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Tried & tested

As airports and air cargo communities consider a cooperative approach to e-freight, Airline Cargo Management asks Luc Scheidel, commercial director at Cargonaut, and Patrick Murray, head of Calogi, what the key issues are

What benefits does an airport cargo community offer users?

Luc Scheidel: The air cargo community demands one centralised point of information input and access that covers the whole chain. As soon as one party (for example, a shipper or forwarder) creates and inputs information, all parties which need that information should have access. This single repository of information enables processes to be streamlined – ‘green fast lanes’ can be created. An airport cargo community platform enables the handling and transportation processes to be quicker and more efficient.


Patrick Murray: The current airport cargo community systems focus mainly on messaging between forwarders, airlines and customs. They can be a cost-effective means of data exchange and taking care of the ‘many to many’ connections required for information sharing. However, the cargo community systems have been around for decades and still focus on the traditional business model.


We took a fresh look at the drivers for developing a sophisticated solution for the Dubai market. First, we felt that the large freight community in Dubai lacked adequate automation to do business among themselves, and making the supply chain inefficient. Second, we identified that much of the business between trading partners had been carried out on a cash basis, resulting in long queues and waiting times while a customer settled payment and waited for receipts. Third, there were too many steps in the process, resulting in further inefficiencies. Finally, we recognised we were still largely a paper-based industry, which in many cases means delays in shipment handling while paper documents are produced and distributed. We built the Calogi solution to address these shortcomings and simplify the air cargo supply chain process. Calogi not only reduces operating costs, but is also proven to generate new income streams.


How does your system differ from those at other airports?

LS: The Cargonaut platform has been founded and is owned by stakeholders at Amsterdam’s Schiphol Airport. Cargonaut’s main aims are to facilitate a stable platform, promote efficiency and enable innovation. There are no other commercial objectives. Another differentiator at Schiphol is the strong cooperation between commercial parties and government bodies, which is very unusual in air cargo. Through Cargonaut, commercial information is used to facilitate customs and other processes.


PM: We have many differentiators, but there are three that immediately spring to mind. Firstly, Calogi’s credit accounting solution allows any seller of services on the portal to open up an account with a potential buyer, or defer collection of payment to Calogi. Secondly, our system allows airlines to do risk-free business with freight forwarders, and vice versa. And finally, Calogi’s digitising of many of the standard business documents, such as invoices, statements of accounts, airlines sales reports, stock reports, air waybills and so on, sets it apart.


Does having an airport-specific community create ‘silos’ or more fragmentation, when actually the information should be available to all partners in the end-to-end chain?

LS: To have a true airport community platform at Schiphol is already a step forward compared to other airports. An airport community platform reduces the ‘silos’ and promotes and supports the sharing of both information that is already available and new information that can be made available through the platform. But Cargonaut also strives to create ‘green fast lanes’ that support end-to-end visibility, and we are working on initiatives that include cooperation with other airports, as well as shippers.


PM: They can, but it depends on the design of the solution. Most community systems support Cargo-IMP messaging and so the exchange of export-related messages between forwarder and airline is possible. The airline can then transfer AWB data to the cargo terminal operator. Where it can become fragmented is in the sharing of data with other supply chain stakeholders, such as the shipper, consignee, import forwarder, 3PLs, and the like. Calogi has the ability to share the data with the relevant parties.


What are the costs to users? Are all players happy with both the system and the cost?

LS: More and more people realise that Cargonaut is a crucial asset for the Schiphol community, and that it is vital in order to drive innovation. A new tariff structure has been introduced, which has been implemented for the forwarders first. Whereas the old structure was based on a pay-per-message system, the new structure is based on participation in the platform, fair use and transparency. A ‘bundle’ (fixed amount based on average message volume) is used as the tariff basis, which means that invoices are fairer and easier to understand, and customers know in advance what they will pay.


This has admittedly led to some dialogue with the forwarders, since not all were prepared for the revised costs related to this shift. But forwarders understand the importance of the platform and the essential work that is conducted by Cargonaut. At the same time, it is their right to challenge Cargonaut to maintain good value for money, and that is certainly one of our aims.


PM: We have deliberately priced our solution so that it is within the reach of small-to-medium enterprises. We did not want cost to be a barrier. Even an exporter which has one or two shipments a week has found our system to be extremely cost-effective. Our philosophy is based on the ‘pay as you go’ principle while increasing our transaction volume to keep the unit price down. In addition, dnata Cargo Terminal Operations is sharing the savings achieved through Calogi by offering its ‘e-freight agents’ substantial benefits in terms of discounts.


At IATA’s World Cargo Symposium there were calls for data to be better shared, including across modes. Can you deliver that, and how challenging is it?

LS: Cargonaut is already involved in initiatives to share data across the modes directly involved in air cargo: that is, air and trucking. Cargonaut is also a key participant in the Dutch Government’s Neutral Logistics Information Platform project, whose goal is standardisation of data exchange between all modes of transport, including ocean and rail freight. The challenge will be securing the cooperation of all parties and their willingness to share data.


PM: To be frank, these calls have been going on for more years than I can remember. The biggest challenges are the investment required for a multimodal database which can share data with all stakeholders, including those of rail, sea, road and air, as well as an alignment of standards. Calogi’s design allows us to share data in a variety of formats, but it would be a Herculean task to implement. A better approach would be a collaboration between the major IT suppliers servicing the various modes of transport. Since most international traffic is carried by sea, the lead should really come from this industry.


What developments are you making this year?

LS: Our main focus this year is to initiate innovation for the import chain. Information provided by shippers and airlines needs to be shared to enable seamless customs, handling and transport processes. Our strategy is to improve processes at Schiphol so that airlines have a shorter turnaround time, handling operates more efficiently, and forwarders know in advance what shipments to expect. We also aim to improve processes between airports, to build ‘green fast lanes’ that support Dutch import and export.


PM: We are looking to simplify the business in Dubai further by introducing a range of self-service options for customers. We are working on the requirements and planning to roll out the first phase this year. Also, with the current capacity constraints in Dubai, we have seen a huge surge in terminal dock bookings made through Calogi. The Calogi Dock Booking feature has allowed the cargo terminals to streamline their acceptance and delivery process, allowing an agent to pre-book an import or export dock and receive priority service. The cargo terminal has identified off-peak, normal or peak rates for each acceptance and delivery dock to allow them to spread the workload. Based on historical data and the type of dock, Calogi calculates the loading and unloading time required for one or more shipments and automatically determines the time that is necessary to complete the acceptance or delivery process. We are now working to streamline this further to make it easier for a customer to pick up and deliver shipments.

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