Air cargo data: Let shippers get closer to airlines

Everybody collects supply chain data, but the real skill is turning data into information.
GT Nexus, a cloud technology platform whose customers include brand name shippers and forwarders, is keen to improve the quality of air cargo data so that it can match that of ocean freight.
Greg Kefer, vice president of corporate marketing at GT Nexus, believes that air cargo forwarders should focus on ways to improve the data quality related to the air shipments they are managing on behalf of customers. If that means getting shippers closer to the airlines, themselves, then so be it. Forwarders should do this and not fear “disintermediation”. In other words waving goodbye to the shipper’s business.
There is good reason to abandon historic air cargo prejudices. Ocean freight has upped its data game, said Kefer: “In the past, shippers saw ocean differently. The cargo went onto a ship for 45 days and disappeared into a big black hole.
“They had a choice: you went by ocean and rolled the dice, or you chose air and the cargo was there next day.”
And while containerised ocean freight appears to be winning market share versus airfreight, Kefer offers this observation: “I know of a $40bn retail company that is actually moving back to airfreight because of omni-channel.
“It is more important for them to meet demand instantly and operate without heavy loads of slow moving inventory that may arrive too late, and so pay a premium to move via airfreight.”
But airfreight has been painfully slow to provide timely data, hence the glacial penetration of the electronic air waybill (e-AWB), currently at 31.7% (August 2015) but way short of the 45% year-end target.
Even major shippers have problems extracting key air cargo data.
The GT Nexus Shipper Council, a community group of about 200 supply chain executives representing multiple global enterprises, wanted to benchmark air cargo data quality performance in ways similar to how they successfully managed it with ocean carriers.
Said Kefer: “The group had a heck of a time getting the kind of data needed to replicate ocean. One reason was that a lot of the data goes through middlemen, and shippers are not dealing directly with the airlines.”
That contrasts with ocean, where shippers can exchange data directly with the container line to upload digital information. Said Kefer: “Data quality becomes significantly worse when you use a middleman.”
Kefer recognises the important role of the freight forwarder in managing the customer’s cargo ─ in fact, five of the top global logistics companies are GT Nexus customers ─ but from an information perspective: “Make information a priority. Facilitate that commercial transaction so that the information flows and the customers have the right data.”
There is a longstanding visceral mistrust among forwarders when the suggestion is made that shippers should talk face to face with the airline: Disintermediation is the modern buzzword.
Kefer believes this fear to be groundless: “Look, these guys [shippers] need information and do not seek to disintermediate forwarders. They will pay a premium for good service, and that is not just for delivered as expected, but also for information stewardship, because information is power and is valuable.”
He added: “A lot of my customers are willing to pay a premium because the information is critical to their success as a supply chain operator, and saving a few thousand bucks here or there is not worth it if they are going to suffer in other areas in their supply chain.
“You get what you pay for. They are not out to disintermediate forwarders. If their business model is to interact with a 3PL or forwarder, then they value that relationship.”
He continued: “Think of all the e-commerce sites that you use to book passenger flights, with all that beautiful information. For example, getting alerts on your mobile phone.
“There is no equivalent in airfreight and I think that shippers see what is going on in the consumer world and they ask, why can’t we have this?”
GT Nexus customers – the likes of Caterpillar, Adidas and Pfizer ─ use the platform to collect supply chain information via the cloud in support of activities that take place “outside the four walls” of a company.
Said Kefer: “It starts when their supply chain goes into execution mode, into a network that includes suppliers, logistics providers, customs brokers and the banks. GT Nexus comes in when the process moves outside of the four walls. We can connect all these parties and allow companies to see what is going on out there.”
He added: “We are a cloud platform that multiple companies share, but which have their own private worlds within GT Nexus: a single stack, one line of code one, within a partitioned database so that competitors cannot see one another’s data. It is a lot like LinkedIn, but GT Nexus also has IT infrastructure to support the complex, secure business transactions taking place between the various participants in the global supply chain. ”
Data typically comes in as an EDI message to GT Nexus which has a translation capability to make the information visible to clients. The data can be a purchase order, a commercial invoice or an EDI event, such as when a plane takes off.
Kefer describes these millions of data points as pixels: “We build up the picture in the cloud, which sits in the centre of the network for all parties to operate against, be it the beneficial cargo owner or the providers they work with.
“The information model resembles LinkedIn. Today, when you change your e-mail address you go into LinkedIn and amend it, and then everyone in your network gets the news instantly. You did not have to send an email to all and hope they updated their individual address books. That is a very powerful information sharing model.”
GT Nexus also interacts with 3PLs such as DHL, CEVA, Kuehne + Nagel, DB Schenker and UPS.
The 3PLs are either there as the intermediary of an existing GT Nexus shipper customer or they use the platform in its own right as an added value service for their own customers.
The GT Nexus Shippers Council even has an annual award for an air cargo companies recognised by its peer community for leadership in customer service and data quality. Expeditors won the 2015 award for “superior air transport performance”.
Said Kefer: “A decade ago these the 3PLs realised that it is really hard to build good visibility technology. They are not technology companies but logistics providers, and that is what they are good at.
“But their inability to deliver visibility was costing them. The technology aspect of their service offering was hurting their customer relationships. So they came to us and they are now essentially offering GT Nexus under a white label.”
What message does GT Nexus have for the air cargo industry?
Said Kefer: “Pay attention to data, because it is vital. Information stewardship is ultimately going to differentiate the winners from the losers. Companies that cannot be expert provisioners of reliable, timely, accurate information to customers are going to lose. They will fail.
“Information stewardship is only going to get more and more important, and companies are willing to pay a premium for it.”

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Established in 1983, Air Cargo News is the leading source of news, information, interviews, analyses and reports to the global airfreight industry. Our leading portfolio includes print, digital and events that give businesses in the airfreight industry the ability to connect with decision-makers in this sector.