Why cargo community system is more important now than ever before
How much value add is actually happening due to CCS? And what’s the outlook for CCS?
With air cargo increasingly focused across various verticals, data analytics and data mining technologies become important for all the players in the supply chain - shippers, freight forwarders and airlines.
"An Airport Cargo Community System (also referred to as Cargo Community System (CCS) is a neutral and open electronic platform aiding intelligent and secure information exchange between stakeholders. It is a crucial tool in optimising operational efficiencies and enabling digitalisation of the end-to-end air cargo value chain," says Kale Logistics, which has been the pioneer in the field.
Most of the global airports have CCS for a single window system to boost trade, and Kale offers collaboration to help stakeholders boost trade. "A single window system enables electronic communications in airports between private transport operators (airlines, agents, freight forwarders, stevedores, freight depots), the private vicinity (pre- and on-carriage, usually by road), importers and exporters, the airport authorities, Customs and other authorities," says the note from Kale.
"I think it is wrong to refer to a cargo community system as one specific and well-defined digital solution with a clear set of functionalities and a clear scope," says Steven Polmans, chairman, The International Air Cargo Association (TIACA). "For me, any form of digital collaboration or digital integration beyond the borders of a single company but benefitting a group of companies in a community can be referred to as a CCS. That being said, this also means you have a wide range of CCSs with limited functionalities to full-fledged, all-including IT systems.
"It is important that each community and all its stakeholders acquire those functionalities they need or where they could benefit from. And these functionalities may grow over time, depending on the maturity of the community, the vision of the community as well as the operational needs.
"The business case for me consists out of two important factors:
* Financial benefit because of a more integrated and smoother operational logistical chain saving direct costs; and
* A smarter community because of the insights generated and the data available, giving companies the opportunity to offer a better service or optimise assets, again resulting indirectly in a higher efficiency and cost saving."
With one crisis after another hitting the supply chain, there seems to be no respite for players, and the air cargo industry is no exception. "Today's supply chains are very fragmented and disparate," says Vineet Malhotra, Director & Co-Founder, Kale Logistics Solutions. "In order to support sustainable growth in the logistics industry, it is of paramount importance that the right physical and digital infrastructure is put in place in the country that can facilitate the ease of doing business. As per IATA, each air cargo shipment, on average, carries around 30 types of documents and well over 100 copies resulting in significant documentation overheads, increased dwell times and supply chain opaqueness.
"Cargo Community System is an electronic platform that can allow the reusability of data, thereby eliminating duplicate data entry, reducing unnecessary paperwork by giving authorised access to data to the relevant supply chain stakeholder and bringing supply chain visibility, thereby reducing inventory and other transaction costs related to cargo movement. There is a lot of impetus from national governments, global bodies like the United Nations, IATA, IMO, TIACA, WTO and WCO to have CCS in place to build the logistics single window framework for nations. A fully developed and operational CCS can ensure fully functional global supply chains during pandemics and other uncertainties."
The CCS has helped Amsterdam Airport Schiphol make the processes seamless and sustainable, says Luc Scheidel, Cargo Network Director, Amsterdam Airport Schiphol. "Our ambition is to be a competitive and sustainable cargo hub."
There can be various reasons for implementing a cargo community platform, which will depend on the operational reality of the airport community, says Jean Verheyen, CEO, Nallian. "Some will be facing congestion issues, others need more visibility and transparency in their processes. Often there's a desire to operate in a proactive, efficient way to deliver better customer service and attract more business. This requires process alignment between the different stakeholders at a cargo hub. This being said, at Nallian, we don't think this is only solved by what is typically referred to as a cargo community system.
"Whereas our Cargo Cloud supports a community-wide approach, we also offer solutions to individual actors who wish to improve and digitise their cross-company process. The approach is similar to a community approach, only the network is on a smaller scale."
Sébastien Claerhout, Digital Transformation Manager Cargo & Logistics, Brussels Airport Company, adds: "At Brussels Airport, we are a frontrunner in applying and deploying digital tools for our cargo community partners through BRUcloud, which offers an impressive amount of 11 applications (and more to come) that are used by more than 70 companies. Main example is a combination of four apps to digitise the landside management process that we call the digital green lane which is fully being rolled out at the moment."
The advantages of these digital tools are two-fold:
* Environmental: it allows us to evolve to paperless operations and it will reduce waiting times of trucks at the ground handlers as well as the movements on a cargo zone
*Economical: Improve the operational efficiency of the stakeholder's operations, thus reducing costs and increasing the cargo capacity within the existing infrastructure (e.g. providing transparency & insights on specific activities through dashboards); and cover a part of the resource gap (staff scarcity) and remove low value manual activities which can be replaced by digital solutions."
Challenges of CCS
Nallian, which operates with a tagline operate as one, lists out four key hurdles to build a connected cargo system. The hurdles include - one-size-fits-all does not work, different digital mindsets, compatibility issues with existing systems and technology being seen as the solution for all the challenges.
Resistance across the supply chain - fact or imagination?
"I am not sure "resistance" is the right word," says TIACA's Polmans. "I do think there is still a lot of misunderstanding on what a CCS is or should be or could be. The fact that you also have to invest in something that benefits not just you as a company but is for the better for many stakeholders is often an issue. A CCS needs a minimum of vision and looking at the bigger picture, realising there is much to gain for individuals companies too by using a CCS. The more you contribute to it, the more you will get out of it."
Digitisation is a journey and not a destination – organisations need to understand this very clearly, says Kale's Malhotra. "The most complex issue is standardisation of processes across the industry. Global supply chains involve multiple stakeholders and they often use different systems. Some still use paper-based documentation and tools such as Excel and others, who are further along the digital transformation journey, find themselves using disparate systems or solutions that are not a fit for their business goals."
Benefits are both tangible and intangible for the cargo community – tangible benefits are savings of an estimated $2.5 million- $16 million in direct trucking costs annually as a result of reduced man hours and fuel and operational efficiencies, adds Malhotra. "Truck dwell time is reduced by an average of 38 percent. CO2 emissions would be reduced each year by 80-512 metric tons based on the time savings scenarios. For solution providers like us, the ROI comes only when the entire community is activated. Therefore, we insist on 100 percent adoption- not just for 100 percent information sharing but only revenue coming from the community in the most optimal way."
Case studies for CCS
"Yes, we have the case study of Mumbai International Airport and Atlanta International Airport," says Malhotra. "Mumbai International Airport has been running on Kale's CCS for more than a decade. This is a classic case of how an airport can transform into a cargo hub despite limitations to physical expansion of the facility (as the airport is in the heart of the city). Cargo movement is extremely well coordinated with advance shipment notification, there are no queues at the counters and truck congestion at the gates has reduced by 75 percent. Shipment data accuracy is now 95 percent. The airport has logged a 30 percent year-on-year increase in international cargo volumes of over 5 million tonnes of cargo handled in FY22.
"Atlanta Airport was the first airport in North America to implement Kale's CCS in 2019. By using digital tools, the Atlanta Airport Community, which is powered by Kale's digital solutions, has saved nine tonnes of CO2 from being processed since the beginning of 2021 - the equivalent of planting more than 400 trees."
Verheyen lists the gains reported by Brussels Airport and Dallas Fort Worth including reducing waiting time for trucks and lesser need for trucks to complete the assignments.
CCS future, improvements
"I am convinced that there is a big future for collaboration, and CCS is a great tool to manage this collaboration between a group of companies in a very phased approach," says Polmans.
Malhotra is very bullish on the prospects: "CCS have grown to the third generation now. What started as simple portals enabling EDI messages are now powered by Blockchain, Artificial Intelligence, Machine Learning, Big Data and mobile-friendly apps. These will evolve to connect to global networks and more comprehensive platforms like digital trade corridors, logistics e-marketplace and sea-air corridors. As these CCSs will integrate with different verticals and industries, we will witness a well synchronised global value chain."
We see a growing appetite for digitalisation and collaborative processes, which accelerated during the pandemic, says Nallian's Verheyen. "We expect that the possibility for individual actors to move ahead without the need of the community as a whole to move at once might accelerate the uptake of a community-wide approach. Equally so, a growing willingness to share data and collaborate will help moving towards the creation of a digital twin of each shipment with data being captured and shared throughout the entire shipment journey. In the future, we will evolve to a 'hub of hubs', where different digitised communities will connect and share information."
"We are renewing our CCS (we call it a Port Community System) Cargonaut," says Schipol's Scheidel. "This is an important enabler to make the necessary process improvements in the next few years. First step will be to make sure that all relevant data is available. Next step will be to make the process plannable and introduce time slot planning for delivery and pickup of cargo at landside."
Nathan De Valck, Head Of Cargo Product & Network Development, Brussels Airport Company, adds a push is needed by the airport or a dominant operator to perform a switch to a digital solution and reach the long-term benefits of having a CCS. Biggest upcoming improvements are most likely to be providing real-time visibility of the processes & traceability of freight (e.g. via IoT, RFID, etc.) to different stakeholders active in the community; and data sharing between stakeholders and other hubs.