Case Study- E-Freight Project by IATA. Free Essay

The advent of technology has resulted in a significant change in the airline industry. The E-freight project has been pursued by IATA to help in building an air cargo transportation system that has zero reliance on paperwork and is executed through a formidable regulatory framework that incorporates modern technology (Cathay Pacific Cargo, 2017). Undoubtedly, e-freight has been touted to be a panacea to various transactional and transportation challenges that have been encountered in the airline industry and, more particularly, air cargo. Moreover, the e-freight project seeks to accelerate the adoption of e-AWB and ensure that the data quality is improved through Message Improvement Program (MIP) (McGaughey & Gunasekaran, 2007). Notably, businesses always strive to pursue cost-efficiency processes that would result in substantial revenues that can guarantee favorable competition in the ever-increasing competitive business environment (Muir, 2018). In light of this, the revolution of IATA e-freight is expected to bring a significant impact on air cargo. However, despite the expected benefits that are expected to emanate from the e-freight project by IATA, there are different challenges that are confronted by the e-freight project.

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Problems Faced by the E-Freight Project

It is worth noting that the adoption of modern IT technology has impeded the smooth take-off of the e-freight project by IATA. Several air cargo carriers are still using moribund IT systems and business growth has been significantly hampered by the slow adoption of modern technology (Burns, 2016). Christopher Shawdon, Unisys vice president, noted that the slow adoption of new systems could be attributed to enormous investments that have been made by some air cargo carriers on their current ones (Burns, 2016). Furthermore, most carriers have clung to outdated messaging formats, and this has proved to be a key challenge to the e-freight project. Additionally, some carriers have been blamed for making slow progress toward the adoption of XML messaging, which is largely credited for having the potential to enhance efficiency and limit the administrative challenges posed by the outdated messaging format (Air Cargo News, 2017). CHAMP Cargo System's Steve Hill highlights that the adoption of XML is inevitable as CargoIMP has proved its inability to align with the emerging complexity of the data flow needs. Moreover, the underlying challenge facing the e-freight project is the lack of better collaboration, as changing the entire operations of the supply chain is always challenging (Air Cargo News, 2017). Also, most carriers have failed to ensure consistent use of the existing electronic standards, which significantly impedes the e-freight project.

Solutions

Considering the challenge of the slow adoption of new IT systems, air cargo carriers should be encouraged to make swift changes and progress in adopting the modern IT systems as that would guarantee efficient air cargo operations. For instance, the carriers should focus on adopting the latest technology such as sensors, which will enhance the supply chain security band hence avoid product substitution. Moreover, seeking a strong coalition among the air cargo carriers' stakeholders will ensure that the best collaboration by individuals who are committed to the effecting revolution in the airlines industry is achieved (Burns, 2016). More importantly, the carriers should be imparted with the knowledge concerning the benefits of the latest IT systems such as e-AWB. Understandably, e-AWB helps in ensuring the accurate flow of information in the supply chain network and promotes operational efficiency that will reduce the inherent errors associated with paper AWB. Additionally, every stakeholder in the air cargo business should be encouraged to embrace technology, considering the overall evolution of the business environment. Also, the airlines industry should invest heavily in research and development that will help in bringing other innovations that will either improve the existing process or provide a complete evolution of various processes in air cargo business.

Moreover, the slow adoption of Cargo-XML can be addressed by implementing pilot projects and demonstrating how it works, as this will inevitably encourage air cargo carriers to understand the inherent benefits (Air Cargo News, 2017). IATA should develop implementation programs and organizes exhibitions that will present the success stories about the new systems. More importantly, the awareness campaign should be organized to make various stakeholders understand the environmental benefit of hinging every cargo operations on a digital framework rather than relying on paperwork. Additionally, decision-makers in the air cargo business should leverage on the Enterprise Resource Planning (ERP) and other latest IT systems to ensure operational efficiency is achieved, and administrative cost are reduced to guarantee better competition and flow of more revenue (McGaughey & Gunasekaran, 2007).

Lessons Learned

Understandably, the project has provided a better insight into the evolution that is currently witnessed in the modern business environment. Furthermore, the e-freight project has illuminated the potential benefits that will result from the adoption of new IT systems and the need to ensure collaboration among different stakeholders in the air cargo business. Another key lesson that can be drawn from the e-freight project is that it has provided a framework on how modern technology can be incorporated in the business model to guarantee operational efficiency and increase customer satisfaction. The E-freight project has helped in understanding the benefits that the digitization in the air cargo business can bring to the environment, especially when paperwork is abandoned in every operation. More critically, the e-freight project has provided an important lesson that innovation is not a problem in every business environment but the adoption and implementation. The challenges faced by the e-freight project by IATA are premised on the failure of stakeholders to adopt the new systems.

Conclusion

It is worth noting that the e-freight project has proved to be integral in providing a breakthrough in aligning with modern technology in every operation in the air cargo business. The emergence of e-AWB has helped in edging out the paper e-AWB, which was not only an environmentally degrading process but also an impediment towards the achievement of operational efficiency and reduction of administrative cost. However, some inherent problems have created a stumbling block to the e-freight project. Many carriers are always reluctant to adopt modern IT systems. In light of this, therefore, the carriers should be encouraged to adopt the new IT systems as that will provide a departure from the outdated systems that are costly to digitized systems that will bring immense benefits in the air cargo business and the airline industry in general.

References

Air Cargo News. (2017, Sept 19). The Long, Slow Road to the XML Message Standard. Retrieved from https://www.aircargonews.net/people/interviews/the-long-slow-road-to-the-xml-message-standard/

Burns, J. (2016, April 15). Adoption of the Latest IT Technology Still Too Slow, Warns Unisys. Air Cargo Week. Retrieved from https://www.aircargoweek.com/adoption-latest-technology-slow-warns-unisys/

Cathay Pacific Cargo. (2017, May 17). IATA Q&A: Glyn Hughes on Digital Innovation. Retrieved from http://cargoclan.cathaypacificcargo.com/iata-qa-glyn-hughes-on-digital-innovation/

McGaughey, R. E., & Gunasekaran, A. (2007). Enterprise resource planning (ERP): past, present and future. International Journal of Enterprise Information Systems (IJEIS), 3(3), 23-35.

https://www.igi-global.com/article/enterprise-resource-planning-erp/2123

Muir, J. (2018, June 2). The Big Interview With Venkatesh Pazhyanur of Unisys. Air Cargo Week. Retrieved from https://www.aircargoweek.com/big-interview-venkatesh-pazhyanur-unisys/