AIR cargo needs to become more productive if it is to compete with other modes, and technology is the way to do that. That is the message of Lise-Marie Turpin, now in her fifth year as vice-president freight for Air Canada.
“Other modes are getting more efficient and we need to make sure we hang onto traffic we have and not lose it to other modes,” she says.
“As an industry, we are about selling speed – that is our differentiation – and moving high value goods. If other modes catch up with us on speed, what can we do to really add value, to be more efficient, streamlined, more quality driven?
“Add to that the fact that the regulatory authorities are imposing more and more requirements on us that will slow us down, and to transmit data electronically is the only way ahead. It is coming our way in any case, so we might as well embrace it.”
Air Canada Cargo has certainly not been reluctant in the e-business space. One of its recent initiatives has been to work with Kuehne + Nagel and DHL Global Forwarding to switch from EDI messaging to the new XML messaging standards agreed by IATA.
Turpin says the advantages of XML are both speed – “it is almost instantaneous” – and cost. Since XML works via the internet, there are no third party messaging costs. “You are not constrained by having only a certain number of digits in a field, as you are with EDI. This is the language of technology, and the industry needs to embrace it. It will not go back the other way, so companies need to get on board.”
Live transmission of the XML messages started late last year, and involved house airwaybill, master airwaybill and shipment status messages, three of the eleven mes-sages that have so far been given an IATA standard. Air Canada was active on the IATA working group that drew up the standards, and is keen to get more forwarders using the technology. Turpin admits this has been harder than expected, but says an XML e-security declaration is being trialled with Canadian Customs.
A priority for 2013 will be pushing the e-airwaybill, however, whether by EDI or XML. Turpin says it has not yet been officially launched in Canada, but the multilateral agreement on electronic airwaybill terms at the IATA World Cargo Symposium in Qatar is a key milestone in the process, and Air Canada Cargo will now be focusing on getting its customers to sign up to it.
The goal is to deploy e-airwaybills both internationally and domestically on 80 per cent of the Air Canada network by the end of June. “We are spending a lot of energy on this at the moment, and we must not underestimate the work involved and the number of dependencies in it that affect new projects,” Turpin says.
Air Canada Cargo has also been thinking about the needs of small-to-medium forwarders who do not have access to conventional methods of electronic transmission. For them it has worked with Unisys to enhance its Cargo Portal Services e-booking website to enable for-warders to enter all the data needed for the airwaybill at time of booking. Turpin says this is now live and is being well used.
In addition, the carrier is looking at how to expand the range of products that can be booked on the CPS portal to include more specialist products. “We don’t want to discourage people from booking by ‘phone or fax, but we want to give them better tools online,” says Turpin. “We want to make CPS a one-stop-shop, so it is more attractive to customers.”
Asked what percentage of bookings come via the portal, she says it varies country by country. “Some markets are more apt than others. The challenge of our industry is that it has players who are at varying levels of technological abi-lity. We are only as good as the lowest common denominator.”
Some types of technology are becoming pretty universal, however, an example being the mobile telephone. People feel comfortable using them, and Air Canada is now building on that by trialling the use of iPhones to replace conventional barcode scanners in its handling operations.
The solution, dubbed iLynx, uses Unisys software along with the iPhone hardware and operating system to log shipments, capture data and provide realtime information to Air Canada’s
main WebLynx IT system. To-date, it is being piloted on the import side in Toronto, but if successful it could be used in other warehouses.
The benefits of the devices include cost – they are much cheaper than industrial bar-code scanners – but a more intangible one is that iPhones are lighter and more intuit-ive to use. This, Turpin admits, means that employees are less likely to ‘forget’ to bring them with them when they move around the warehouse.
“That means we get good pick-up by the employees, and tests have shown that teams using the iPhone show a marked improvement in performance versus those that use the old device. We also get better real time information. Before, they would break down a pallet, do the check-in and then upload the data back at base. Now they update the data on the spot.”
Like many carriers, Air Canada Cargo is facing tough economic conditions. Turpin says there was a bit of an improvement in the fourth quarter of 2012, but the first quarter of this year has been challenging again. In early March, she was seeing a slight uptick but unsure how long it would continue.
Despite this, it looks set to be a year of expansion for the carrier, with five B777-300ERs due to join its fleet between June this year and February 2014. The first will be deployed from Montreal to Paris, and will free up a B777-200 to fly to Istanbul, a new destination for Air Canada. Toronto-Beijing and Vancouver-Beijing will also get extra frequencies as the aircraft roll out, and Toronto to Seoul flights will become direct instead of being paired with Vancouver.
In addition, Air Canada is launching a new low-cost carrier called Rouge from July, which will have 50 aircraft and focus on the North Altantic in summer and the Caribbean in winter, using B767s retired from the main fleet. It will introduce some new destinations to the network, such as Venice and Edinburgh and, for cargo purposes, will be sold in just the same way as the main Air Canada network.
Turpin must be hoping for an uptick in cargo demand by the time the new capacity comes in, because she says that a problem in the wider market at present is growing belly capacity at a time when cargo demand is sluggish. “That means a lot of carriers are being very aggressive on yield,” she says.
She admits that the new Air Canada capacity will be adding to that problem, but says: “We are a passenger airline and we need to remain competitive. The geography of the world is completely changing. Europe is now mature and all the growth is coming out of China and the other BRICs. Asia is certainly a big opportunity for revenue now and, in future, I think we’ll look seriously at South America, and maybe get into the Middle East and Africa.”