The smart facility

posted on 11th September 2018

With TIACA this year launching a cargo terminal assessment tool, and IATA continuing to develop its handling facility audit standardisation initiative, Will Waters examines their respective aims, functions, and progress

 

The air freight sector spends thousands of hours each year on facility quality audits, with each carrier currently performing them individually in order to ensure operating standards match agreed service levels.
With an estimated three quarters of airline cargo handling outsourced, and with many airlines auditing their major outsourced handling partners every two years, the burden on carriers and facility operators of performing these audits is enormous. Many cargo handlers, each of which may represent dozens of carriers at a single facility, end up dedicating huge levels of resources to almost year-round audit support. And when you consider that a large portion of each audit is very similar, the current system is not just time-consuming, it is also highly inefficient, notes Brendan Sullivan, head of cargo operations at IATA. Indeed, IATA estimates that in one audit cycle, 243,000 airline ‘man days’ or ‘person days’ are spent auditing cargo facilities, in most cases duplicating and triplicating the effort.
IATA was, therefore, asked several years ago to address this issue, with the then Cargo Operations Advisory Group (COAG) taking on the task of creating a so-called ‘Facility Capabilities Matrix’ to standardise audits of air cargo handling facilities. Since upgraded and renamed to become the IATA Cargo Handling Council (ICHC), this group has continued working on the project, which has become part of IATA’s wider Simplifying the Business Cargo (StB Cargo) initiative. Also subsequently renamed, the ‘Smart Facility’ project aims at developing an operational capacity audit and accreditation scheme for cargo handlers, airlines, and other cargo facility operators, with the goal to reduce redundant industry audits by 50%.
Under the programme, a Smart Facility Operational Capacity (SFOC) audit will assess a facility’s infrastructure, equipment and the procedures to operate them in accordance with IATA Regulations and Recommended Practices. Its main goal is to create transparency in cargo handling services and to enhance basic cargo operations capacities to a consistently higher baseline level across the industry, IATA says.
Sullivan says the programme has developed a comprehensive standard checklist for assessing cargo facilities, has been endorsed by the Cargo Services Conference, and is now an industry Recommended Practice “that benefits all supply chain partners by facilitating measurement against high-quality industry-agreed standards”. This will provide visibility as to a facility’s operational capacity as well as on compliance with safety and security regulations, he says.
“It is expected that a reduction of audit requirements on ground handlers will be achieved through adoptive recognition, leading to a decrease in Service Level Agreement (SLA) Adherence Audit costs and redundancy,” Sullivan explains. “The programme aims to reduce the current industry operational audit burden on each GHA by roughly 50%; there will then be an equivalent time saving for each carrier.”

Complementary frameworks
Sullivan says the Smart Facility programme will coexist and is complementary to the existing framework for audits and assessments such as the IATA Operational Safety Audit (IOSA), IATA Safety Audit for Ground Operations (ISAGO), CEIV and Cargo iQ, “matching customers’ needs to service performed; allowing benchmarking against defined industry standards; identification of gaps in own processes or facilities; transparency on services offered; and, finally, improved quality”.
He adds: “For example, the Smart Facility audit will focus on a cargo terminal’s general capacity for handling cargo in terms of what capabilities and specific facilities it has in place. IATA’s CEIV programme, on the other hand, is a comprehensive audit certification programme as to specific product handling expertise, such as Pharma − or Live Animals and perhaps ‘Fresh’ (perishables) products in future − looking at tools, industry and regulatory compliance, handling processes, training, and commitment to excellence.”
Sullivan says IATA is not in a position to make comparisons or comment specifically on the recent Cargo Service Quality (CSQ) initiative by Tiaca, which IATA believes is “about assessing the user experience having used an airport or cargo terminal”. However, he notes: “In general terms, we support all initiatives which lead to improved industry quality.”

Progress report
As for progress with the Smart Facility programme, Sullivan says: “We are now in the industry adoption phase. We have launched an audit programme that will track towards the (stated) objectives and benefits. We are also developing a publishing platform which would allow facilities − cargo warehouses − to publish their capabilities and have them verified through our programme as having met the defined standards. In this regard, we have already pilot tested with a number of airline-GHA pairings, and are now testing the independent audit process, gathering feedback prior to the official go-live later in the year.
“We’ve recently completed a successful pilot with Hactl, with more on the way.”
These initial pilot tests with airline-GHA pairings were done as part of the standards setting activity, involving ICHC members.
“These first rounds of pilots − in reality more proof of concept and industry research − helped us to get to a viable standard endorsed by the industry (it’s a ‘Recommended Practice’ now) and form the structure of the Smart Facility programme as we worked through the various pain points the GHAs and airlines have in relation to visibility of the various capabilities cargo facilities have and audit complexity and redundancy.
Sullivan says the Smart Facility programme is already live, in that the standard is endorsed and can be used by industry. “Many parties have already implemented it as a method for self-assessing their capabilities,” he notes. “So the go-live is a phased approach that started with the standards, then later this year, the audit and validation process and publishing platform.”