Forwarders need to see greater benefit before embracing e-commerce with air carriers

Freight forwarders need to see realisable and significant value added to the airport to airport portion of the air cargo supply chain before making a commitment to e-commerce such as the IATA led e-freight programme, according to a global survey of some 450 freight forwarders conducted jointly by FIATA, the International Federation of Freight Forwarders Associations and TIACA The International Air Cargo Association.
 
Freight forwarders from 84 countries responded to FIATA and TIACA's poll to ascertain their views on e-commerce with the largest number of participants from Australia, Canada, Egypt, India, Netherlands, Pakistan, Singapore, South Africa, Spain, Taiwan, United Arab Emirates, United Kingdom, United States, Vietnam and Zimbabwe.
 
According to the survey, some 55% of respondents stated they were aware of IATA's e-freight project yet less than 20% said they were participating in the initiative.
 
Bill Gottlieb, Immediate Past President of FIATA, who helped lead the research, said, "The initial findings clearly show a positive shift in forwarders' attitudes to e-commerce with forwarders willing to invest only if airlines do likewise. They see themselves evolving and becoming more recognized as the carrier's customer in the air cargo supply chain and pursuing modernization of the documentary process to entice them towards technology led industry initiatives."
 
"Whilst many positive messages came out of the survey, it is clear that as an industry we have much more to do to make forwarders embrace e-commerce in the air mode, as they have already done successfully with land and marine transport. With nearly half of the forwarders claiming not to have heard of e-freight, we have to find ways to reinforce the message. It is clear the industry has to evolve to a new way of doing business utilizing e-commerce but we need to broaden the approach and think outside of the box in terms of how we embrace technology," he said.  "IATA was successful in thinking outside the box when it implemented paperless ticketing, making life simpler for passengers and less costly for carriers.  We have therefore asked IATA to collaborate with FIATA to create a new cargo documentary and data flow driven by technology, to simplify the process thereby eliminating an antiquated process. This should also drive change in the status of the forwarder and airline relationship."
 
Gottlieb added: "There is great potential for companies to embrace today's e-commerce standards so they benefit from the efficiency and enhanced customer service capability but we have to focus on value added if everyone is going to win in the future. Air cargo remains woefully behind other modes of transport in terms of e-commerce. We know that for every industry it takes time and investment to build momentum, but right now there clearly isn't enough value added to entice many airlines and the wider international forwarding community to 'come to the table'. "
 
Daniel Fernandez, Secretary General of TIACA, said: "The IATA led e-freight program is clearly the most significant e-commerce initiative in our industry, as highlighted by the latest announcement that DHL Global Forwarding and Emirates SkyCargo are pairing up in a new project to sufficiently reduce errors and eliminate tons of paper documents across their networks by becoming the leading implementers of e-freight. However, the survey clearly shows that for other forwarders around the world, we as an industry still have a lot to do to promote the full benefits of trading electronically and eliminating paper from the air cargo process."

He added that the need to work together with industry partners to facilitate important new e-commerce developments can also be supported through the new global industry advisory group being created TIACA, FIATA, IATA and the Global Shippers' Forum (GSF).
 
Daniel Fernandez said: "E-freight is making some progress in terms of moving the air cargo supply chain to an electronic, paperless environment. That is vital when you consider that air cargo shipments can require as many as 30 paper documents. This unnecessarily slows the air cargo process and is an undue strain on resources. It is estimated that the volume of paperwork that currently accompanies airfreight shipments is the equivalent of 7,800 tons, which is sufficient to fill 80 747 freighters annually. That isn't sustainable in modern day business, particularly for an industry needing to optimize cost efficiencies so as to remain competitive and in profit.
 
"We strongly support automation and paper-free transactions and, as such, TIACA endorses e-freight as a viable means for achieving these goals for the air cargo supply chain. Nonetheless, we cannot ignore the feedback from freight forwarders that completed the survey and we want to share the subsequent analysis with our industry partners to see how we can make e-commerce more viable and an even bigger priority for all players in the air cargo supply chain in 2011. Everyone needs to see how it is going to lower their costs and improve their efficiency."