Amit Mitra

As several airline operators increasingly incorporate IT solutions into cargo operations, more IT companies are offering sector-specific solutions.

With air cargo operations expanding in India, airline operators in this segment are increasingly taking to IT solutions for quick, efficient and transparent delivery systems. Until a few years ago, the entire gamut of air cargo operations, from booking of cargoes to delivery, was performed manually. But today, several airline operators, including Indian, have increasingly incorporated IT solutions into their air cargo operations.

Industry estimates indicate that globally air cargo operations fetched a total revenue of $52 billion in 2005 and about two per cent of this ($1 billion) was spent by the airlines on IT solutions. As the trend gathers momentum, there has been a mushrooming of IT companies offering solutions to air cargo operators.

In India, several IT companies have come up to provide specific solutions to air cargo operations. For example, while Unisys, Kale Consultants, IBS and CargoSpot specialise in reservations, Mercator and Sabre have expertise in revenue accounting, EzyCargo and CPS are cargo portal providers, Manugistics' area is revenue management, Lufthansa IS and Magic are engaged in ground operations and Traxon, Fountainhead and FreightData in forwarder solutions.

"The list is growing and this is good news for the air cargo industry. Very soon we will see better profit management solutions, portal-based solutions in which users can connect and use, mobile computing, and Web solutions that allow customers to directly access information and e-freight," said Mr Peter O' Sullivan, senior vice-president of Kale Consultants.

Indian optimising processes

Indian, the country's largest cargo carrier with a network capacity of 1,000 tones per day and covering 63 destinations in the domestic circuit, took a major leap towards IT solutions in June 2005, tying up with Kale Consultants for this purpose. By June this year, three of the airlines sites — Delhi, Mumbai and Chennai — went live, followed by Kolkata, Hyderabad and Bangalore in August, and Pune, Ahmedabad, Nagpur and Trivandum in October. "By next month, we plan to cover 41 locations and by January 2007 about 17 international locations. In the first quarter of 2007, we will complete the airline's interface with Indian Customs," Mr Sullivan told Business Line. The airline deploys a fleet of seven wide-bodied Airbus A-300s, 36 fly-by-wire Airbus A-320s, 11 Boeing 737s and three Dorniers.

The airline lifts a wide variety of commodities, which include perishables (such as vaccines, fruits, vegetables and flowers), livestock, valuable cargo and general cargo commodities meant for exports, such as readymade garments, machine parts and mail.

"The entire cargo operation that was earlier managed manually is now totally automated. Shippers who demanded reliable information in the supply chain can now track their shipments on the Internet. Also, the airline can now streamline the process and optimise its revenues by effective use of the capacity and allotment features.

"Deals, agreements and managing business of partner airlines and other strategic partners would help Indian to enhance its services. What is important is that Indian can monitor and control the domestic rates and charges and take immediate decision on the market changes," Mr Sullivan explained.

E-freight initiatives

The airline industry has taken some initiatives in the last few years to adopt IT solutions, notable of these being Cargo-2000 and e-freight. Says air cargo analyst Ms Bhavneet Sraw: "The process, however, has been slow. It has to be noted that in air cargo transportation, the cargo is on the ground for more than 85 per cent of the transportation time. Therefore, the information flow needs to be smoothened throughout the cargo chain and partner networks."

A few years ago, the CEOs of IATA member-airlines led an industry initiative to improve air passenger and cargo operations, with e-freight being one of the five projects identified. The industry estimated that implementation of these projects could result in an annual saving of $ 6.5 billion.

The concept of e-freight involves replacing paper transaction during the air shipment operation with an electronic message.

"A typical international air-cargo shipment generates more than 30 documents at a cost of $30 per shipment. An average shipment delivery time is six days. Reduction of cost of paperwork alone is estimated to result in a saving of $1.2 billion annually for the industry," according to an industry representative.

The e-freight initiative is being actively pursued by the industry, with full support of the IATA Director-General. It will take some more time before the industry is able to get the full benefits of e-freight, but it is surely moving in the right direction.

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