60 Seconds with Steve Hill

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60 Seconds with CHAMP Cargosystems’ principle consultant for industry matters, Steve Hill

Justin Burns, ACW: Is air cargo behind in the digital race?

Hill: According to some shippers we are already falling behind in digitisation in comparison to other modes – particularly maritime. The call for action has become a routine agenda item on the event circuit – to tackle slow, low, and no adoption.

It shows air logistics is lacking in its wider capability to support more digitised data – e-booking, e-AWB, HWB, and other commercial and ancillary documents have electronic versions. We have wide support of e-Manifest and sharing of other flight related data via EDI is routine. While digitisation is an issue, ships are getting faster, cheaper, and more reliable, which fuels the growing dissatisfaction with air.

For global trade, the need for increased digitisation and what should be a simpler, more effective, visible, and reliable is perhaps part of a wider frustration. In the end, full digitisation will have to rely on a change of attitude as the industry is still modelled on paper-based processes. The future state of e-AWB and e-freight is full digitisation, yet we still treat it as the exception. We are not making it easy to digitise. Perhaps a 180 degree turn to have paper as the exception and digital the rule, may finally have the e-alignment it needs to progress.

Justin Burns, ACW: Is adoption of the e-AWB fast enough?

Hill: Unfortunately not. Industry has consistently missed targets for e-AWB and e-freight. 2016 marks a decade of digitisation, but adoption remains a problem for e-AWB – let alone e-freight.

What do we mean by adoption? The original expectation was for paper-free transport, end-to-end. To help achieve this, industry has deployed a number of measures such as agreements between forwarders, airlines and handlers to accomplish near 100% e-AWB delivery at export. Where necessary – such as for Warsaw trade lanes – paper AWBs would get printed under the IATA single process. This in itself requires agreement between all stakeholders and resulting changes in procedures, processes, and capabilities for the shift of AWB printing – let alone changes required in the supply chain to operate without a paper AWB. This takes time, effort, commitment, and sometimes investment.

Justin Burns, ACW: How can the penetration rate improve?

Hill: There is no single factor blocking progress. The ‘carrot versus stick’ approach requires not only the proactive collaboration and agreement of all stakeholders, but also positive, decisive, and tangible action to be proven to deliver its promises. Regrettably, the ‘stick’ approach has been backed by legal processes along with the modernisation of the business. Even with the increasing realisation digitising the paper-trail is not the best way forward. It is an approach that has been most obvious using today’s, or more accurately, yesterday’s platforms, procedures, and processes. We are talking about a transformation of the business to be fully digitally aligned.

Justin Burns, ACW: Is there still resistance to e-freight?

Hill: Yes, of course. While there is resistance, there is also necessity to use more traditional methods in lieu of suitable alternatives. For example, the paper AWB is used in some countries as evidence of pre-departure security screening with a wet stamp endorsement of that screening. To eliminate the necessity to print and stamp, the regulator needs to have the tools and capabilities backed by the law to support the process electronically, and have the data securely and conveniently available for use and where necessary scrutiny.

We have models of e-Screening were consignment data can be made available in advance to screeners and used as part of overall security measures – eliminating the need for the wet stamped paper AWB delivering in some respects the e-Stamp. And as we attempt to modernise and transform the business, which for some will be in conjunction with other modes While we like to think airfreight is special, in terms of global trade by volume – it is far less significant than the maritime sector.

Justin Burns, ACW: Are there are e-AWB adoption barriers?

Hill: A hurdle forwarders still have to overcome is inconsistent standards from airlines. For industry to move forward with some level of consistency and confidence, a collective agreement must set a minimum standard message. This needs to include increased levels of data quality from the source. The paper safety net will be removed and all we have left is the data. In the new world of enhanced security with the likes of PLACI schemes, if the data is not right, the consignment won’t be shipped.

Justin Burns, ACW: What is the consensus about the e-AWB?

Hill: There is universal agreement e-AWB will be necessary to ensure the effective management of their businesses. e-AWB is a key and necessary component – but is a stepping stone to complete digitisation. For e-Customs, it has improved trade facilitation and for some customs pre-dates e-freight.