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Digital connectivity in the air freight sector

06/09/2016

IATA publishes a guide to encourage the uptake of more efficient digital communication systems that enhance sector efficiency and security

The International Air Transport Association (IATA) has published a White Paper on digital connectivity and methodologies for data interchange in the air freight sector. This is a guide designed to facilitate the adoption of more efficient communication systems, which allow faster and more secure connection to all trading partners in the supply chain.

Although electronic messages have existed since the 80s, the air freight sector is still highly paper-reliant. In each shipment, companies generate around 30 documents which subsequently have to be managed manually, which involves excessive costs, long working hours and a wide margin of error.

Faced with this situation, the international organization has set the goal of modernizing the cargo industry with the e-freight program, which aims to do away with paper completely. The first step towards achieving it is implementation of the electronic air waybill (e-AWB), whose overall penetration is currently 39.2%.

These technological breakthroughs also require the rollout of digital connectivity methodologies. In the White Paper published, titled Air Cargo Digital Connectivity and Data Exchange Methodologies, the IATA analyses two main systems. On one hand, the mode designated Host-to-Host and, on the other, commercial connectivity services (CCS) through an intermediary.

 

What are the differences between the two methods?

 

The Host-to-Host system consists of direct communication between two trading partners using the same communication protocols. Current estimates show that only 5% of all communications between cargo airlines and forwarding agents take place through this method. The reason for such scant popularity is that a plethora of different protocols are used in this industry, so adopting the system entails great difficulty. Even so, the companies choosing this option mainly go for TCP/IP (Transmission Control Protocol/Internet Protocol) connectivity or Internet-based protocols, such as FTP or SMTP.

Unlike this methodology, in CCS connectivity the partners make contact with the aid of a service provider specializing in electronic data interchange, such as EDICOM, to act as intermediary. This is the system most widely used by companies in this sector - accounting for 95% of all communications - due to the advantages it entails.

With CCS connectivity, air freight lines and forwarding agents outsource connectivity to a third party. The most common practice consists of implementing a specialist solution, such as EDICOM Air, which is integrated with the company’s management systems and complies with the standard messages promoted by the IATA. This platform then takes care of translating the messages and connecting with the recipient, using the communication protocol required each time. Another advantage of connecting via an intermediary is that it facilitates the adoption of other added value solutions: traceability, safekeeping, portals and applications, etc.

 

To learn more about digital connectivity and data exchange methodologies in the air freight sector, download the IATA White Paper.

 

 

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