LIRNEasia is a regional ICT policy and regulation think tank active across the Asia Pacific

In search of e-cargo (e refers to ‘end-to-end’)

Air cargo is all about moving goods faster over longer distances than any other mode of transport. The average end-to-end time for air cargo consignments is around 6-7 days, which is exactly what it was in the 1960s. Ocean shipping may take 30-40 days, but with a little pre-planning shippers can save a lot of money moving cargo by sea rather than air—and be reassured by ocean shipping’s improved reliability. Evidently, the air cargo industry has not moved as urgently toward automating documents as passenger airlines had migrated to e-ticketing process. Why is that?

A big reason air cargo moves so slowly is that the whole process continues to be extremely overburdened by paper in an e-commerce age. Air cargo often sits idle, or gets held up, because of paperwork. The air cargo industry is struggling to automate even the most basic piece of paper—the air waybill, which is roughly the equivalent of a passenger air ticket.

The air ticketing process is now almost entirely paperless. No so for air cargo, which achieved just 12% e-air waybill penetration in 2013, not even close to the global industry’s modest goal of achieving 20% penetration.

So, what’s the real problem with automating the air cargo system?

Part of the problem is that the air cargo industry—aside from the express operators—is made up of multiple players. Whereas the big integrated delivery companies—FedEx, UPS and DHL—largely handle their express packages end-to-end, traditional air cargo is passed from shippers to forwarders to ground handlers to airlines and back to forwarders again at the arrival airport. As a result, everyone seems reluctant to invest the necessary money to transform paper processing to e-processing.

It’s the same old story of a fragmented industry like telecoms. Read the full article.


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