Air Cargo Management

Navigating the shift to digital

Henk Mulder Head, digital cargo, IATA
photo_camera Henk Mulder, head - digital cargo, IATA

The air transport industry has worked on the digitisation of documents since the last century. For Air Cargo Management, IATA’s Henk Mulder explores how processes and technologies have evolved over time to increase efficiency, transparency, and accessibility in cargo transportation

The evolution of digital documentation

The journey of air cargo electronic data exchange began with the Electronic Document Interchange (EDI) in the 1970s, giving rise to Cargo IMP and eventually, from 2005, Cargo XML. The primary focus during this e-freight era was the electronic Air Waybill (eAWB). While the uptake was slow at first, by 2022 more than 80 per cent of all air shipments were accompanied by an eAWB.

However, traditional electronic documents have inherent limitations. One of the biggest issues is data duplication – information such as shipper and consignee details, origins and destinations are replicated across multiple documents. This redundancy not only leads to inefficiencies but also increases the risk of errors, making electronic documents less reliable for data-driven applications.

In response to these challenges, IATA and its members initiated the development of ONE Record. This paradigm-shifting approach pivots from document-based data exchange to a data-centric model, where each transport stakeholder shares pertinent data via APIs with others entitled to access it. This innovative method enhances transparency and accuracy while opening up new avenues for process efficiency and business innovation.

Enhancing transparency: implementation of advanced tracking systems

Freight tracking is vital for everyone in the transport sector. Digitising documents and processes, along with freight status updates, forms the first step in achieving this. While sufficient for many types of cargo, detailed monitoring is required for certain goods like pharmaceuticals, perishables, live animals and luxury items.

For such cargo, tracking devices – which are becoming increasingly common and required – can greatly improve operations, ensure appropriate conditions during transit, and allow rapid intervention if anomalies arise.

However, these devices have inherent risks of interfering with aircraft electronics due to radio signals, and their lithium batteries are subject to dangerous goods regulations. Airlines need to thoroughly test and approve these devices before their use. IATA’s Interactive Cargo programme streamlines device approvals to speed up this process, and plans to release a directory of approved devices, sorted by airline and aircraft type, for convenience.

Transforming efficiency: automation and AI in operations

Though airlines and supply partners have achieved significant automation in operations, more efficiencies await. IATA’s ONE Record data standard provides data access throughout the supply chain, enabling innovation. Just imagine what unlimited data could mean: full transparency and a paperless environment, enhanced quality and efficiency, and new insights and business models.

The rise of AI since 2022 is rapidly altering our society. ONE Record data sharing coupled with AI offers potent possibilities, such as interacting with our freight about specifics like, “Where is my Steinway? If it can’t make it to Shanghai Concert Hall by Friday, what alternate transport can I find?” Or “Suggest top of the range rental options and quotes”.

Adding filters like “Only include quotes from forwarders and airlines with dedicated piano service and less than 0.5 per cent claims record” would incentivise data sharing among stakeholders. The air cargo world is on the cusp of this new reality.

Seamless interactions: integration of systems

Establishing interoperability among various systems, including airlines, ground handlers, shippers, and customs authorities, is vital. This interconnectedness enables real-time data sharing and collaboration, boosting the speed and efficiency of air cargo operations.

While traditional integrations are typically intricate, slow, and expensive, technologies like ONE Record data sharing simplifies this process. It aids in both external and internal system integration. Once systems are equipped with ONE Record, integration becomes seamless, positioning ONE Record as a cargo data highway.

Introducing artificial intelligence (AI) to this mix overcomes the issue of incompatible data formats found in older systems. Machine Learning (ML) that underlies AI can be trained to understand any technical or air cargo data dialect needed, serving as a system-to-system interpreter. This development is truly transformative.

Securing the future: investment in cyber-security

While new standards and technologies hold immense potential, they also pose challenges. With growing digitalisation, it is essential to fortify cyber-security efforts, including secure databases, data encryption, and regular cyber-security audits. Customer and partner trust is crucial to this digital evolution.

As we augment data and connectivity in air cargo transport, we inadvertently increase our cyber-crime vulnerability. Cyber criminals, armed with sophisticated technology, present a constant threat. However, we can learn from the financial sector’s robust cyber-security strategies. It’s vital that cargo managers and digital teams are trained to adopt effective cyber-security measures today.

Adapting to change: emphasising workforce training and adaptation

It would be natural to expect that digital natives would disrupt the lower tech aspects of the air cargo industry. However, rapid digitalisation, driven by AI and social media tech, is altering this perception. Digital skills are now essential for all, regardless of age or experience. Addressing this, companies must implement multifaceted learning and development programmes that focus on the digital economy.

One such interesting example of this is the IATA’s ONE Record Hackathons. These two-day events, organised twice a year around the world, immerse participants in new technologies and innovation, encouraging problem solving and networking. They generate new solutions, career opportunities, and branding while promoting digital literacy across the workforce. The next hackathon is in Doha on 24-26 November.

Navigating the digital landscape: regulatory compliance

Digitalisation’s influence on our industry has led to the emergence of regulations governing data exchange across various aspects of business, including goods, intellectual property and identities.
Examples of these regulations include data protection guidelines such as the EU’s GDPR and the US’s CCPA, as well as cyber-security compliance requirements by the Federal Trade Commission.
Customs regulations such as the EU’s ICS2 have also impacted the air cargo industry, while the handling of certain items, such as lithium batteries, must adhere to strict dangerous goods regulations.

Secure digital record keeping is enforced in many jurisdictions, ensuring easy retrieval and tamper-proof storage of digital records for specific periods. Additionally, digital platforms must increasingly comply with accessibility guidelines like WCAG to ensure accessibility for all users.

Overcoming the hurdles: challenges to digitisation

Handling the global supply chain is complex, turning freight movement into a continual operational challenge, often allowing little room for extra tasks. There have been continuous improvements over time, yet significant changes are often gradual and costly. Digitalisation is one such pivotal shift. Despite the known benefits, the temptation to delay implementation is common.

Introducing improved digital systems, AI, and new standards such as ONE Record can be financially and technically difficult, particularly for smaller operators with limited resources. This ‘digital divide’ may leave smaller or less tech-savvy operators behind as wealthier, tech-advanced firms advance.

As a result, these operators might find it more cost-efficient to use third‑party solution providers for technology implementations. IT solution providers and the air cargo industry are joined at the hip when it comes to digital innovation.

Driving the change: the role of IATA in digitalisation

IATA is committed to understanding and addressing air transport industry challenges, alongside its members. Despite occasional sluggish progress due to the magnitude of our industry, it is also known for digital innovation. Responding to our members’ requests, we’ve set a goal: by 1 January 2026, every airline must be equipped for data exchange via ONE Record.

Some think this is too hard, while others urge acceleration. These deadlines, while challenging, drive necessary reform. It is uncommon to find air cargo personnel who regret existing digital advancements or wish we had moved slower. Adopting ONE Record goes beyond a deadline; it is about fostering a more efficient future in air transport.

Join us in transforming the air cargo industry. Participate in the IATA ONE Record Hackathon, attend flagship events like the World Cargo Symposium and Digital Cargo Conference, or join our working groups to drive change. Together, let’s create an efficient, transparent and secure future for air cargo operations. Be part of this digital transformation journey now.

This article was first published in Air Cargo Management – August/September 2023. To read the magazine in full, click here.

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