Marcia MacLeod discovers a handling sector that has been transformed through IT in the last few years
Anyone visiting a cargo handler’s premises even five years ago would most likely find many − if not all − processes were still controlled manually. Today, thanks to Iata’s e-Freight initiative, Cargo2000, and the development of the internet into a universally used, multi-faceted business tool, white boards have been consigned to the dustbin and almost no handler is without a desktop, laptop or hand-held scanner.
“The business model for airfreight has changed,” emphasises Steve Hill, product development manager at Champ. “It has become more important and some companies are waking up to the benefits of e-Freight and Cargo 2000.”
Electronic air waybills are now commonplace, as are status updates and information on special cargo, such as dangerous goods or express shipments. Security requirements are getting tighter and tighter worldwide, requiring more pre-arrival − or even pre-shipment − data to be sent to the airline and on to customs or other authorities.Champ is piloting an electronic cargo security declaration in the UK, with the help of Iata. This will allow a handler to ensure cargo has been security-checked − eg x-rayed − and, if not, to do it themselves and then confirm completion of the action. The pilot will be extended to other EU countries this year.
Globally, customs organisations are increasingly requiring entries, as well as security information, in electronic format, too. In Europe, the latest customs development, the Import Control System (ICS), is causing headaches for more than a few handlers − and, says Howard Griffin, MD of Airline Bureau Systems (ABS), “nearly every country has an ICS equivalent”.
He adds: “Although the airline is responsible for submitting ICS data to customs, most have appointed handlers as their agents. Handlers have to make sure the correct information is obtained in time to make a timely submission to customs. Over 30,000 ICS transactions per month are being handled by our software for our four major handler customers.”
The best computer systems alert handlers if ICS data has not arrived yet; if there’s a problem with data − eg error or inconsistency; and if customs has rejected the entry for any reason. They also tell handlers if electronic data is not accepted on a particular trade lane, as there are some places that still demand hard-copy paperwork.
“ECS (Export Control System) is more straightforward,” Griffin continues, “partly because it deals with master waybills, whereas ICS deals with house waybills. Customs is fussier with ICS, too − the EU is talking about reducing the time at which ICS data must be submitted from five hours before a flight to two, to enable customs to return a ‘do not load’ message, if it wants.”
Iata has expanded its Cargo Imp messages to include ICS. “There is, for example, a CSN − Customs Status Notification,” says Bernd Dubau, head of business unit at Lufthansa Systems, who adds that the ECS is being expanded, too, to meet new security requirements.
Handlers have to ensure data is accurate, which is when good communications with airlines becomes vital. Historically, airlines have expected handlers to communicate with them in the way that suits the airline − forcing handlers to use different systems to meet different airline requirements. Cargo 2000, e-Freight and the internet are all going a long way towards creating more standardisation.
“In the past, handlers had to use diffrent systems for different carriers,” says Hill. “Today, everyone is on the same system: the internet.”
Griffin adds: “Big airlines have always worked closely with their handlers. It’s the smaller carrier without a cargo department that may cause problems. But we’re working more closely with airlines to ensure the correct information can be exchanged with handlers electronically. The main difficulty is some airlines’ old and cumbersome legacy systems. A few carriers, such as United and Virgin, have moved to modern systems, but it is a slow process.”
There are still differences in airline requirements. The invoicing module for Lufthansa Systems’ Elwis software is, says Dubau, ‘complex and flexible’, to cope with variations in billing. “Every airline wants invoices differently; our software can charge the airline, the forwarder or the shipper.”
More standardisation is likely, as handlers demand a bigger place at the negotiating table.
“It is handlers who have to put into place most of the industry’s initiatives − eg Cargo 2000 − but they are often overlooked when these initiatives are discussed,” says Hill. “Software companies, too, are ignored, but we play a vital part. The information flow goes from forwarder to airline to handler and back again − but it is the technology that allows that data to be sent.”
Hermes is working on a new, cheaper way of handling messages. “Messaging costs are a killer for the handling agent and the airline,” says Steve Montgomery, chief cargo officer. “We’re working with Edifly to enable cheaper messages to be sent, by-passing Sita. Edifly can handle Iata, Edifact and XML messages.”
Software companies have to ensure handlers’ systems comply with e-Freight and Cargo 2000, but neither has presented any real problems. “We had to undergo some development to comply with e-Freight and Cargo 2000 to ensure messaging is in the right place at the right time,” Montgomery admits. “But most of our software was already there. In fact, late last year Cargo 2000 complimented us on a report we wrote for one of our customers, saying the reports sent in were the best they’d seen.”
Mercator and ABS were already compliant with e-Freight and Cargo 2000, while others had to make minor changes. Champ upgraded some of its messages, such as the Freight Waybill and Freight Status Update, while Lufthansa Systems tweaked its program to ensure messages are in the correct format.
Instead, software companies are putting their energy into new modules and improving web enablement. As customs and security authorities are now treating airmail as freight, systems are being adopted to suit. Some new modules are being written to accommodate airmail. “Hermes could already handle airmail at a low level,” Montgomery points out, “but we’ve upgraded that to offer a full inbound/outbound mail module. The big benefit to handlers now is there is one system for everything, whereas before mail was handled differently.”
Hermes has also improved its web capability so its customers can enable their customers to check cargo status, charges, etc. “Customers can pre-register their trucks before they arrive, too,” says Montgomery, “and see how many vehicles are in the queue. When the driver turns up, he still has to go to reception, but gets priority over non-registered vehicles.”
Warehouse management systems (WMSs) are also being introduced. “Existing WMSs aren’t really suitable for air cargo,” says ABS’s Griffin. “They’re geared to cargo that is all the same type and/or size, whereas every piece of freight is different.”
ABS is developing its WMS to enable handlers to make the most efficient use of resources, including manpower. “Handlers need to know what piece of freight is put on which pallet, for which aircraft,” Griffin says. “At the same time, they need to be able to allocate the right staff to the right job – for example, someone with dangerous goods training to deal with dangerous goods shipments. Handlers also want to be able to look at a flight and see how much of the cargo has been loaded – or not. The use of hand-held scanners gives more accurate information, as goods are scanned onto a pallet, into the warehouse, and so on.”
Mercator, currently planning a new generation of cargo handling software, is already working on a warehouse module, to go live in the Middle East in April. “Our customer wants better visibility of what’s coming in, what has to be palletised, etc,” says VP Duncan Alexander. “Handlers want better information about their cargo, including the ability to see the profitability of every consignment quickly and easily.”
Warehouse planning also links into the service-level agreements (SLAs) − and Lufthansa Systems is just one company that has launched, or is currently developing, a new SLA module. “The handling agent needs to know if it has met SLA targets, as that affects how much they can charge,” Dubau points out.
Champ and Hermes have also added or improved their SLA/business management tools to provide better reporting.
Trucking control is also being addressed. ABS launched a truck manifest and control system so that handlers can plan which trucks are going out with what cargo and which are due in. Links to in-cab systems for handlers’ own fleets will be added later this year.
As handlers’ responsibilities expand, so does the IT needed to control the business. Anyone trying to work the way they did five years ago simply wouldn’t survive.
When Flightcare was part of Sabena, the Belgian national carrier, all cargo handling activities were controlled by Unisys, which Sabena had installed to run every aspect of the airline’s operations. But when Sabena went bust in 2003, Flightcare inherited an all-encompassing system that was big, complex and very expensive to maintain.
“We didn’t really have a problem with Unisys,” says Jan Bories, cargo process manager, “but it was just too expensive to maintain, update and support. If we wanted any changes made, it was a lengthy and costly process, too. We looked around and found Airline Business Services was the best system for our needs. ABS is more flexible than Unisys, so that it is easier to expand and enhance the system.”
Flightcare, which handles approimately 180,000 tonnes of cargo at its 25,000 sq m Brussels warehouse, uses ABS to help control inbound and outbound cargo. “The warehouse module helps us to build pallets,” Bories explains. “A booking list is turned into a work order, which tells the warehouse staff what to put on a pallet for a particular flight. If there are too many items for the pallet, and something has to be left off or the load is split into two, cargo left off the pallet is put back into the system for the supervisor to re-allocate.”
There is also a module for dangerous goods, which tells staff where to store incoming cargo. Other non-standard cargo, such as express shipments or perishables, are identified by a special code so that it can be stored and handled correctly.
“Alerts for special cargo are limited,” Bories admits. “The software won’t tell us not to load two incompatible dangerous goods together, for example. But we’re happy with that because we run comprehensive training for all our staff before they are allowed to work on their own.”
When inbound pallets are broken down, status updates are sent to the carrier. Forwarders can also obtain status updates, if desired.
All data for inbound cargo is input into ABS to enable declarations for customs’ Import Control System to be completed and submitted. “We try to ensure all data is sent to us electronically, but not all airlines or forwarders are geared up for that yet,” Bories adds. “ABS can cope with all types of messaging formats, but some of our customers still use faxes, or send incomplete data. Sometimes only 30% of the data sent is accurate and/or complete.”
The system is constantly being enhanced. An SLA module − SLAM − was added last year to allow Flightcare to ensure it is meeting performance promises for each consignment. “In the past, the supervisor had to look at a lot of data constantly to ensure we were complying with our SLAs. Now he can see at a glance the status of each flight. Alerts are sent, too − for example, an alert is sent 15 minutes before closing time if the cargo is not ready to load.”
The warehouse module is also being enhanced to help Flightcare comply with Cargo 2000 and e-Freight. In addition to supporting most of its 35 cargo customers’ Cargo 2000 activities, Flightcare itself is currently going through the auditing stage of its accreditation process. It is also one of the handlers promoting e-Freight and e-customs at Brussels, helping to set up a working group with handlers and forwarders to develop e-Freight on the airport.
Next Flightcare is looking at installing a trucking module to plan for the arrival of vehicles. “The big issue for us is getting carriers to inform us about trucks they are sending our way,” Bories comments. “We usually have information about outgoing vehicles, but need a clearer view − and don’t always know when an inbound vehicle is coming until it turns up.”