International Air Cargo Association sets a visionary goal of 100% e-AWB by 2022
When cargo is transported through the air, a lot of information also flies with the cargo. But, the global air cargo industry still heavily relies on paper for transferring information which makes the air cargo supply chain prone to loopholes in the data flow, incomplete coverage and lack of common data standards. The International Air Transport Association is making earnest efforts to implement e-AWB to promote digitalization in the air cargo industry and make it fully reliant on the paperless process and smart data sharing.
Papers have always been a crucial part of the operational process of any industry, especially when it comes to clearances. Air cargo industry is also not an exception to it but the requirement of too many papers makes the situation bizarre in the current digital age.
Manual handling of papers not only slows down the air cargo supply chain but also increases carbon footprint in the environment. While enterprises are expected to discourage and control paper usage, an integrated effort from the government is also lack lustrous in India.
The international air cargo industry is aiming to cut down on the paper trail and even the IATA (International Air Transport Association) has mandated e-AWB years ago, but the true implementation is yet to been seen when it comes to getting rid of the pouch and making it a real e-AWB compliant industry.
Presently, e-AWB is authorized only on feasible trade lanes. However, paper AWB bill might be required by local authorities even within the right regulatory framework.
WHAT IS e-AWB?
e-AWB takes the paper out of the air cargo supply chain and replaces it with cheaper, more accurate and more reliable electronic messaging.
WHY e-AWB?
- Lower costs: Billions in saving for the air cargo industry. Faster supply chain transit times: Ability to send shipment documentation before the cargo itself can reduce the industry cycle times.
- Greater accuracy: Allowing electronic data entry at point of origin until RCS reduces delays to shipments due to inaccurate or inconsistent data entry.
- Regulatory compliance: e-AWB meets all international and local regulations relating to provision of electronic documents and data required by customs, civil aviation and other regulatory authorities.
- Increased security: Electronic documents are only made available to parties who require them for the completion of a shipment.
According to IATA, more than 50% of the global air trade relies on paper-based processes. A shipment can generate up to 30 paper documents and many of the processes, such as track & trace, still depend on human intervention.
Each year, more than 7,800 tons of paper documents are processed, the equivalent of 80 Boeing 747 freighters filled with paper.
In December 2017, the association said, the global e-AWB penetration reached 52.6% on the feasible trade lanes. Still, it fell short of 9.4% against the industry target of 62%. As per its status in March 2019, the global e-AWB penetration reached 61.3% on the legally feasible trade lanes. The ultimate milestone for e-AWB set by IATA is 100% penetration by the year 2022.
Where are the hiccups in achieving 100% e-AWB penetration?
- Regulatory constraints: Implementation of e-AWB is not possible in all airports and all trade lanes due to regulatory limitations.
- Lack of harmonisation: Procedures of e-AWB are not harmonised among freight forwarders, airlines and ground handling agents in key airports where e-AWB is live.
- Technology limitation: Many of the SME forwarders do not have the technical capability/ EDI enabled systems to enable them to transmit shipment data to airlines. Even some large forwarders also face the same issue.
- Complex process: Forwarders dealing with multiple airlines face complexity in e-AWB procedures.
- Maturity threshold: Some markets have reached a certain level of maturity where major actors (airlines/freight forwarders) have already achieved the biggest potential but some markets are still lagging behind in the race.
Air cargo industry veteran, Bharat J Thakkar, Co-founder and JMD, Zeus Air Services Pvt Ltd & Past President & Permanent Adviser to Board – ACAAI is optimistic on digitalization of the industry and said, “In India, about 72.9% of the air cargo supply chains are e-AWB compliant only second to China and the technology adoption will bolster the digitalisation initiatives of the industry.”
On similar lines, Samir J Shah, Owner, JBS Group of Companies said, “The usage of documents has reduced considerably in recent years. The endeavour is to reduce it further. The need is also to reduce the number of copies of each document required.
“The stakeholders are all working towards the same and the acceptance of technology is high in the air cargo segment.”
The Logistics and Supply chain industry is enterprisingly transforming with new innovations aided by technology combating the old and tested models. Ashish Asaf, CEO & MD, SA Consultants & Forwarders adds, “The operational and ground handling processes of air cargo should have been
equally dynamic. We still face several hiccups causing toiling delays due to the manual workflows and the fragmented services gateways.”
If we compare it with air travel sector that has been digitalised almost since
a decade back, air cargo still lags far. Paperwork, queues, multiple points of contacts and validations, scattered services, and so on are some of the concerns that still exist sadly.
“Along with digitalisation, integration of the stakeholders is the need of the hour. All entities of air cargo like the shippers, inland transporters, warehouse operators, freight forwarders, customs brokers, ground handling custodians, airlines, importers must be fused together through
technology. We require more single-window solutions and united gateways for the impeccable movement of cross-border trade,” said Mr Asaf.
Prithviraj Chug, Director, Group Concorde agrees that digitalization is happening at a rapid pace.
He added, “More and more airlines are trying to develop air cargo community systems which can bring together all the different players whether it’s customs, agents, shippers or airlines on a common platform for efficient processes. Presently, a digital ecosystem is clearly missing, however, a lot of companies are trying to create the ecosystem. Once such an ecosystem will come in place paperwork will reduce considerably.”
The industry experts hold the view that it is not only the logistics companies but also the freight forwarders who are still reluctant to move on electronic platform as it is helping them in earning additional revenue.
Vikash Khatri, Founder, Aviral Consulting said, “Due to nature of service and involvement of multiple agencies, air cargo operations pass through requirement of heavy paperwork. However, in the era of digitalisation, operations can be made paperless and efficient.”
He also suggested a way out. He said, “One of the effective tools can be the adoption of Blockchain technology wherein multiple stakeholders can be bought on a single distributed ledger. The process requires the involvement of all stakeholders like terminal operator, aircraft carriers, CHA, freight forwarders, consignors, consignees and government agencies like customs.”
Some airliners are making exemplary efforts in this direction. One of the airlines, Cathay Pacific is pioneering in implementing technology for cargo handling processes.
Air Cargo Industry resorting To Emerging Technologies
The company is using the latest Blockchain technology for storing movements and transactions from its unit load devices. Maintaining the digital record of the devices helps to create a more efficient model of transporting these containers during peak demand times. Cathay Pacific is aiming to completely eliminate papers in its processes.
“Indian air cargo industry has also witnessed transformation in the past; current processes are more efficient than past, although it still lags behind
on various parameters. Digitalisation has taken place not only from the service user side but also from the government side. But on various counts approach seems to be compartmentalized and lack a seamless approach. Any break in continuous information flow creates a bottleneck for efficient operations,” said Mr Khatri.
India’s proposition in National Air Cargo Policy Outline-2019 is to increase process transparency whilst decreasing shipment delays, costs and dwell time of cargo.
The policy aims implementation of fully automated paperless trade environment with minimum face to face interactions in a process.
Step involved in the process of trade from pre-arrival processing/ shipper’s gate to clearance and out of charge/consignee’s door is to be actioned through a digital platform. The process is to avoid the submission of paper documents and to not rely on physical signatures. Payments, communication, exchange of information etc. to all occur digitally.
Experts’ Take on the Current Situation:
“In India, about 72.9% of air cargo supply chains are e-AWB compliant only second to China and the technology adoption will bolster the digitalisation initiatives of the industry”
Bharat J Thakkar, Co-founder and JMD, Zeus Air Services
“The usage of number of documents has reduced considerably in recent years. The endeavour is to reduce it further. All the stakeholders are working towards the same and the acceptance of technology is high in the air cargo segment.”
Samir J Shah, Owner, JBS Group of Companies
“Along with digitalization, integration of stakeholders is the need of the hour. All the players of supply chain must be connected through technology. We require more single-window solutions and united gateways for the impeccable movement of cross-border trade.”
Ashish Asaf, CEO and MD, SA Consultants and Forwarders
“One of the effective tools can be the adoption of blockchain technology wherein multiple stakeholders can be brought on a single distributed ledger. The process will require the involvement of all stakeholders of air cargo supply chain.”
Vikash Khatri, Founder, Aviral Consulting
“Presently, a digital ecosystem is missing, however, a lot of companies are trying to create the ecosystem. Once such an ecosystem will come in place paperwork will reduce considerably.”
Prithviraj Chug, Director, Group Concorde
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