Optimising the end-to-end journey

posted on 25th April 2018

Leading air freight executives from across the sector identify recent progress, opportunities and priorities for further streamlining the air logistics chain. Will Waters reports

One of the highlights for CAAS at IATA’s 2018 World Cargo Symposium in Dallas – albeit not quite matching the ‘rodeo bull-riding’ experience at the Gala Dinner − was the panel discussion ‘Optimising the end-to-end journey’. Leading air freight industry executives with different perspectives from across the sector debated recent progress and opportunities to further streamline the air logistics chain.
Key themes emerging included the role of airport communities, the value – or otherwise − of developing new standards, and better use of communication and data sharing to support slot-booking and operational scheduling initiatives that cut congestion, inefficiency, and wait times.
Christian Bergfelder, director of network, airside and airport affairs at DHL Express Europe, said he believed the sector had made “a lot of gains over the last couple of years” –highlighting progress made in e-air waybill use. “What is missing is the next step,” he observed, adding: “The IT is there, and we have looked at how we can streamline the operational experience through the different handling agents, the different stakeholders.”
Sara Van Gelder, cargo and logistics development manager at Brussels Airport Company, highlighted the potential of “a lot of local initiatives” among airport cargo communities. “We need to stimulate these local initiatives, and in the end those local initiatives will talk to each other. We don’t have to wait for more standards to be defined before we can change; just act locally and start changing stuff.”
Matthias Hurst, director for global airfreight initiatives at freight forwarding and logistics group Agility, questioned whether air freight discussions, developments and initiatives have been “as inclusive as we need to be”, often neglecting to involve the end customer and the full end-to-end process.
“From the forwarder’s perspective, we have to deal every day with what is happening from the side of the customer − the shipper and the consignee. We look ‘end to end’ and we talk ‘end to end’. So, I would like to see that we are focusing on the needs of the shipper, because ultimately those guys pay us, each of us. What do they need? What does the consignee want? The way we are currently tackling it is based on our needs in our own little silos.
“I think we need to be more conscious about involving customs processes, security, all those things; they are not really embedded in full view from end to end. But, the messaging and the collaboration, we need to embed that in something new, something end to end.”

Border efficiency report
Examining what kind of obstacles are preventing a smoother end-to-end journey, Laura Rodriguez, assistant manager for Cargo iQ, noted: “We are seeing protectionism increasing, and this obviously impacts on our industry in a big way. So, we have created a border efficiency report for the first time with 2017 data, trying to shed a little bit of light on what we see on the import processes. On average, it takes 1.4 days from the moment that the consignee is notified to come and pick up the shipment to the moment that they pick it up, and that is a gap where usually customs clearance takes place. It’s an approximation of what happens at import.”
This average of 1.4 days represents 25% of the total door-to-door journey time, she notes, highlighting “the importance of looking deeper into this process at what is actually happening in that gap. The results also shows variations in locations from 30 hours to 6 days, so also we can go in and see why the variation is so big.
“My intention is to be able to collaborate with organisations such as WCO, UNCTAD, WTO, the World Bank. We are already having discussions on ‘How do we play an active role in improving border efficiency’, which will have a big impact if we look at this 25%, in optimising the journey time.”
But what can be actionable? asked panel moderator Jessica Tyler, managing director for cargo culture and transformation at American Airlines.
Rodriguez responded: “We need to first look in more detail at what happens in that process, at the main problems causing the obstacles, and we can allocate the resources to those specific issues and, one at a time, begin improving that.”
She said Cargo iQ had also been looking at how to standardise customs procedures worldwide. “In every location it is different, in terms of what kind of documentation you need or how do you exchange the data, even. This slows down the processes and doesn’t allow us to optimise. If there is any kind of standardisation that can be done in that sense, that can be helpful.”
Bergfelder noted that with even the most efficient parts of the world only achieving average import collection times of at least one day. “A day, from a customs process point of view, is still a day too much,” he said. “If DHL Express had to work under those circumstances, we would never deliver the service we do.
“You can see huge differences in the different regions, and think this accounts some of the problems that we have when it comes to the customs authorities.” He noted that for “the classic routes where e-commerce is going back and forth”, such as Europe to the US and China, the collection timeframe are “fairly good, but there are certain regions that we need to work on”.

Needs of SMEs
Hurst stressed that any streamlining initiatives had to “consider that there are many small and medium-sized freight forwarders as well”, that need to be able to transmit data in a standardised way, so that “they don’t have to think about how they should do it if they want to ship to China or to the US. So, if we as an industry, come up with something, we also need to cater for this from a standards perspective.”
Van Gelder commented: “I do agree with that, but I think when we talk about data-sharing, it’s much easier to define standards; when you’re talking about digitising documents, we need to agree on the format and how the document looks, and everyone will be involved with handling its. So I think standardisation, thinking about messaging standards, etc., is the old way of thinking, and we need to start sharing on a data-element level, and then it will be easier to exchange.”
Hurst agreed, adding: “But the way you share also has to be defined, and we need to ensure that this works globally and in a standardised way, so that anybody in the process can rely on being able to pull out exactly the information that they need, wherever and whenever they need it, if they are authorised to use that information.”

Biggest opportunities
In terms of where else the industry’s biggest opportunities are for streamlining, Bergfelder said a lot of the cargo handling processes could be faster, questioning “the old way”, where, “this party offloads the aircraft, and then somebody else brings it over to the warehouse, and then when there’s time someone is picking it up and breaking down the ULD”. He was optimistic about “a lot of local initiatives in place, Brussels, Amsterdam, Frankfurt trying to work with lots systems and engaging with the freight forwarder – who is delivering the cargo”. He adds: “We often talk about how every freight forwarder wants to deliver on a Friday afternoon, latest Saturday morning, because everyone goes on the weekend, and that brings up the congestion, and so I think there is a lot more that we can do.”
That should include better use of the digital information created or made available during the air freight booking. “Still we are not using that and making it more efficient when somebody books something and says: ‘I am going to deliver in that timeframe’.

Van Gelder said this was a key element of the cloud-based community data-sharing platform Brussels has been working on. “At the moment, many people are involved, and they are having one-on-one data exchanges,” she noted. “So what we did with the cloud is make it possible for stakeholders to connect once to the data-sharing platform of their community, and from there on the data-sharing is taken care of − with correct rules and safety, where they can define who the data is shared with”.
But she stressed that nobody is going to share data for the sake of data sharing. “We need to see an efficiency gain or something in it, and that’s where we try to define those use cases where a party from its individual perspective can never create so much added value; they need to collaborate on some topics, and delivering cargo or picking it up from ground handler facilities are a good example.
“That is also one of the applications we focus on – our slot-booking application, where the application will make the use of the data that is available in the data-sharing layer, but will also create an added value because we streamline the collaboration between the different stakeholders. So, the slot-booking application makes it possible to have a central window for time slots for pickup or delivery, independent of which freight forwarder and which ground handler, we have one central application where they can book a time slot, where the best match between supply and demand is made.”

Lower waiting times
She continued: “We went live on 15 January, and we see already that those freight forwarders who are booking timeslots can eliminate waiting times. And there are also training their customers, saying: ‘we have a timeslot of 6pm on Friday, and this is peak period, and so we need your shipment before then so that we can make our timeslot − because then the driver can eliminate five hours waiting times’.
“So, that is where we really see added value at this time. It’s the first step of course; we will need to reuse this data in other applications in the future to really streamline the end-to-end journey.”
Bergfelder agreed, adding: “Sometimes I think to make the whole process work, we need to tell the customer: ‘we can give you a lot of leeway, and we will give you the best service possible, but you need to work with us as well, because if you want to always have your shipments picked up as late as possible, and then it is thrown in, we can’t make that work, because then we get congestion and issues at all ends of the process.
“So, we also need about to think about how best to deal with these customers, and how to accommodate them. I believe the slot system is a very good way; we can’t all depart at the same time from the airport, and this helps us to fit with the schedules, and that way we can make the timings that we want − and that is why we don’t delay planes.”
Hurst said this was also “something going on from the Cargo IQ side”, noting: “We were promising the industry we will improve reliability and predictability, and solutions like those obviously help.”
Cargo IQ’s Rodriguez responded: “There is still a bit of risk reduction from the customer as well − where they are not sure if, for example, they need a shipment on Friday, they manage their risk by saying ‘I will asked for it on Wednesday and I will tender it before time, because of the lines’. And so I think this (booking timeslot system) is a big step in making the reliability of the product that we were talking about reality.”
She continued: “Another way we can use our data to make products more reliable is we can show our members, for each of the events that they’re measuring, how long it takes to process the shipment. So, for example, with this measure, it is 225 minutes to process 99% of their shipments.

Operational reality
“This not only gives them better planning, if they know exactly how long it takes for each shipment on a specific lane, then they can plan much better their resources, but also to give better visibility to their customer. And hopefully, eventually, be able to make sure that the operation for the products they are sending matches perfectly with the operational reality of the data.”
She says that although speed “is one of our advantages” as an air cargo product, “I also think there are many competitors out there now challenging us on the speed front; and with more and more technology coming up, this (competition) is only going to get worse. And the only way that we can survive if we are able to offer a broad range of different offers the customer needs, but in a reliable way, so that they don’t need to worry about trucking lines, etc. And we have the tools to do this; we have the IT providers, and we have a lot of data − it is just a matter of using it wisely.”
On whether we are measuring the right KPIs, Bergfelder commented: “We sometimes tend to not focus on the key points. What are my three key KPIs that are driving my processing time?”
He highlighted the “three-day timeframe” of cargo “left over the weekend”, identified last year, suggesting this is where to focus first. “Take one step after the other and look at what I can do there? That’s how we as an integrator do it.
And then evaluate what are the drivers? Where can we use that for improvement? That’s what data is for − to find a way to improve.”
Van Gelder commented: “I think we need to agree on what we measure, because otherwise we can’t compare with each other. I think it’s more about identifying where the pain points are.” But she doubted the value of questioning “where all the milestones of Cargo IQ are, because that will probably take another two years”.
Hurst responded: “I think what we’re doing (with Cargo iQ) is good. We might need to do some slight changes to cater for specific things, but it’s not like the whole MOP (master operating plan) is obsolete. You have a pickup, you have a delivery, and between you have a bunch of other things happening, and those things will not change.
“The only thing I would challenge is we learning enough?” he continued. “Are enough people contributing? If we put everything into one big pot and looked at everything, then we can see the whole world, and we can map it all out; we can pinpoint white spots where we don’t have data. As long as we have those blind spots all over the place, we don’t really gain a lot more traction. And this is why we need more people engaging, to open it up to a much wider level than it is now.”

Out-of-the-box
Bergfelder added: “Then we need to look more out-of-the-box. Digitalisation moves so fast, and that gives so many opportunities, but we need to be willing to think ‘what can we actually do differently’? How we are currently have this MOP mapped out, but isn’t it maybe time to review this, and take all the new opportunities we have? Isn’t that something we had better change?”
Rodriguez agreed, adding: “The thing is, the MOP is showing the standard of how we move cargo today. It’s supposed to be a live document that can be updated when the right standards come into play. I think there is an opportunity with technology to improve the way we do transport cargo, and of course we will adapt those into the MOP.”
She said there are different KPIs for different reasons, including some for internal process-improvement purposes. “Of course, we can add additional milestones and events that we want to measure, and it is all the better if we can measure more, but in the first stage a lot of these milestones are being measured manually, and so I think that would create a clutter of information that members need to gather. So, we need to think before doing that.”
Cargo iQ has also been speaking to the shipper community, “to look at which KPIs are important to them, and if we can incorporate them into our milestones”.
Hurst responded: “Maybe as an industry we also have two go and educate the shippers and the consignees a little bit, because when they talk about the events, they talk about ‘departure and arrival’. But everybody who works in the industry know that ‘departure and arrival’ doesn’t mean anything. So, we might need to explain that ‘there are so many things happening in between that would probably shift your perception of what is important’. Maybe that is something where we as an industry should step up.”

Innovation leaders
Asked about other examples of innovation or experiments or leaders the panelists are tracking, Bergfelder highlighted drones – for example help deliver in congested cities – and “how, through IT, can you deliver faster information about the shipment to a customs authority”? He said DHL is trying to map the customs pre-clearance and other processes used successfully on the express side of its business also for general cargo; “so in the end, depending on what service the customer wants and what timeframe there looking for, we’re going to be able to deliver that.”
Rodriguez said: “We have always tried to see we can learn from the integrators. Being able to handle small shipments is something that we are working on right now with the ‘piece-level task force’ in IATA, and that would allow us to give another level of service to customers − and also internally be able to have better shipment control, if we can handle shipments on a piece level.”
Van Gelder responded: “We need to collaborate, and that’s how we can change some things. I think collaboration is maybe 80% of the work that needs to be done, and 20% can be technology − the and technology is there. There are other industries where they are progressing much faster than we are.”
Hurst stressed the potential of IoT − “making cargo talk. It is happening, but it is not in the whole industry right now. But it only works with the collaboration of all the stakeholders, and that is end to end.”

IATA’s role
And what further role can IATA play in helping to optimise the end to end journey? Bergfelder responds: “IATA represents the airlines in the first place, but we need to get the freight forwarder associations more involved. They (IATA) have the power to get people around the table and define the standards that we talked about, to make the collaboration better, and change the way of thinking. We can only work that move that forward if we work together.”
Hurst stressed “getting rid of the fragmentation… If we look at current messaging and talk about data-sharing in the future, the way the messaging works nowadays is really fragmented. And if IATA doesn’t push for the members to get all on one standard, we will lose people along the way – for example, SME forwarders, but also other stakeholders. If we had one standard and this was really pushed, that would help facilitate many things, and will also improve collaboration.”
Rodriguez agreed, noting: “And there is an urgency to these standards, because these developments happen and nobody is going to stop them. So, if we have different technologies coming out, it is a challenge to bring them together and see how we manage all of them together, whereas if we have a standard built around them, this is much more seamless. Initiatives like ‘One record’, or a data depository, these things can really help our industry. But I think there is an urgency to this.”
Van Gelder also agreed, adding: “Bring together the different stakeholders, making them work together, collaborate, and stimulating the local initiatives, informing about technology, and in the end the standards can be needed – but we should not wait for the standard to start moving.”