Carriers and cargo handlers in North America are placing greater emphasis on customer relations and paperless processes in what remains a difficult business environment, writes John McCurry
As the air cargo sector continues to navigate a difficult business landscape, carriers and cargo handlers in North America have made significant progress with e-Freight – with the US now the world leader in terms of e-AWBs by volume – and have also been placing greater emphasis on customer relations. Carriers say the industry has learned it must listen to its customers’ needs and ensure they are being met, and so companies are developing new ways to deliver on promises.
Jan Krems, president of United Cargo, says his team is focused on measureable improvements in key metrics that impact customer satisfaction, including keeping the commitments made to the customer to fly their shipments as planned – and have them available at destination on time and as promised.
“We’re very pleased in the improvements we’ve made in our worldwide quality and efficiency, which are backed up by our internal measurements, IATA’s Cargo 2000 (C2K) statistics, and other industry data – and, most importantly, feedback from our customers,” Krems says. “United Cargo is making use of new technology to measure our operations in more ways, and we’re using the knowledge and insight we gain from this data to generate improvements worldwide. The whole team is focused around one goal: quality, quality, quality.”
And American Airlines Cargo, coming out of the integration process with US Airways, is focusing on partnerships and cultivating customer loyalty, as well as seeking to make business easy to do through all of its “engagement points”, says David Vance, cargo vice president. “A customer experience team was established during integration, as well, to focus on improving the experience for every functional group in cargo working or speaking with customers. They’ll continuing to deliver improvements in our service performance by adding a focus on being more consistent in policies and procedures across the system and continuously looking for ways to better our operation.”
Across the border, Air Canada has also been ramping up its customer service programme. Lise-Marie Turpin, the airline’s cargo vice president for the past seven years, says the carrier is focusing on examining processes from a customer’s point of view and trying to understand what the “pain points” have been.
“We are seeing some results from listening to a snapshot of what the customers were telling us a year ago,” Turpin says. “We are now conducting those same visits and we have made inroads and provided customers with better service. I am quite happy with that approach. The methodology is moving forward and we have a better understanding of what the customer is looking for.”
Meanwhile, Jason Berry, cargo managing director for Alaska Airlines, says the carrier is actively exploring the modernization of its on-line booking tool and already offers automated shipment status update messages via email or text. “Keeping our customers informed of the status of their goods as they move through our expanding network is a critical part of the service we provide,” Berry says.
But better service can also come from an improved offering in the air. “Earlier this year we announced our commitment to convert three of our 737-700 passenger jets into freighters,” says Berry. “These aircraft will replace our existing 737-400 fleet of five combis and one dedicated freighter. The combi aircraft have been a workhorse for us in the state of Alaska and have served a great purpose for our passengers and cargo customers. Moving to a fully dedicated fleet of freighters will allow us to maximize our capacity, offering schedules that best suit the needs of those in our communities that rely on air cargo.”
Cargo officials at IATA believe quality is being improved, crediting the incremental move to electronic gathering of data. “Much of this is driven by defining processes and using electronic information to determine the hiccup points and reducing data errors,” says Mike White, director of cargo facilitation and standards for IATA’s US organization, Cargo Network Services (CNS). “We should see improved processes still as we move to full electronic, and data can be better utilized to scrutinize where areas of improvement can be made.”
US tops e-AWB countries
While the global air freight sector won’t reach IATA’s goal of 45% adoption of electronic airway bills (e-AWB) by year’s end, progress has been steady, albeit slow. Although the US was slow to get started with e-Freight and last year trailed the global average for e-AWB penetration by several percentage points with a penetration rate of around 20%, it has made strong progress this year. Indeed, in the 12 months, to September 2015, average US e-AWB penetration rates more than doubled from 16% to September 2014 to 33.9% in September 2015, almost catching up with the global average of 34.2%. And in terms of global rankings by e-AWB volume, the US this year overtook Hong Kong as the number one e-AWB country of origin.
White notes that North America as a whole has recorded consistent growth in 2015 with the US, Canada and Mexico [which IATA typically groups in Latin America/Caribbean] showing significant progress. For example, he says in September 2015 one out of three shipments in and out of the US were e-AWB.
Canada, which ranks 15th globally in terms of e-AWB volumes, saw these rise by around 56% in the 12 months to September 2015, while Mexico (32nd worldwide) saw its e-AWB volumes rise by 63% over that period.
“We are seeing more carriers with serious roll-out plans that are working with their operations and ground handling partners to simplifying the process for forwarders,” White says. “IT companies have also developed solutions for their customers that allow the airlines and forwarders to become more electronically capable. Other factors affecting the ongoing rollout in the region has been the US government’s move to fully electronic import and export in the next few years under the Automated Commercial Environment system (ACE). This is a natural fit for e-Freight.”
IATA notes that the ‘Big 3’ US carriers – Delta, American and United – have taken the lead by aggressively adopting e-AWB at their main gateways. Other airlines making good strides are Air Canada, Cathay Pacific, International Airlines Group and LAN Cargo. And some leading airports in terms of e-AWB penetration include Dallas-Fort Worth, Miami, Atlanta, Los Angeles, San Francisco, New York JFK, Montreal, Toronto and Vancouver.
US-headquartered freight forwarding and express companies have also contributed to the improvement in e-AWB update this year, with Expeditors, UPS and FedEx all among the top 10 global freight forwarders by e-AWB volume.
Delta pulls ahead
Delta leads the pack in terms of US carriers with an e-AWB penetration rate of 61.5% in September. It is also the only US carrier among the global top 10 airlines in terms of e-AWB volumes, coming in at number 10.
American Airlines’ Vance says the carrier set modest e-AWB goals in 2014 as the integration with US Airways unfolded. American is now pushing ahead with full force. It now has 60 stations open to e-AWB, including the vast majority of stations that have international service. American’s adoption rate reached 24.6% in September and has a goal of 30% by the end of the year.
“As the industry initiative continues to gain momentum, we’ve really been working to support our shippers and forwarders on the path to a paperless operation,” Vance says. “Without our partners, the supply chain doesn’t run properly, and aligning our goals is the first step needed to modernize and maximize the quality and efficiency of our products and services. We support the single process that allows forwarders to send all shipments through a location via e-AWB and are developing internal technology that will help us better support e-AWB and this centralized process.”
Turpin reports that Air Canada is making steady progress with e-AWB, reaching a 38% rate at the end of October. “We are shy of the 45% goal, as is the industry in general,” she says. “The industry realizes this is a complex issue and we are taking the steps we need to, such as introducing a new booking tool on our web site.
“We’ve tried to make it as easy as we can for our customers,” she adds. “When we look at the total volume of shipments that we handle worldwide, we offer e-AWB for about 70% of the volume we carry. It’s taken a lot of work to get up that number.”
At least one major airline is confident of achieving the 45% mark by 31 December. United stood at 36% at the end of October and Krems says the carrier fully expects to meet or exceed 45% by the end of the year.
“United Cargo is a strong supporter of IATA’s plan to establish the e-AWB as a necessary precursor to achieving complete e-freight,” Krems says. “We are participating with 16 other IATA member airlines in an initiative to establish the e-AWB Single Process as the preferred means of shipping cargo to all destinations from the largest-volume European airports. This project reduces the barriers to e-AWB adoption by providing a process that meets the needs of forwarders and carriers, as well as customs and security officials, in each location.”
Alaska Airlines is not currently participating in IATA’s e-AWB initiative, but plans to do so, Berry says. “Although Alaska is not yet on board with the global initiative, we have been operating as a paperless carrier for many years. Our customers do not need to tender a paper Air Waybill to fly on Alaska and we do not send any hard copies to our down-line stations. Our paperless environment works very well internally; we are eager to begin working with forwarders and other customers capable of transmitting all of their data to us electronically.”
But quality performance also means investing in infrastructure on the ground, and Vance says American has put a lot of investment into improving facilities. This includes its cold chain facility in Philadelphia. “We’ve also expanded our footprint in key locations, invested in improvements to some of our hub buildings, and are now taking delivery of a long list of new, optimally reliable equipment, trucks and tractors,” Vance says.
“And at some of our highest-traffic stations, we’ve provided staffing additions, cargo warehouse enhancements for efficiency purposes, and increased the frequency of performance reviews. These measures are all to ensure consistent operational success and change for the better.”
Third-party cargo handlers are also focusing on quality improvement. Consolidated Aviation Services (CAS), the largest independent cargo handler in North America, says training is an important aspect of this, which is a challenge in a sector with a notoriously high staff turnover rate. Ray Jetha, senior vice president of sales, says CAS recognized that the conventional industry approach to training was not sustainable in today’s aviation environment, particularly for a workforce of some 4,000 people.
“So we invested in a professional learning system to create a much more dynamic and effective learning environment and that is designed to not only maintain the quality of service for customers but to also support the development of our people and encourage them to stay and further their careers with the company,” Jetha says. “Staff retention in the cargo handling industry is an issue. Some companies have perhaps been reluctant to invest in training and developing people because they believed staff would move on too soon, but we wanted to change that way of thinking and give our staff the reasons they needed to stay with us, because a stable workforce in which people know their jobs is so important to quality of service.”
The company created the CAS Learning Academy, an online Learning Management System developed for CAS by the global consulting and training company 21CC Education LLC. Jetha says that resulted in a robust and multilingual training and development tool for employees, in which paper-based presentations and manuals have been replaced by new e-learning tools.
“Our in-house trainers now use the Learning Academy to set up, manage and deliver training schedules for employees across a range of subjects such as palletization, ramp handling, export processes, TSA Awareness, and health and safety,” Jetha says.
CAS also uses what it calls its ‘HEART’ app, which gives every employee a fast and easy way to communicate with the business, such as sharing their ideas for operational efficiencies or reporting anything unsafe or suspicious.
New technology to improve the quality of cargo operations is also used. This includes ePic, which is a cargo management system that automates a lot of the processes that were once manual and time-consuming. Flight data, tracking, payment, discrepancies and more are available online to everyone in the cargo handling chain and each stage of the cargo ‘lifecycle’ is managed through a proprietary system that consists of three key elements.
The ePic Messaging Engine transmits incoming airline flight data via IATA messaging to the ePic Customer Service Portal and the ePic Mobile Warehouse Management System. The Customer Service Portal enables forwarders and brokers to manage, track and reconcile their shipments online and saves them having to make countless phone calls – wasting time that they can instead spend more productively on other areas of the business.
CAS is now taking this a step further with the launch this fall of ePic Easy Export, its new web-based e-AWB tool. For the 3,000 freight forwarders using CAS’ current ePic Online Customer Service Portal, ePic Easy Export will deliver the long-awaited community tool companies need to make an easy transition to e-AWB and eliminate the heavy dependency on paper documentation for the exchange of information, Jetha says. Currently, each international airfreight shipment can require more than 30 different paper documents.
IATA revamped its Cargo 2000 (C2K) air freight quality initiative during 2015, culminating with the appointment of Ariaen Zimmerman as executive director in September. He reports that C2K held one of its busiest Technical Workgroup meetings ever this fall, with more than 60 representatives of forwarders, airlines, ground handlers and IT providers talking about ways to improve C2K’s impact on the industry. Zimmerman notes that while C2K is a unique platform and has achieved much, there is still work to be done.
“Although roughly half of the world’s air cargo volume is now managed, measured and controlled through Cargo 2000 processes and systems, we are working on the next steps,” Zimmerman says. “We aim to be more scalable in our processes, so we can better serve smaller market parties and stations. The airport-to-airport process has come from development into a mature process and we are working on getting to the same level with the specifications and processes for door-to-door, in parallel with the implementation of the Cargo 2000 methodology on a piece level rather than a shipment level.”