For a long time the lack of quality standards in the air cargo industry resulted in low productivity and duplicated manual processes to correct poor electronic data. As a result integrators were winning business from forwarders and carriers due to their ability to offer performance guarantees and more controlled processes. The industry recognised a need to implement processes, backed by quality standards, that were measurable and supported by data in order to meet the requirements of customers, shippers and consignees. The result – Cargo 2000 – is the largest process improvement initiative in the industry for over 20 years.
In 1998, IATA brought together 28 major airlines and freight forwarders, representing approximately 65 per cent of global airfreight traffic, to form an interest group with the goal of implementing a quality management system. It was hoped that improvement in the process flow between forwarder and carrier will help to ‘integrate’ them into common procedures.
The group sought the assistance of IT companies to enable them to re-engineer the transportation process from shipper to consignee through a ‘master operating plan’. This plan is now central to an industry-wide process control and reporting system, which in turn drives the corrective action systems.
Key to the master operating plan is the creation of a ‘route map’ for each shipment, which is then monitored and measured throughout the life of that shipment. In many respects this can be compared with a passenger travelling to a destination for a meeting. The passenger would need to know the time of departure, what time to arrive at the airport, time of arrival at the destination and at what time will they be through customs in order to get to their meeting. In the same way the route map establishes the exact times events need to happen throughout the shipment, and ensures that completion is on schedule. It also contains an alarm system.
Implementation of the project is divided into three phases. Phase one is focused on the post shipment audit of the airport-to-airport movement at a master air waybill level. Once a booking is made, a plan is automatically created with a series of checkpoints against which the movement is managed and measured. This enables the system to alert the Cargo 2000 member to any exceptions to the plan.
Phase 2 monitors movements at a house waybill level. My own company, Kuehne & Nagel is the first member to be awarded accreditation at this level, its IT systems having been certified as able to perform the required planning and control functions required by Cargo 2000. The programme, first introduced in Paris, has now been implemented in over 60 countries, and is currently being rolled out globally. Words such as corrective action, preventative action, continuous improvement, best known methods, key performance indicators (KPI’s) have already become part of front-line employees’ vocabulary.
The third and final phase of Cargo 2000 will focus on real-time management of the transportation channel at individual piece level with document tracking. This will require additional barcode scanning equipment on the systems of both forwarders and carriers in order to provide true visibility and quality control.
Shippers have expressed their approval of Cargo 2000 and the partnership between airlines and forwarders has now become almost seamless. Cargo 2000 is a quantum leap with regard to airfreight process control and enhanced service quality, and is certainly one of the most beneficial changes the airfreight industry has seen for a long time.
Chris Edwards is airfreight director at logistics Services Company, Kuehne & Nagel UK