Going It Slowly: RFID and Air Cargo

Despite reservations across the industry about the use of radio frequency identification technology in air cargo, several of the express operators are forging ahead with the new technology for tracking. Already, TNT proudly announced last December it had completed a pilot phase and was ready to integrate RFID equipment into its existing systems for shipment tracking.

Outside the integrator camp there is decidedly less enthusiasm among air freight technology experts for RFID. "There is a lot of talk about RFID, but it's not yet proven technology," said Christopher Shawdon, vice president and partner of Logistics Solutions at Unisys. Traxon, the conduit for electronic data flow between some 3,000 forwarders and about 90 airlines, is not anticipating any impact from RFID on its architecture in terms of message standards or file sizes for the time being.

The go-slow approach contrasts sharply with a large swath of the logistics industry, where big retailers such as Wal-Mart, Target Stores and Germany's Metro have advanced ambitious RFID mandates for their suppliers and logistics providers have scrambled to help the shippers meet the demands.

In the air freight industry, a more immediate objective for shippers and forwarders is getting information in real time. Some airlines are there, but quite a few still have some way to go, according to Bob Scribner, senior manager of global logistics of Fairchild Semiconductor. "A lot of carriers are still struggling in that area. About 50 percent of our carriers are adequate to excellent, the other 50 percent are not there yet," he said.

The real-time information is most important to shippers and consignees when it comes to problems.

For most shippers - and, by extension, their forwarders - the focus is on exception reporting. They are far less concerned with regular status updates in a field where speed of delivery is supposed to gloss over deeper issues in supply chain management.

"We do only the exceptions. You can't trace every shipment. We don't have the time to do that," said John Mascaritolo, director of global logistics of electronics shippers NCR.

"Shippers look for exceptions. We work by exceptions," said Elio Levy, vice president of sales and marketing of New York-based forwarder Logfret. Like Mascaritolo, he finds it impossible to keep tabs on every shipment.

According to Scribner, demand for in-transit visibility increases the closer people are to the customer. He wants to see the exceptions but customer service staff want to be able to track every shipment.

Second to exception alerts come daily or weekly reports, as far as traffic managers are concerned. "A lot of people want regular e-mail updates every morning and alerts if something happens during the day," said Bob Imbriani, vice president of international operations of Winnboro, Texas-based forwarder Team Worldwide.

Shawdon says Unisys was surprised by the strong demand for full status history of shipments among users of the Cargo Portal System, the booking portal Unisys developed for carriers United Airlines, Northwest Airlines and Air Canada and which has since been rolled out to more airlines. CPS added functionality to display the full shipment history some 18 months ago.

Shipping managers and forwarders may not want to track every shipment, but they do use tracking services extensively.

At CPS, the tracking functionality is used six times as often as the booking function. That's although CPS users can only track shipments on the six member airlines via the site, a figure which is not likely to change.

"I think it will stay that way. You can go to any number of airline Web sites to track shipments. Syntegra's CCX.com gives you about 60 carriers. There's no value in adding that to the portal," Shawdon said.

Users' appetite for tracking information is going up. Traxon recorded a 26 percent increase in track-and-trace messages in its network during the first eight months of this year.

According to Florence Bocca, marketing and external communications manager, track-and-trace messages constitute about two-thirds of the electronic communication between carriers and airlines. "For one shipment only one air waybill message is transmitted, but then usually more than five status events are exchanged to trace the concerned shipment," she said.

A lot of this volume is generated in the framework of automatic status updates whenever shipments pass defined milestones.

Across its spectrum of access channels - from host-to-host to web-based access - Traxon offers three types of tracking service.

The basic "e-status" package enables forwarders to send status enquiries and receive an electronic reply from the airline. In the "e-status update" service, airlines send updates automatically whenever milestones are reached.

For airlines that are not able to generate proactive status updates, Traxon offers a third package where the network provider sends status requests to the carrier in question at regular intervals.

In the e-status update package, the forwarder can pick the milestones for which the company wants to be sent status information. Alternatively, the forwarder can choose to receive only alerts triggered when shipments fail to pass a milestone within a given time.

Although this service accounts for a lot of the tracking message traffic through Traxon, not everybody sees merit in having dense information. Logfret tracks shipments it wants to monitor through individual statues requests.

The forwarder's mainframe is not hooked up to Traxon. "I don't know if it would be a big advantage to connect our system with Traxon. Now we just have to key in the air waybill number. In a way, it would be nice to be linked to them. We could get automatic alerts if something goes wrong, but we have not really seen a need for that," said Levy.

The e-status update package and its lesser cousins cover the path of a shipment as long as it is in the hands of the airline but there are black holes when it is handed over to a third party, such as a trucker or a handling company.

Traxon offers an Internet-based software package which enables these entities to access a web page where they can enter the status information and transfer it to the airline through the network provider. Airlines can also use this module for in-house updates, Bocca says.

The customs interface tends to be more of a black hole for shippers and forwarders than is the handling and trucking arena. The appetite of customs officials for data has gone up sharply in the wake of tighter security regulations, but they remain averse to sending out information.

There is, however, a glimmer of light on the horizon. The Canada Border Services Agency is sending out electronic status updates on shipments in the clearing process to participating carriers. "CUSRES" messages are sent out by the CBSA to notify carriers about errors, risk assessment notices and acknowledgements.

A recent shipper survey conducted by Unisys, in which it polled 52 of the top 100 global shippers in terms of intercontinental transportation spend in person-to-person telephone interviews with senior executives, indicated shippers are impressed by the IT prowess of the integrators with real time information capability and are critical of the lack of IT integration across the supply chain in the forwarder-airline axis.

"Respondents indicated that the airlines and freight forwarders do not manage date entry very well 'on the other side of the world' - especially when something goes wrong," the study concluded.

From Bocca's vantage point, the debate about real-time status updates boils down to the question how quickly the carriers enter the data into the system once a shipment reaches a milestone. "The time from the moment when, for example, Lufthansa sends a message through our system to Schenker takes two seconds," she said.

Shawdon is not sure how many shippers really want their tracking information in real time, at least not when it comes to connections other than EDI. "You don't want to put too much information in real time on the Web," he says, pointing to potential risks for valuable shipments if outsiders gain access to the data flow.