Collaboration and transparency in the air logistics chain

posted on 13th December 2018

Several recent positive examples suggest that progress is finally being made, at least on a local level, reports Will Waters

Air freight stakeholders have long talked about the need for collaboration in order to streamline the fragmented air logistics chain, but concerns about issues such as sharing client-sensitive or price-sensitive information have often prevented meaningful progress.
But several recent positive examples of collaboration within airport cargo communities, for example in Europe at Brussels, Frankfurt, and Amsterdam airports, suggest that progress is finally being made, at least on a local level.
In a discussion at this year’s Air Cargo Handling Conference in Brussels, 65% of the audience said they believe the sector is doing better, in terms of more collaboration and transparency, than 10 years ago. Steven Polmans, head of cargo at Brussels Airport, expressed surprise that the figure was so high, while Patrik Tschirch, CEO of German air cargo handler LUG, suggested there has been progress in talking, but not so much progress in taking practical steps. And Fredrik Wildtgrube, head of global sales at Finnair Cargo, believes there is more of an appreciation at a senior level of the need to collaborate, but it is not necessarily passed on through the organization.
Jean Verheyen, CEO of air freight data-sharing specialist Nallian, says companies “are doing pretty well at optimising their own organisations, but the ecosystem has made less progress. So, 65% is a good score, but it’s not so good compared with what it might have been.”
Henrik Ambak, SVP for operations at Emirates SkyCargo, says the experience of the air freight quality initiative Cargo iQ indicates that companies are willing to successfully collaborate “when they have something to collaborate around; when they find something they can actually use”. He points out that several of the major global forwarders are now using Cargo iQ and its processes to plan and track their air freight shipments, thanks to data provided and shared between forwarders, airlines and handling agents.
In his role as moderator for the discussion, Polmans questioned why have we not made more progress in collaboration, despite the threat from the integrators and now e-commerce disrupters. Wildtgrube responded: “Collaboration requires a lot of investment of time and effort. But as long as all the different parties are contributing honestly, with shared goals, the results are fantastic: promoting supply chain accuracy, speed and throughput time, keeping items on the shelves, and making sure customers are getting items at the right time and in the right condition. Yes it does work, but you have to understand and go and work out what is the tool that you want to use?”
Nanne Onland, CEO of Amsterdam Schiphol Airport community technology provider Cargonaut, said air freight’s current ways of working are very wasteful, noting that the automotive industry “is a really good example of an industry with a collaborative ecosystem; that has meant that there is no waste in the (automotive) supply chain, and that has cut development cycles from seven years down to two years.
“That should be a reason to want to change what we do today.

The technology is there
Verheyen says: “The technology is there, and there are some good examples now. I think the most challenging part is the trust between the parties, and that is something that we build up very slowly with a ‘coalition of the willing’. With the first success, that attracts members to the group, and that brings added value. But it is something that takes time.
“However, there are some nice examples now, and this is partly about culture of companies, not blaming those inside or outside, but having more trust between the parties − for example, Pharma.Aero, and also some of the (airport cargo) communities.”
Tschirch agrees that it is on the trust side where things are often lacking. But this can be overcome with a shared ambition and shared, transparent benefits, he believes − as has been demonstrated this year in an initiative at Frankfurt airport.
“In the Frankfurt community, because of all the problems we had last year, we had to change something drastically,” he notes. “It came down to a very small number of people saying we want to come up with something, using transparent data, and we created a truck door booking system. It works, and we were able to build trust because we had everybody at the table to talk about it and bring the issues up, and we showed them the numbers.
“And the debate moved on from ‘why should I do it?’ to ‘how can we improve it?’ It is not questioned any more, now that we have built the trust, and I think that is the key message.”
He continues: “We have to stop keeping all the data and the numbers to ourselves; and that includes the shipper and the forwarder. We all know that this is a fast-moving industry, and that it is not going to be perfect; but what we have right now is not helpful, and it is the bigger picture that is more important.”
Wildtgrube observed that in our personal lives these days, we are often quite happy to share information, for example via social media. But we tend to switch off this willingness in the work environment. He wondered why.

Data trust
Onland says it is “all about data and data trust”. He suggests that, in this context, people should now “forget about the e-AWB, and messaging”, adding: “That was a necessary step to get where we are; but I think it is now all about data.” Onland points out that “the data is there, with governments demanding pre-flight data for some years now”, and companies are sufficiently trusting of the respective government authorities to send the necessary data, in advance of cargo moving.
“The second issue is how to use the data in order to improve things for all of us, on a business level,” he adds. “But you need a referee – someone to tell you that you can trust this data, or trust this procedure. Plus I think you need an external thing to happen.” For example, EU regulations on e-commerce will change in 2020, and this will drive people to change, he noted.
“So we need this change from the outside, we need a political structure, and the data is there.”
Verheyen adds: “I see the community (such as Air Cargo Belgium) as an instrument. You need a place, a coalition of the willing, where people can come together and who finally drive through the procedures that you would like to digitalise. So, for me, the two go hand in hand: the technology and the community building.”
He adds: “Coming back to the trust issue, ideally you will have a kind of gain-sharing element, whereby gains made by collaborating with be redistributed to all of the parties involved in the collaboration, although I’ve not seen any good practical examples until now.”
He adds: “It is instrumental to have trust between the parties, and then everybody will be better off collaborating; you have to be able to rely on each other.”