Pharmaceutical shippers are easily among the most idiosyncratic air cargo customers. For sensitive vaccines and lab samples, even the most well-thought-out supply chain cannot overcome the need for tightly controlled, transparent, and quick transportation. That does not mean, however, that pharma shipments are immune to modal shift to ocean freight. Between the years 2000 and 2013, a breach in trust between pharma shippers and the air cargo industry, stemming from the frequent incidence of temperature excursions, caused air cargo to bleed market share. During this period, air cargo’s share of pharma transport declined from 17% to 11%.
Seeing the need for an industrywide approach to averting excursions, the International Air Transport Association (IATA) launched its Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV-Pharma) program to boost pharma handling competency up and down the supply chain. IATA found that most temperature excursions occurred while the cargo is in the hands of airlines or airports during an improper handoff from one link in the supply chain to another. In practice, this meant that measurable progress in improving air freight’s pharma record would require cooperation from all stakeholders.
Due to the cost and complexity of becoming CEIV-Pharma certified, many forwarders, carriers, and ground handlers found it useful to band together at the airport level in the form of a “cargo community.” Collaboration through cargo community participation has since been an effective approach to improving
the reliability and perceived quality of the air cargo links in the pharmaceutical supply chain. The benefits of community participation, however, have not ended with CEIV-Pharma traffic, or even with the pharmaceutical vertical. On several fronts, cargo communities are introducing measurable process improvements.
From dialogue to data sharing
A useful starting point is the recognition that many obstacles inhibiting greater efficiency at the airport are outside the control of any individual entity in the air cargo supply chain. A lone freight forwarder, for example, lacks the tools necessary to combat long queues in and out of on-airport facilities. However, through participation in cargo community meetings and events, and the subsequent community-wide initiatives, stakeholders are starting to recognize the potential benefits associated with collaboration.
Since going live in 2015, Brussels Airport’s (BRU’s) BRUCloud platform, which was developed by data-sharing firm Nallian, has evolved from its pharma roots into a comprehensive tool. From the cloud’s launch with just a couple of pharma-focused apps that enabled stakeholders to visualize the quality and progress of pharma shipments and book pooled cool-chain equipment, five other apps with broader appeal to the cargo community have since been added. Newer features include a slot booking app that streamlines cargo pickups and deliveries at ground-handling facilities. A number of new apps are in the works, including a road feeder management app and a traffic guidance app.
Other airports, including Amsterdam Airport Schiphol (AMS), are playing a similar role in bringing together forwarders and handling companies in hopes of reducing wait times at the airport. Through its Smart Cargo Mainport program, Amsterdam has been targeting the movement of inbound and outbound
cargo flows for greater efficiency. One particularly interesting innovation is based on the realization that for most import cargo, the shipper is often listed on the Air Waybill (AWB) – not the forwarder contracted to pick up the consignment. In the past, it was not uncommon for ground handlers to manually confirm the identity of the forwarder associated with a shipment.
Following the launch of an “automated nomination” system, that is no longer the case. Using historical AWB, shipper, and airline data, the Smart Cargo Mainport team, in collaboration with Cargonaut and Incetro, created an AI-powered algorithm that predicts the forwarder associated with a given shipment. A next step will involve integrating the predictive technology directly into the internal software systems used by ground handlers at the airport.
Collaboration the new norm?
A decade ago, the notion of convincing directly competing companies that there was much to be gained through cooperation was almost unthinkable. As the potential gains become more visible at airports with robust communities, however, collaboration could become the new norm. Most cargo community leaders stress that a decent system requires active participation from all stakeholders. Still, participation cannot be forced. Instead, most successful communities partner with companies that are visibly passionate about launching a new idea or initiative. AMS, for example, says that all four of the ground handling agents onsite at the airport are now interested in integrating the automated nomination app into their own systems.
Progress is also being made in terms of the number of airports with robust companies. In October, Liège became the latest company to express a desire to build digital infrastructure around its cargo community. The airport is partnering with Nallian to develop its own cloud-based data sharing platform and plans to launch a number of apps, both new and familiar. In this next stage of cargo community development, other stakeholders are joining the conversation as well. Liège says it plans to develop an e-commerce declaration solution that would enable customs authorities to clear shipments before they even arrive at the airport.
Although many cargo communities evolved out of a desire to improve the pharma supply chain, the airport-led, data-intensive collaborative approach is proving effective in fortifying weak links across the supply chain. As Steven Verhasselt, Vice President, Commercial, Liège Airport, said during last month’s Cargo Facts Symposium in San Diego, “long-term handling improvements at the airport will come down to advances in cloud-based technology.”