ORLANDO — “We are not technical Neanderthals,” Brandon Fried, Executive Director, Airforwarders Association reminded the panel titled, “A Shipper’s Perspective of the US Air Cargo Industry and its Impact on their Value Chain” at this yesterday’s CNS Partnership conference session.
The supply chain is still struggling to negotiate the complexity of freight forwarding, while providing the door-to-door visibility and predictability that shippers require for their supply chains. Moderator Dirk-Maarten Molenaar of Boston Consulting Group reminded the audience that the industry is still regarded, by some, as a technological backwater.
But while shippers’ expectations are rising, they understand that air cargo is inherently complex.
“The quality of supply chain is hit or miss,” Blake Bowlin, global transportation procurement manager at Caterpillar said, adding that origin-to-destination remains a challenge, especially reducing dwell time. Airport to airport is fine, he countered, “but we look at it from a door-to-door perspective.”
Craig Pettit, director international operations and compliance at Bridgestone Americas Tire Operations, also underscored that shippers needed door to door, noting that because handoffs are still complicated, “we want to eliminate them.”
“Air for us is a crisis situation,” explained Pettit. “But regardless, we need that SKU level visibility.”
But with shippers pushing for the seamlessness of an integrator, are they failing to account for the fragmentation of the sector?
Brandon Fried agreed that shippers were “entitled to as much transparency as possible,” however he cautioned against simply throwing technology at the problem until it goes away. “I’m concerned about the fact that we are investing so much when less than two percent of shipments go astray. I want to see us working towards fixing what’s slowing boxes.”
Regardless of whether the answer is technology or industry skills, the panel acknowledged that there were trends underway that would effect change, and that forwarders that failed to account for these developments would likely fail.
Shippers noted a wide discrepancy in freight quotes, but forwarders ability to set rates in an information vacuum is being threatened by tools such as Xeneta, which allows shippers to benchmark their container rates against current market prices in real time.
Another development, years in the making, but now imminent, is the Automated Commercial Environment (ACE), the primary U.S. government system through which the trade community reports imports and exports, and the government determines admissibility. Importantly, ACE incorporates a lot of paperless technology that has been slow to catch on, incentivizing stragglers to jump on the paperless wagon.
Ultimately, Fried said that success depends on the vibrancy of an ecosystem of services made up of five elements: search engines, retail websites, online market places, financial services providers, and express delivery services. These all need to provide a seamless interconnectivity – which requires robust implementation of the WTO agreement that went into force in February.