Are Shippers Slowing Down Their Own Air Shipments?

By Staff -- Logistics Management, 5/1/1998

Can the scheduled airlines deliver a reliable, time-definite service that can compete with those offered by integrated carriers? Shippers are skeptical, but a series of test shipments shows that several parties, including shippers, bear the blame for the lengthy transit times that are the norm for traditional airfreight shipments.

The tests were conducted by Cargo 2000, the joint airline-forwarder interest group formed by the International Air Transport Association (IATA) in 1997. The group, which now includes 19 airlines and 15 forwarders, has been working with Unisys to develop a generic operations and information-systems model that would give members the tools they need to offer time-definite services. (See "Air freight gears up for the 21st century," March 1998, Page 87.)

The group has conducted three trials to collect baseline data on the shipping process and to test new procedures. Last year, the first test looked at average transit times for containerized cargo. Investigators found that 42 percent of containerized cargo moved door to door in 72 hours or less. The second test measured transit times for transshipment and non-containerized cargo. That investigation found an average door-to-door delivery time of 6.3 days--basically unchanged since IATA's first transit-time study in 1975.

In that second trial, the working party found that, on average, shipments spent only 10 percent of the time in motion. More than 90 percent of the time was spent awaiting documentation or some kind of processing; 60 percent of the time was spent at the destination, waiting for clearance and delivery. Interestingly, the big holdup there was not the actual customs-clearance process. Rather, time spent waiting for brokers to submit customs entries was the most significant source of delays.

Based on that information, the working party developed a "generic control process" that was tested worldwide by six forwarders and 10 airlines. The new procedures in information management, freight handling, and documentation significantly reduced transit times for all types of cargo. Of the 950 shipments tested, 91 percent were delivered door to door within 72 hours after pickup.

The studies demonstrate that the most significant roadblocks relate to information management, says Cargo 2000 Project Manager John Hartnett. Duplication of processes, such as rekeying information, causes many delays, he says. How and when information is transferred also affects the timely submission of customs documents. "The traditional customs-clearance process begins when the freight and documents arrive at the destination. We're saying that isn't good enough, that it must start when the freight is picked up."

The solution to these problems is to create seamless operating procedures and a single information system linking all parties, he says. Shippers must be a part of this process because they are a major factor in issues relating to documents and information, Hartnett believes. They also affect the carriers' ability to manage door-to-door service, for example by insisting on bringing additional players into the picture, he adds. "The integrators can offer time-definite service because they have managerial control over the whole process.... When the customer wants delivery in three days but there are too many elements involved, we can't guarantee time-definite delivery," he says. Shippers will need to empower their freight forwarder or airline to manage the shipping process through to the end if they want reliable, time-definite service, Hartnett says.

The next step in the project is to conduct focus groups and interviews with about 100 major airfreight shippers in North America, Europe, and the Far East. Cargo 2000 members will use the information gathered to create a shippers' "wish list" and to determine how shippers can facilitate the groups' goals.