In his opening address, chairman of the Singapore Aircargo Agents Association (SAAA), which hosted the event, Steven Lee noted the rapid and “impressive” recovery in Asia towards the end of 2009 and first quarter of 2010, especially intra-Asian traffic, from lastyear’s global recession.

He went on to say that the Chinese demand for goods helped to “fill the gap” resulting from the drop in international trade. “Given this dynamic recovery Asian exports have topped the record volumes of the pre crisis years,” he said.

“Airfreight has gained some of the ground it has lost during the recession and the outlook remains positive, supported by Asia’s buoyant economic growth.” But Lee added that the challenge “is the sustainability of the recovery and the remaining concerns over regional imbalances, as well as political and economic volatility in the region.”

Key issues discussed at the meeting once again focused on the freight forwarders’ relationship with the global airline body, the International Air Transport Association (IATA), where a FAPAA talks business, takes IATA to task very frank dialogue occurred between the two parties, particularly over the contentious issues of security and IATA’s Cargo Accounts Settlement System (CASS).

“IATA initiatives for the freight forwarding industry have been a particularly important agenda item for the past five years at the Asia Pacific meetings,” FAPAA said. “CASS, E-freight and now the introduction of the E-Air Waybill (E-AWB), have all been a major concern for the representative associations of the delegates.”

Bearing the brunt of the questioning and discussion were IATA’s Stephen Smith, Wong Hong and Kennard Ser who gave updates on IATA’s various programmes. As IATA’s e-freight project director, it was left to Smith to give an update on IATA’s bid to do away with up to 20 paper documents, replacing them with electronic data. Smith also touched on a new initiative from IATA, the electronic air waybill, or E-AWB.

The 18-member Federation of Asia Pacific Air-cargo Association (FAPAA) celebrated its the 25th anniversary during its 37th Executive Council Meetingand AGM in Singapore last month.

E-freight
Smith noted in his E-freight updatethat there was a board mandate set in2006 to establish E-freight in all viablelocations by the end of 2010, meaningthat by end of this year E-freight shouldbe live in 44 locations and 76 majorairports representing more than 80 percent of global airport traffic.

He noted that at end of April, E-freight was live in 25 locations and more than 125 airports with 200 stakeholders and about 175 freight forwarders, 25 airlines participating, covering more than 3,000 trade lanes.

In Asia the initiative went live in Tianjin – the first location in China to go live – to be followed by India and Thailand later this year. Smith admitted facing some “struggles, to get a coordinated approach,” in India and as a result are looking at other areas if India and Thailand don’t come in, likely Pakistan.

“Uptake of E-freight in Asia is increasing on a monthly basis and is leading the way in terms of the origin and destination of E-freight shipments, complemented by a number of airlines operating out of the Middle East, Asia and Europe,” he said.

Currently global E-freight shipments amount to around 6-7,000 shipments per month, according to Smith, who acknowledged that this volume only represents around half of one per cent of total market volume.

“Am I worried about that?” he asked. “No, because at the moment the mandate for the project is to build the E-freight network, get all the locations capable and the next stage beyond 2010 is to get more people to use E-freight and increase the volume.” He added that where freight forwarders and airlines are using E-freight, on average 30-35 per cent of their business has already converted to E-freight traffic.

The key element to get greater adoption of E-freight is freight forwarder adoption, Smith observed, adding: “The key message that we’ve got over the past 12-18 months was that the forwarders specifically didn’t see a true value in E-freight as long as they still have to deliver a paper copy of the air waybill to the airline, because it’s the contractual document.”

He said that after a significant amount of time, effort and discussion between the International Federation of Freight Forwarders Associations (FIATA) and IATA, the two have come up with a formal recommendation for an E-Air Waybill (E-AWB). Smith noted that technology was another inhibitor preventing forwarders from adopting E-freight and IATA has been working with technology providers to devise affordable solutions, which includes a number of cost-effective, web-based solutions now being marketed.

“The key point,” Smith emphasised, “is that beyond 2010, there will be far more resources and time spent on engaging the forwarder and airline community in getting people to adopt it. The first stage of the process was to build the capability, what we didn’t want to do was divert resources away from building the capability,” he said.

But Smith’s presentation drew a rebuke from SAAA representative Alec Koh who said: “If you talk about the pilot forwarders, they are all the ‘big boys’ and they were already E-freight before you even thought about it.

“They were already there, so for them the cost is already built in. If you look at the pilot forwarders, I think they are less than one per cent of forwarders in the world. Now that you’ve got everything set up, what about the other 99.9 per cent that are still working on their IT programmes – their EDI, their transmissions. I think it is something good but it’s going to take time. If E-freight is here to stay and there is a cost, let us share the cost. If we are going to have some harvest to reap, than I think all of us should share it,” he urged.

In response, Smith noted that there were cost benefits along the entire supply chain and he also noted that in many cases the big forwarders were have more trouble adopting E-freight than some of the smaller ones, because they had legacy IT systems that have been around for more than 20 years.

Delegates urged IATA to consider that the air freight industry must be consulted when it comes to e-freight. Without the co-operation of the freight forwarders, the programme cannot be successfully implemented. “There cannot be a oneway conversation with IATA telling the freight forwarders what is going to happen. A two-way conversation must begin,” added Koh.

Doug Meuross owner of High Tech Freight Solutions was also on hand to give the perspective of the IT/ software industry. “Although I am a big supporter of E-freight and electronic data exchanges, I am frustrated with the slow pace of the uptake of e-freight in the marketplace.” Meuross agreed with the SAAA representative that the E-freight programme is too airline-centric and that in order for the implementation to be successful, the entire chain must see a benefit.

CASS
Following an update on IATA’s Cargo Accounts Settlement Systems (CASS), by Wong Hong, IATA’s regional director for Asia Pacific, a number of issues were raised by the delegates, including criticism by Hong Kong Association of Freight Forwarding & Logistics (HAFFA) delegate, Walther Nahr.

“You always talk about the airlines, the airlines and the airlines,” said Nahr. “You are not talking to the air freight forwarders, we’ve had issues in several countries simply because the freight forwarding industry through the associations in their respective countries were not consulted and there were hiccups, left-right-and-centre. Please remember to talk to the freight forwarding industry at the same time you’re talking to the airlines, otherwise you will have a disaster on your hands as we have seen in several countries in the Asia-Pacific region.”

In response, IATA’s manager for Cargo Development Asia Pacific, Kennard Ser said that from last year it has been mandated to establish an Asian Liasion Working Group (ALWG), to hold meetings with country associations to help “understand every issue the association has and we will do our best to address the issues in that meeting.”

The issue of IATA’s Secure Freight project under way in Malaysia, also received some attention and sharp criticism from FAPAA delegates, again for IATA’s lack of consultation with the freight forwarding associations. Even the representative of the Kuala Lumpurbased Association of Asia Pacific Airlines (APAA) who was present at the meeting, noted that his association had not been approached by IATA regarding the security project.

FAPAA said the meeting with IATA had been “one of the most positive in the past five years,” with Koh giving an optimistic conclusion to the session when he said: “We all know that e-freight is here to stay, now tell us, the air cargo associations, what we can do to help you get this programme off the ground”. FAPAA noted that although no immediate resolution can be found for the various issues raised by the delegates, “the relationship with IATA is looking more positive as both associations take a more open approach.”

The three-day event was hosted by the Singapore Association of Air Cargo Agents (SAAA) and held be at the new Resorts World Sentosa Convention Centre. The annual meeting of the Asia Pacific Federation saw 45 delegates representing the 18 member countries/ regions of the Asia Pacific in attendance with up to 30 local guests and observers attending the various functions. The meeting also celebrated the SAAA’s 40th anniversary, as well as the 25th anniversary of FAPAA.

Special guests at the FAPAA meeting this year included Seow Hiang, CEO of Changi Airport Group and Albert Lim, division head, Cargo/Logistics, Development Division at Changi Airport.