TIACA ACF 2014

Workshop 4: Technology – What Lies Ahead for Industry?
October 8, 2014 11:00am-12:30pm

What is needed to improve cargo screening? What systemswill emerge to support small forwarders in managing data? How can industry better share data among itself, and tomeet regulatoryrequirements? How can the full supply chainbe better physically secured to facilitate trade?

Subject Matter Experts:
•Amar More, Vice President, Kale Logistics Pvt. Ltd.

•Brandon Fried, Executive Director, TheAirforwarders Association

•Moderator: Guillaume Drucy, Head, Cargo e-Business Management, IATA

•Jennifer Haigh, Strategic Accounts Manager, Morpho Detection

•John DeBenedette, Managing Director, Worldwide Information Network (Thailand) Ltd.

•Jos Nuijten, Vice President of Network Integration Strategy, Descartes

•Kevin Lee, Global Standards Team, GS1 Korea

•Michael Gildea, Senior Director of Business Development, L-3 Communications

•Murray Kidd, VP & Global Head of Sales, IBS Software Service (P) Ltd

•Neel Shah, President, JS Aviation Consulting, Inc.

•Steve Hill, Principal Industry Consultant, CHAMP Cargosystems UK

•Yong-baek Cho, Deputy Director, Korea Airport Service

OVERVIEW

Workshop 4moderatorGuillaume Drucy opened the session by noting that technology delivers many benefits for the air cargo industry: it improves speed and efficiency, enables better service, provides a balance between reliability and cost, and supports the growing demand for e-commerce and cold chain shipments. He indicated that the workshop would focus on the following “big topics” related to technology:

-What is the relationship between security and technology?

-How should we improve the air cargo industry, and how should we use technology to support this improvement?

SUBJECT MATTER EXPERT AND GROUP DISCUSSION

The Subject Matter Experts and workshop participants engaged in wide ranging discussions about the relationship between security and technology, and about how best to leverage technology to improve the air cargo industry. The major points of discussion are summarized below.

Security and Technology

  • There should be common standards for advance data sharing for aviation security risk assessments. This would enable IT providers to design better programs for providing the necessary data. If the WCO and ICAO do not develop such standards, they are likely to develop by default once the U.S. or EU implements the advance data programs they have been piloting (ACAS in the U.S. and PRECISE in the EU). This could promote inefficiency in the industry. For example, a shipment might be screened in the United States in compliance with TSA regulations but, under PRECISE, might be required to undergo additional screening.
  • The air cargo industry should support efforts to adopt a risk-based approach to security. However, such an approach hinges on access to accurate, timely data - so it will be critical for the industry to be able to provide this to regulators.
  • Participants agreed that, optimally, there should be global standards for providing advance data, and a global platform for sharing data among supply chain members.
  • Advance data is one part of the interrelationship between air cargo and security. Another aspect is physical security. In this realm, there is a lot of equipment and technology designed for the air cargo industry. Suppliers need to be close to their customers and need to understand relevant regulations and operational requirements, to better comprehend the needs of end users.

Leveraging Technology to Improve Industry Efficiency and Quality

  • Participants agreed that the industry should seek to improve its efficiency and quality. However, there was some question as to how best to use technology to do so. Some small and medium sized forwarders, while not opposed to e-freight and other efforts to digitize, have concerns about going paperless. They recognize that other modes are outpacing air cargo in terms of using technology, but feel the concerns of smaller operators are being ignored in the effort to implement e-freight. There is also a concern that relying on digital processes will eliminate the personal touch on which many smaller forwarders have built their business. In addition, there is some fear of the disruption that digitization will likely bring.
  • The benefits of e-freight will need to be identified and articulated for each constituent in the supply chain, in order to help persuade slow adopters to make the change. In addition, it may be time to stop trying to sell e-freight based on a paperless future, and the potential cost savings from that. Instead, we should emphasize the speed and qualitative improvements that e-freight will bring.
  • The Netherlands’ SmartGate initiative may offer an instructive process for moving forward, as it demonstrates what can be accomplished by bringing all relevant parties together, forging a cooperative environment, and working to improve each member’s processes. The result is not only improvements for each individual party, but a collective advancement for everyone’s interests.
  • There are four areas driving technological developments for the industry: social media, mobility (reducing dwell times), analytics, and the cloud (which reduces costs and provides technological alternatives). These are sometimes referred to by the acronym SMAC.
  • In looking to the future, we need to develop systems that deliver the right information in a timely manner to those who need it. Freight needs to be more intelligent, and it needs technological innovation to get there.
  • As an industry, we need to do a better job of re-using data. A large portion of shipment data can be shared and re-used, and the industry should develop a platform for doing so. This would significantly boost efficiency, and it should be the future direction for the industry. This concept was actually explored roughly 15 years ago, as a means of moving the industry to a paperless state. At the time, the first concept proposed by IATA was a common platform, or a “common data exchange (CDX) for cargo.” However, when IATA formed a working group to explore this proposal, the industry consensus was against a common platform – there were concerns about sharing data and about what would happen if the system broke down. As a result, the concept was abandoned and e-freight was developed. Now, however, sentiment appears to be changing, and workshop participants enthusiastically endorsed the notion that the time has come to develop a common platform.
  • Cargo 2000 has developed the Industry Master Operating Plan (MOP), which is the only detailed process model for the air cargo industry. Industry members should consider whether the MOP could be the foundation for a common platform.

CONCLUSIONS

Workshop participants agreed that, optimally, there should be global standards for providing advance data, and a global platform for sharing data among supply chain members. The latter conclusion was the overwhelming focus of discussion, with participants issuing a strong call for the industry to find a way to share, and re-use, data across the industry. This would significantly boost industry efficiency.

The industry will need to create a new industry forum for thrashing out all the details of a common platform. While all parties agree on the need for this initiative, it will nevertheless be a huge challenge to bring all the parties together and to persuade them to work productively and collectively to reach this goal.

Participants recognize that developing such a platform will be difficult work, but believe a new industry forum should be created to pursue this initiative. The Cargo 2000 Industry MOP may provide a foundation for the platform, and should be considered by the members of the forum. The work on this initiative should begin soon, as it should be an essential part of the industry’s future.