Efforts by the International Air Transportation Association (IATA) to eliminate paper documents are at least four years old, with similar initiatives going back decades. In fact, all transportation modes have been gradually swapping out paper in favor of electronic transmissions. But the airfreight industry seems uniquely slow in its progress toward that goal.
In a sense, we’re already there. On March 1 of this year, 15 air carriers implemented the eAWB, an electronic contract of carriage between shippers and carriers. Officially, that was the date on which it became the preferred method of shipping cargo to all destinations.
Hold your applause, though. The industry is far from fully adopting the eAWB. Targets for achieving that goal have been repeatedly missed. In 2015, IATA was aiming for 45-percent global penetration of eAWBs by the end of year. It got 37 percent. And the original target of 80 percent for 2016 has been scaled back to 56 percent.
On paper – excuse the figure of speech – it should be an easy sell. The eAWB is expected to yield multiple benefits for the industry, including lower costs related to printing and archiving paper waybills, higher productivity due to the elimination of repeated data keying and real-time access to waybill data, fewer lost documents and errors, and improved regulatory compliance. What’s more, notes IATA, the eAWB paves the way toward a world of “paper-free air cargo.”
So what’s not to like? Jim Alemany, director of logistics execution solutions with Descartes, blames foot-dragging by freight forwarders. “It isn’t always easy to translate those benefits to the forwarders’ side,” he says. “Those are somewhat ephemeral at times, when there’s a dollars-and-cents mandate.”
It’s not as if adoption of the eAWB entails a big upfront cost for forwarders. The supporting I.T. applications are “extremely accessible and affordable,” says Alemany. He suspects that the reluctance by some forwarders is in part a generational problem. Some of them still “don’t want to let go of their paper.”
Certain carriers are also balking, although the major ones, serving what IATA calls “feasible lanes,” are mostly on board. Again, though, we appear to be witnessing the drag of tradition and inertia.
Interestingly, some smaller carriers serving Africa are achieving a higher penetration of eAWBs than their larger counterparts, Alemany notes. “They’re newer,” he explains, “so their technology platforms are, too.”
As for the laggards in the carrier space, Alemany cites issues related to the need for back-office I.T. upgrades. “Everybody’s pointed in the right direction,” he says, “but it’s not always that easy to get across the finish line.”
Another reason for the slow adoption of eAWB in some quarters could be an aversion to traditional electronic data interchange (EDI), which can be daunting to newcomers. Most EDI messages related to air-freight data and documentation currently move under the EDI-based Cargo Interchange Message Procedure (Cargo-IMP) standard, developed by IATA and the airlines. Now, industry is slowly migrating to the newer Cargo XML (Extensible Markup Language) standard, which is easier to use and better suited to real-time communications over the internet. “XML is the future,” says Alemany. And that trend could make the eAWB more attractive to the holdouts.
Eventually, they’ll have no choice. The irreversible direction of most transportation-oriented business processes is automation. Similar progress, if more advanced, can be seen in the trade-regulation arena, where the coming of the Automated Commercial Environment of U.S. Customs and Border Protection will allow importers to reach 48 government agencies with a single electronic filing. More automation is coming for air cargo as well, in the form of electronic bookings and the Consignment Safety Declaration (eCSD).
In the meantime, IATA and its members are doing everything they can to promote automation and the benefits it will bring to carriers, shippers and forwarders alike. (Which is why purveyors of the eAWB have taken pains to hide the “print” button from old-line forwarders.) For his part, Alemany is optimistic that industry will fall into line. “In several years,” he says, “we won’t be having this conversation.”
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