Old habits die hard
The International Air Transport Association's e-freight initiative took several steps forward this spring.
The aviation industry group has made elimination of paper documents in the air cargo supply chain a priority. A physical shipment can generate up to 30 documents, and IATA wants to replace trade, transportation and customs documents such as paper packing lists, invoices, air waybills, and cargo declarations, with electronic versions to save money and improve efficiency.
By the end of 2009, 16 paper documents were replaced with electronic messages and four more are scheduled to be created in 2010. As of April, e-freight was available in 25 countries and 125 airports. IATA is working to add 21 countries, including China and Austria, to the e-freight pipeline by the end of this year.
The organization estimates a net industry benefit of $4.9 billion per year from use of electronic documents. It said the ability to send shipment documents before cargo arrival can shave a full day off transit times, reduce delays due to inaccurate or lost documents, and improve real-time shipment tracking.
E-freight helps forwarders tender shipments to airlines in a more accurate and timely fashion, said Jason Brockington, global manager of air freight information technology and applications for DHL, at the recent Cargo Network Services conference in Miami. 'If it's done right there's no need to touch it (the data) again.'
Electronic transmissions can also minimize penalties for late or inaccurate documentation required by government regulators, said Jim Edgecombe, cargo project manager for policy and procedure, at United Airlines Cargo.
Proponents say airlines and customers too often fall back on old habits of using paper for invoicing, accounting and claims even though the passenger airline industry has figured out how to be completely paperless in most transactions.
'Even in 2010, few airlines can take cargo bookings online, few can exchange data with external parties unless they operate the airline's own terminals, and virtually no forwarders outside the top 10 offer their shipper customers an online interface even for tracking, never mind booking,' Peter Weir, senior vice president for general sales agency Air Menzies International, wrote in a column published in the spring issue of Air Cargo Focus, a CNS publication.
'From shipper through agent to airline, the whole process of booking and managing an air freight shipment takes too long and costs too much,' he added.
Delta Air Lines is investing in a dedicated management team to ensure it implements e-freight this year, Neel Shah, vice president of cargo, said in a separate column.
The U.S. Department of Transportation recently approved a new electronic air waybill standard jointly developed by IATA and the International Federation of Freight Forwarders Associations. The updated standard removes the requirement for a paper air waybill. Three airlines and 11 freight forwarders were using the electronic air waybill as of April.
Also, the World Customs Organization signed a memorandum of understanding with IATA to encourage the implementation of e-freight. The WCO said e-freight promotes its standards for advance trade data, allows for more effective targeting of security screening, and allows customs organizations to better detect duty fraud.
IATA's goal is for all air cargo transactions to be electronic by the end of 2014.
Boeing jilts Evergreen
Evergreen International Airlines in late March filed a $175 million lawsuit against Boeing Co. for allegedly breaching a contract to operate four specially modified, oversize freighters that the manufacturer is using to shuttle large aircraft sections for the new 787 Dreamliner from global suppliers to its assembly plant in Washington.
On March 4, Atlas Worldwide announced Boeing had outsourced operation, ground crewing and maintenance of its Dreamlifter fleet to the Purchase, N.Y., air cargo specialist for nine years. The four large cargo aircraft are Boeing 747-400s with an enlarged upper fuselage.
McMinnville, Ore.-based Evergreen won a contract in 2005 to fly the converted super-freighters for Boeing. The initial five-year contract was to automatically renew for another five years (plus two more five-year options) except in certain specific circumstances, but instead will expire later this year after Boeing dumped Evergreen for Atlas.
In its federal suit, reported by Seattle media outlets, Evergreen charged that Boeing switched the contract as compensation to offset a $1 billion liability for late delivery of a dozen 747-8 extended freighters on order with Atlas.
Boeing's two-year production delay for the 787 also hurt Evergreen because it was only paid for actual flying time. The suit covers what Evergreen said is considerable expense to maintain the plane's readiness and anticipated profits.
Evergreen said either company could cancel the contract, but it assumed that absent poor performance it would retain the contract for 20 years.
The heavy lift cargo operator also said Boeing violated confidentiality agreements by handing over proprietary information about the Dreamlifter operation to Atlas.
Boeing's move might be cheesy, but it appears to have been within its rights to utilize an opt-out clause in its contract with Evergreen.
JAL continues restructuring
A Tokyo court handling the bankruptcy process for Japan Airlines has extended until Aug. 31 the due date for which the company must file a reorganization plan.
The airline said it needed the extra time to implement further cost-cutting measures and carefully review its flight operations and asset needs. The airline has considerably shrunk its operations during the past nine months and has decided to shut down its freighter fleet at the end of the year.
Cargo Facts, a newsletter published by Air Cargo Management Group, said in its April issue that JAL is expected to retire its 37 747-400s earlier than previously planned, as part of its downsizing. That could provide a large supply of aircraft for the freighter conversion industry, it noted. Reports continue to circulate that JAL may consider abandoning its European service and focus on more profitable intra-Asia routes.
If JAL abandons intercontinental passenger service it would open up even more cargo business for other carriers, the newsletter noted.