Digital Cargo: a welcome push forward for a lagging airfreight industry
Digitalisation is a process in which the Air cargo industry has lagged embarrassingly behind. With paper documentation remaining the industry standard, we now need to play catch up fast or risk becoming hopelessly stuck in the past.
Fortunately, we have a chance to change all that. First steps were done by IATA almost 10 years ago when the regulator announced the eAWB standard: The electronic Air Waybill (e-AWB) is a standardised digital version of the existing paper Air Waybill — a document that follows the cargo on its long journey from shipper to end customer.
As of January 2019 the International Air Transport Association (IATA) declared the e-AWB its default contract of carriage. Yet still only 60% of the industry has adopted it as of March 2019.
Adopting this new standard is the first step for the air logistics industry moving forwards. With the current paper-based system, physical documents have to be tracked and processed through a complex chain of agents including shippers, haulers, local customs, and ground handling agents before they reach the recipient.
Is adopting eAWB enough? What about the other 20 plus documents accompanying the shipment through its journey?
All participants in the supply chain are experiencing huge inefficiencies in the speed with which data can be shared, a lack of end-to-end transparency, potential errors and delays. Not to mention environmental costs — each year, more than 7,800 tons of paper documents are processed, according to IATA, the equivalent of 80 Boeing 747 freighters filled with paper.
Digitalization of the documentation and the processes will increase the efficiencies in tracking of goods and data exchanges between airlines, trucking companies, forwarders and shippers. It will also reduce costs and delays and ease security compliance and customs clearance issues, leading to an overall improved customer service. With current documents needing to be physically scanned into computers to digitise the information, the biggest win will be in speed and quality of information exchange, which will happen effectively in real time.
Digitalisation also opens up pathways to new technologies like the Internet of Things (IoT), blockchain and Artificial Intelligence which will lead to further improvements in logistics control, customer service, innovation and commercial opportunities.
But it’s not just the efficiency gains that make switching to digital cargo a necessity; it’s the threat from more digitally agile competitors like Amazon, Alibaba and Walmart who are all in a strong position to disrupt lagging logistics markets.
Some digitally focused air carriers and logistic companies such as Lufthansa and Emirates have already adopted the e-AWB standard and have created their own APIs to process some advanced digital information. Others are trying to catch up in this dynamic environment where unfortunately a digital industry standard is still missing.
And we understand that companies like Delta Air Lines and United Airlines are planning on rolling out their own APIs this year. Therefore we expect the adoption of digital processes and digital cargo — as new means of transportation business — to accelerate, with more industry players focusing their resources on the matter in the coming years.
Sciant, with partner Frontline Dynamics, is already working on developing a ground breaking cloud-based multifunctional platform that allows forwarders, airlines, trucking companies and GHAs to exchange and store data on AWBs standards, communicating efficiently and issuing fully digital pick-up orders to truckers and most importantly make fully digitalized payments for the pending charges. Such a solution will greatly digitalize the process, optimize the handling of cargo and reduce massively the paper documents and significantly reduce wait times and congestion at airports.
The Air cargo industry can no longer afford to bury its head in the sand. Digitalisation is the future and those who don’t adopt it will be left behind.
If you’re an airline, freight handler or freight forwarder and want to digitalize your processes, we can help. Let’s start your digital journey today and bring your company on the frontlines of the new, increasingly connected and more efficient air logistics community.