Forwarders Need to Become More Savvy about E-Freight

Feb. 11, 2011
Freight forwarders need to see realizable and significant value added to the airport-to-airport portion of the air cargo supply chain before making a commitment to e-commerce

Freight forwarders need to see realizable 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 program, according to a global survey of 450 freight forwarders conducted jointly by the International Federation of Freight Forwarders Associations (FIATA) and The International Air Cargo Association (TIACA).

Fifty-five percent of respondents say they are aware of IATA’s e-freight project, but less than 20% say they are participating in the initiative.

"The initial findings clearly show a positive shift in forwarders’ attitudes to e-commerce with forwarders willing to invest only if airlines do likewise," says Bill Gottlieb, immediate past president of FIATA, who helped lead the research. "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."

Gottlieb believes the industry has to do much more to make forwarders embrace e-commerce in the air mode, as they have already done 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 says.

"IATA was successful in thinking outside the box when it implemented paperless ticketing, making life simpler for passengers and less costly for carriers," Gottlieb continues. "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 adds, "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."

According to Daniel Fernandez, secretary general of TIACA, "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," he says.

"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," Fernandez continues. "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."

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