand the concept of productivity gains to be had through automating paper-intensive processes. Many of us have been doing it for years internally, with our agents and our shippers.

The free marketplace is a work of beauty and a joy to behold. Let’s embrace it and let it do its job. This is not an industry but a market question. All carriers are not the same and do not offer identical levels of service or access to information. This is the way it should be; let the free marketplace sort it out.

Visions are great, but if we had tried to build a smartphone in 1993, the effort would have failed. Why? The building blocks were not there at the time. Let’s work together in laying out a roadmap starting with the e-AWB that logically builds one step upon the other. Some may move down the path faster than others, but rest assured that success will quickly attract copycats.

We should also think in terms of options. For instance, the large, multi-national forwarder has more proprietary systems and the resources to build solutions in-house. The midsized forwarder is a bit more resource-constrained and is, in many cases, using a third-party software provider. Are we engaging these third parties? The smaller players are a bit of a different challenge. If an airline is willing to build web-based E-freight solutions for these companies, it may attract substantial business.

Embrace a more collaborative strategy. This starts with backing up and taking a holistic approach to the issues, namely:

  • Articulate and quantify the value proposition for each entity in the supply chain.
  • Better understand the forwarder’s challenges digitizing shipper data that is usually supplied to them by their customers in hard or soft copy.
  • Work with the forwarding community to develop a realistically phased timeline.
  • Recognize that your customers are a diverse lot and collaborate on a menu of options to include proprietary host-to-host, third party software providers in their many forms, and for those that need it, web-based manual entry options.

At the same time, continue efforts to encourage customs organizations in other countries to accept paperless document transmission routinely. There is still much work to be done in this area and a true paperless shipping environment will never be realized unless the world harmonizes its requirements.

Think about the history of this industry, which first took off after World War II. Air cargo gained traction simply through a collaborative partnership of the many diverse stakeholders and a sense that we are all in this together. By unifying and building on one another’s strengths, we compensated for the weaknesses and became mutually successful.

Finger pointing, threats and prognostications of doom will not solve this important issue. Rather, let’s focus on solutions. We will all have a lot more fun and in addition, become far more productive.

Brandon Fried is the executive director of the U.S. Airforwarders Association.

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