How can industry change initiatives such as e-freight and Cargo 2000 be moved beyond the enthusiastic adopters – familiar names such as Lufthansa, Cathay Pacific, Air France-KLM and Kuehne + Nagel that always seem to be in the forefront of such initiatives – and spread to the wider air cargo industry?
It is certainly a pertinent question for Cargo 2000 16 years after it was first proposed at the 1996 Air Cargo Forum. The organisation has become established as the key quality performance measurement standard for the industry, but it has yet to be universally adopted in the way its founders surely hoped.
As with e-freight, this has prompted a re-think in recent years. April 2012 saw the unveiling of an updated Master Operating Plan (MOP), the step-by-step definition of cargo processes which is at the heart of Cargo 2000. This was designed not just to bring it in line with changes in the industry since 1996 – new security rules and e-freight, for example – but also to make it more accessible.
The original MOP, admits Mattijs ten Brink, chairman of Cargo 2000 for the past two years, was a rather forbidding document that was hard for non-experts to interpret. The new one, unveiled in April, is designed to be user-friendly, and is available online for anyone – not just Cargo 2000 members.
Ten Brink expects several benefits from the change. One will be that non-members – in particular smaller forwarders and airlines – will be able to see how much good practice is enshrined in the MOP, which will hopefully encourage them to adopt it or become members. The other is that it will be much easier to update, with the possibility of yearly or bi-yearly changes to reflect evolving industry requirements.
Since the unveiling of the new MOP, Cargo 2000 has also been undertaking a thorough revamp of the detailed airport-to-airport specifications that are needed to achieve the measures in the MOP – in particular those governing the handover of freight from airline to forwarder and vice-versa. One new measure, which has been introduced, indicates when a forwarder can come to the warehouse to pick up the freight, something which was not specified before. This revamp should be finished by January and will be put to the Cargo 2000 AGM in March.
The new MOP brings Cargo 2000 more closely into line with e-freight, though ten Brink says the two were always interlinked. “The concept of moving to a paperless environment has always been part of Cargo 2000, and e-freight was mapped alongside the MOP,” he says. “They are completely compatible with each other, and I personally have a hard time seeing how a company can implement e-freight without having something like Cargo 2000 in place.”
He admits that both initiatives have struggled to produce a value proposition to appeal to smaller players in the industry, however, while even some larger companies adopt a wait-and-see attitude, holding back from implementation while the pioneers sort out the glitches, or waiting for a critical mass of the industry to adopt the programme. “For me it is a no-brainer, but for others it is hard to look beyond the complexity to the bigger benefits,” ten Brink says.
Cargo 2000 decided a few years ago to reflect that in a new classification of its members – from ‘ordinary’, for companies who are simply members to silver (members starting to implement), gold (those active in quality and procress improvement) and platinum – companies who are both fully implementing Cargo 2000 and participating in developing it further.
Not surprisingly, one of 10 Brink’s goals is to persuade members to step up to a higher level of membership, and he says Cargo 2000 has developed some business cases to this end. But he also says the organisation has consciously stopped preaching on the subject, and recognised that each member has different priorities and business needs.
Speaking of his own company, Air France-KLM Cargo (of which he is senior vice-president sales and distribution), ten Brink says that if Cargo 2000 did not exist, then the airline would have to invent something like it. “It drives out cost, and it gives us a standard way of talking about processes that enable us to measure performance, and to objectify discussions with our customers.”
Putting the MOP online may help other companies to see the benefits that Cargo 2000 offers, but it also carries the risk that non-members may simply decide to implement Cargo 2000 without paying to join. To this end, the organisation is looking at introducing auditing by a recognised outside body for its members. “If we can do a better job on this, and offer a strict independent audit, then that would enhance the benefit of being a member,” says ten Brink. “This is something we will consider at the next AGM.”
An independent audit might also help Cargo 2000 get more recognition among shippers, which has not happened so far. “They show interest in the fact that forwarders and airlines are talking to each other, but generally do not demand Cargo 2000 membership in tenders,” ten Brink admits.
He says one possible reason might be that it requires considerable knowledge about the air cargo industry to interpret Cargo 2000 measures correctly. For example “flown as planned” reflects the bilateral agreements in place, which differ between individual forwarders and airlines. “So it is hard for shippers to reach conclusions based on the data on our website,” he says.
Independent audits might get around this problem, and ten Brink also thinks the membership classification helps. “A shipper can at least see that a gold member is more committed to Cargo 2000 than a silver one.”
One other innovation Cargo 2000 is introducing to make itself more user-friendly and relevant to its members is a new reporting system. Previously members have supplied these on Excel spreadsheets, from which data then has to be extracted to go into the published performance tables. But a new web-based reporting system is now being implemented by Swiss-based IT company Linalis, using tools created by Pentaho Business Analytics in the US.
Ten Brink describes this as “night and day, compared to what we have now”, and says that when it goes live at the end of this year, companies will be able to control who gets to see data simply by giving them a web log-in. They will also be able to drill down data in all sorts of ways. He hopes this will enable Cargo 2000 data to be disseminated more widely within member companies, reaching branch offices and not just head offices.
There remains one other long-term goal for Cargo 2000, which is to get to its fabled phase three, piece level stage (phase one being airport-to-airport, and phase two door-to-door). This was envisaged in the original Cargo 2000 concept way back in 1996, and it remains a goal, even if a somewhat distant one.
“Once we have defined the door-to-airport and airport-to-door processes more closely, we will look at piece level, but it won’t be in 2013,” says ten Brink. “If we want to hook shippers and to use Cargo 2000 as the basis for security controls, then we have to have piece level.”
A shorter term goal might be to get all major forwarders implementing the current MOP. Ten Brink says one thing that is hampering this is that many are engaged in major IT upgrades, putting Cargo 2000 implementation onto a lower priority.
“But many of these projects should be finished soon, so by 2013-14 I am fully confident we will see full implementation,” he says.