SEOUL — How can the airfreight industry knock down barriers and improve the supply chain?
That was the question addressed by an industry panel at the TIACA Air Cargo Forum in Seoul on Tuesday. Suggestions ranged from emulating the practices of integrators to accelerating the move to go paperless.
Jae-Dong Eum, Korean Air’s vice president cargo marketing, started off the discussion by rattling off a laundry list of challenges facing the industry such as modal competition and cost pressures.
“We receive high cost pressure from shippers, pushing us even stronger than before,” Eum said. “We also face regulatory issues and environmental issues. These result in extra costs for airlines.”
Essa Al-Saleh, CEO and president global integrated logistics for Agility Logistics, said he was concerned about the continuous pressure from shippers and carriers which cannot lower prices. The solution to these problems: find new opportunities and markets, he said.
“We need to improve productivity and we need increased collaboration.”
Enno Osinga, senior vice president, cargo at Amsterdam Airport Schiphol, said streamlining supply chains like the integrators might be one way to move toward IATA’s goal of taking 48 hours out of throughput time.
“IATA represents the airlines, so unless the airlines invent something magic to fly much faster, it’s a challenge with nothing to fix it,” Osinga said. “The only ones who can fix it is the rest of the supply chain, the airports, the freight forwarders, truckers and the handling companies. They must make sure to avoid unnecessary delays. The World Customs Organization also plays a fundamental role. It’s essential to build systems that provide full transparency. We need to try to achieve what the integrators have achieved for many years.”
The stakes are high, said Eric Vennekens, director of trade and infrastructure for ASML, a Dutch supplier of lithography systems to the semiconductor industry.
“We are working in the semiconductor industry, where every second counts,” Vennekens said. “An hour of earlier delivery of parts is a huge benefit to us and our customers. We need to work together as a total supply chain to refine improvements.”
Vennekens added that improved efficiencies in the supply chain and better collaboration along the chain could help trim some of that 48-hour goal. However, Osinga came back to the integrators model.
“The model is there, if you look at the integrators,” Osinga said. “They have a complete integrated chain. They tend to look at the total and a have a holistic view of the whole chain.”
Transparency, reliability and flexibility are key ingredients, ASML’s Vennekents said.
“It’s not always about costs. That may sound strange coming from a shipper, but I am willing to pay a little more for these.”
Representing the technology side of air cargo, Jos Nuijten, vice president of network integration strategy at Descartes Systems Group, said one way to push the industry forward would be to go cold turkey on paper air waybills.
“One reason that air cargo is so siloed is there is still a large dependency on paper,” Nuijten said. “That means that a lot of the parties involved have decided that that is their only information sources. They just hang on to that piece of paper. If we just get rid of it, it will be difficult for a couple of months, but it will force everyone to use electronic information. I say get rid of paper, get rid of the training wheels and that will speed up the supply chain.”
Al-Saleh of Agility Logisitics said that while there is a need to examine the entire supply chain, he worried that a quick move to standardization would result in reduced flexibility.
“In the freight forwarding environment, you have to have the ability to handle different sizes and weights in different markets depending on when the shipments come in and what customers require,” he said.
Kum noted that while Korean Air is moving hard to go paperless, the move is going slower in some countries.
“Some of our China customers are not ready for that kind of thing,” he said.