The air cargo industry has been slow to adopt digitalization, but as service providers and shippers increasingly conduct their business via online tools, the need to modernize and catch up with e-commerce needs and data-sharing requirements is receiving greater attention.
The International Air Transport Association (IATA) even labeled digitalization of the air cargo supply chain as a priority at its world cargo summit under way in Dallas this week, with Glyn Hughes, IATA’s global head of cargo, lamenting the painfully slow adoption of the electronic air waybill across the industry. After 10 years of pursuing its e-freight transformation process, the global market adoption of the e-air waybill is only at 53 percent, with this year’s target 68 percent.
A key growth driver of air cargo is e-commerce with its huge volume and changing order behavior. The global value of e-commerce sales in 2019 will reach $3.5 trillion, according to research company eMarketer, but that is still less than 9 percent of total retail sales, which reflects the huge potential for growth.
The need for retailers to reach customers buying products online as quickly and as cost effectively as possible is forcing the air cargo industry to adapt. But as airlines and air cargo forwarders slowly drag themselves into the digital world, those involved in time-sensitive areas such as cold chain are powering ahead with game-changing initiatives.
One such strategy is a data sharing portal that has been developed by Amsterdam Schiphol Airport as part of its Smart Cargo Mainport Program. The portal was developed after a poll of the Schiphol cargo community on their priorities in the perishable cool chain found that the ability to track and trace at a box level from farm to auction was the top priority for all parties.
The portal is aimed at increasing trust and transparency in the supply chain by linking flower shipment data to air waybill numbers at source. Flower shipment data such as number of boxes, flower type, and number of flowers and stems in each box, is linked to air waybill numbers by the portal, which then generates a unique global standard 1 code, or GLN, that gives all users access to all the data in one place.
“The portal also ensures that only authorized parties have access to sensitive data, increasing trust and cooperation, and encouraging further collaboration towards common goals,” said Koos van der Meij, project manager of Schiphol's information sharing working group.
In flights by the Holland Flower Alliance data sharing working group — from Nairobi, Kenya, to the flower auction at Aalsmeer in the Netherlands — shipments of flowers, including product and shipment information, remained traceable throughout the journey in real time and on shipment level.
“Through close collaboration between the floriculture and air cargo sectors, we are now able to link two critical sets of data and increase trust between parties by making that data available to everyone at all times,” said Jonas van Stekelenburg, head of cargo at Amsterdam Schiphol Airport.
The unique GLN code comprises of a shipment reference and an order code, creating a universally recognized format that cannot be duplicated and providing end-to-end visibility that each supply chain partner can access through their own internal systems. This provides each party in the chain with more information, earlier in the chain, so that they can track and trace shipments in real time along the whole journey, more effectively planning their own operation and reacting in real time to changes in circumstance.
“The new portal uses a unique GLN code combined with an order number. This way the system excludes duplications of either order numbers or air waybill numbers.”
Marcel de Nooijer, executive vice president at Air France KLM and managing director of Martinair, said the initiative would increase efficiency and the quality of the flowers, and lower costs throughout the supply chain.
“The development and launch of this data-sharing platform is a real example that we are doing ‘new stuff’ benefiting all stakeholders in the floriculture chain,” he said.
While Schiphol airport uses the exchange of data to improve the inbound cargo supply chain, new data-sharing initiatives are also being applied to exports via the European Green Fast Lane project founded by KLM Cargo, Kuehne + Nagel, Swissport, Jan de Rijk Logistics, and Cargonaut, the information technology platform provider for Amsterdam Schiphol.
KLM Cargo’s Simon Spoor, project manager of the Green Fast Lane, said 80 percent of the freight flying with KLM from Schiphol was transported to the airport from other European Union origins by road.
“We wanted to focus on optimizing these trade lanes, which are so heavily used by the airport community,” Spoor said. “With efficient data exchange, and improved landside logistics, we can begin our processes before cargo has even arrived at the airport, and speed it through to its scheduled flight. For this reason, the project focuses on freight that arrives by truck to Schiphol, to be flown on to its next destination.”
The Frankfurt to Schiphol route served as a pilot lane for the European Green Fast Lane project aimed at streamlining operations. Delivery times at Frankfurt are spread throughout the day, while connections from Schiphol are guaranteed within fixed time brackets.
Spoor said in the event of a late delivery, a direct re-booking takes place as a standard service, but this was creating problems. “Roaming trucks around the airport were causing traffic congestion and unpredictability of freight delivery meant that consignments were not making it on to their scheduled flights,” he said.
It quickly became clear that a focus on improved data exchange and optimized landside logistics would be key in finding solutions to these issues.
Having identified that earlier availability of correct data would improve predictability and the utilization of flight capacity, Cargonaut developed an online compliance checker tool to aid the secure exchange of data. Upon acceptance by the handler’s facility, all freight is subjected to a ready for carriage check: is the freight on time for its corresponding truck; is the actual weight correct and reflected on the relevant documents; is the freight damage-free? Finally the compliance check: are the mandatory data fields on the air waybills correct? By sharing data between parties early in the chain, deviations to the booking weight and volume were identified much earlier.
Spoor said waiting times for transit trucks at KLM premises at Schiphol had been reduced, delivery of cargo at origin had been streamlined, and peaks had levelled off. The average waiting times for trucks at Frankfurt are now two to four times shorter than before, resulting in a reduction of local congestion and carbon dioxide emissions.
“[Cargo] flown as planned has on average increased 3 percent,” he said. “Crucially, by integrating data into the core of our process, we are steering on facts instead of assumptions and can create constructive continuous improvement through transparency of data.”
Philip Roodenburg, station manager at Swissport Cargo Services Frankfurt, said data sharing had the potential to optimize many areas of the air cargo business, and it was best achieved through collaboration with a common goal in mind.
The next rollout includes lanes to Amsterdam Schiphol from Brussels, Dusseldorf, Vienna, Madrid, and Barcelona.