Tag Archives: Digitalisation

What the industry can learn from BRUcloud, the open community technology platform used at Brussels airport

Could a new app be a taste of the way our industry uses technology in the future?

 

Brussels airport has already had a great deal of success with its BRUcloud open community platform in recent years – and it seems that freight forwarders at the airport are now embracing the cutting edge data-sharing technology to develop new solutions to old problems.

 

Industry backing

The Customs Export Application was strongly supported by Air Cargo Belgium (ACB) – who represent the country’s air cargo community – and with the advantages it delivers it’s clear to see why the technology has been given the industry body’s backing. The app matches collected manifest data (both from the freight forwarders themselves and existing data that is available within the BRUcloud system) and then automatically reports complete and accurate information to customs. The new technology saves time on all sides – particularly in terms of the amount of time processing air waybills. Customs have also agreed to clear shipments handled via the app first, providing yet another opportunity to speed up processes for all stakeholders.

 

A shared approach

A real key to the success of the app has been the collaborative approach taken by all parties – both in terms of the development of the Customs Export Application and its subsequent roll out.

 

“This collaboratively created app results in a lower administrative burden for all the parties,” says Bart Vleugels, who is advisory general at the Federal Public Service of Finance, Customs and Excise Duties. “Digitization within BRUcargo will further lower the chances of errors and will help to drastically decrease lead times.”

 

Freight forwarders have certainly bought in to the new technology, with 90 per cent of the air freight passing through BRUcargo now using the app.

 

Industry best practice

Ignazio Coraci comments: “The industry can learn a huge amount from the great work done at BRUcargo, not just in terms of the technology itself and its application, but also in the collaborative approach taken to its development by everyone involved. This kind of open cooperation between stakeholders is a model for similar projects.”

Hong Kong sees a surge in growth for first half of 2017

It has been a truly impressive start to the year for Hong Kong International Airport (HKIA), with growth in traffic right across the board. In terms of air cargo business, HKIA has handled an impressive 2.3 million tonnes of cargo already this year in the first six months to June – that’s up a remarkable 11.3% on the same period last year.

Booming exports

So what has been behind HKIA’s great start to the year – and more importantly, do the experts think it will be sustained? Well, in the latest figures from June, 410,000 tonnes of cargo passed through the airport, up 11.4% on 2016 – and there are indications that a 17% year-on-year increase in June exports from the airport led to the high growth in cargo tonnage for that period. That bump in export figures has certainly contributed then to the airport’s positive performance in the first half of 2017, but HKIA has also benefited from an improved global outlook. And with the Asian markets leading the way in air cargo growth, HKIA is in prime position to take advantage of a global economic performance that is looking positive in terms of consumer and business confidence.

Investing for the future

HKIA isn’t standing still, with work starting last August on a third runway to help accommodate future growth. The airport is also making further investments to ensure it meets the needs of customers.

“On the cargo front, HKIA continues to develop its ability to serve fast-growing segments of the high-value cargo business, such as fresh produce and temperature-sensitive pharmaceuticals that require specialised handling,” says an airport spokesperson. “The airport authority and local industry stakeholders are working closely together to pursue the IATA Centre of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) accreditation on airport community basis and HKIA is expected to be recognised as an IATA CEIV Pharma Partner Airport by the third quarter in 2017.”

A sustainable future

Ignazio Coraci comments: “Clearly Hong Kong is an important site for both our ASC Cargo and SW Italia businesses, and so the news that air freight handling is continuing to grow there is great to hear. I’m also really encouraged by the investment in infrastructure that is being made at HKIA – it will go a long way towards making sure that the performance we’ve seen so far this year is sustained.”

Is blockchain technology the answer for air freight?

We’ve talked in this blog before about the need for the air cargo industry to begin to move away from the paper-based systems that so often clog up many of our processes. As our customers become accustomed to services that deliver more responsive, flexible solutions and with the higher service expectations that have grown out of the increasing use of mobile technology, we need to respond quickly.

First steps

The International Air Transport Association (IATA) have already made a number of steps towards doing this, not least through their support of the e-freight digital process transformation programme.

“Our customers are telling us that they expect more,” said Alexandre de Juniac, IATA’s Director General and CEO. “Complicated and convoluted paper-based processes that are basically unchanged from the 16th century are still being used in air cargo today. Our customers pay a premium to ship by air and they rightly expect modern processes and high quality services.

“Shippers today want responsive services based on intelligent systems able to self-monitor, send real-time alerts and respond to deviation. Technologically speaking, this is totally possible. The key to this and other innovations is using data efficiently and effectively. Finding solutions to unfulfilled (or even unrealized) expectations creates value for customers. And that propels a business forward.”

Is blockchain the answer?

Blockchain is often talked about as being just the kind of innovative technology that supports these aims. But what is it, and how can it be assimilated successfully into the processes and systems of a 21st century air cargo industry?

Well, simply put blockchain technology uses a shared digital ledger to record transactions across a number of computers. The advantages for users are that everyone can see any changes made to public blockchains, creating a more transparent process. Every single transaction made on a blockchain is also immutable – so it cannot be altered or deleted by anyone. A blockchain also creates a single ledger, seen by everyone, that any new transactions are added to – cutting down on any complications and removing the need for lots of different ledgers.

Air freight applications

So what would this potentially look like in an air freight operation? Using blockchain technology within this context creates a cloud-based system that is essentially more secure way of recording shipments. And because of the way that blockchain technology works, it’s also secure from hacking – as well as being a permanent record of transitions that is shareable between multiple users.

While blockchain has yet to really be tested thoroughly within an air cargo setting, it’s already made an impact with marine shippers. Here’s what Jody Cleworth, CEO of British freight forwarder Marine Transport International Limited (MTI) has to say: “Blockchain has the ability to empower our industry into a true digital age,” he said. “The sheer volume of containers processed per year means that safely decentralizing the management of these containers will radically reduce the complexities of shipping.”

Time to invest

Ignazio Coraci comments: “Blockchain technology is precisely the sort of innovative solution to age-old problems that we should be applying within our own industry. It’s important that other sectors aren’t allowed to steal a march on the air freight industry by adopting innovations that will serve customers in a way that we can’t offer yet – the time to act is now.”

Is digitisation an opportunity – or a threat?

The air cargo industry has unfinished business when it comes to digitisation and the modernisation of its processes. That at least was the message from the International Air Transport Association’s (IATA) Director General and CEO, Alexandre de Juniac when he spoke at the IATA 73rd Annual General Meeting.

Time to move on

“Air cargo processes are stuck in another century. To ensure that air cargo is ready to benefit from the we need a major overhaul of industry processes,” he said. “The time is right for change. After several years of virtually no growth, air cargo demand is starting to pick up. We are also seeing new business opportunities with internet commerce and the global distribution of time and temperature sensitive cargo, especially pharmaceutical products.”

Customer first

The message then is clear – digitisation is essential in order to keep up with the rapidly transforming demands of customers, who expect a supply chain that is efficient, flexible and effective. A more customer-centric approach will see the development of an air cargo industry that will also be more responsive, with intelligent systems that are able to self-monitor, alert people in real time and respond to any changes in the delivery process.

The end for forwarders?

De Juniac’s vision is an exciting one then – and although it lays down a serious challenge to the industry to change, it seems to paint a picture of an air cargo industry that will thrive if it makes the investment in the necessary technology. But what are the implications of increased digitisation for freight forwarders? A recent article by McKinsey suggested that by 2025, 15 to 20% of air freight shipments will be booked directly by the shipper with the airline. Meanwhile one of those freight forwarders who may be looking at a potential drop off in work due to digitisation – Flexport – suggested in another article that “airlines are poised to bring freight consolidation in-house”. So does digitisation mean the end of the need for specialist freight forwarders?

An unlikely scenario

Not so fast, suggests Niall van de Wouw in the Loadstar. “Neither airlines nor shippers have the global capabilities to perform, for example, the customs activities that are required to move freight from one part of the globe to the next,” he says. “And I don’t see either building up these capabilities – and why would they? From the airlines’ perspective, it makes no sense to start competing with a client base that provides 80-85% of their revenue.”

Embrace technology

Ignazio Coraci comments: “The advantages of digitising and modernising our industry far outweigh any potential threats to individual operators within the industry. Any failure to move with the times – and to offer the kind of service customers now expect – is a far greater threat to everyone’s revenue streams than the latest technology.”