When it comes to international air cargo, nothing is as complicated as making things simple. That's what the founders of Cargo 2000, a non-profit interest group under the Montreal-based International Air Transport Association (IATA), found when, in 1997, they tried to bring the entire international aircargo industry together to agree on standards for electronic documentation and tracking information.
Cargo 2000 co-founders Ron Cesana and Guenter Rohrmann thought they had a great idea. Electronic commerce was a clear business inevitability. Shippers were already complaining that their aircargo forwarders and carriers couldn't provide the kind of door-to-door tracking information they had come to expect from express package carriers like UPS and FedEx.Why not get everyone to agree on what technology to use and how to use it? And get everyone on the same page from the beginning, before carriers and forwarders had invested in incompatible systems?
As Cesana and Rohrmann envisioned it, shippers, forwarders and carriers would agree on a set of transport milestones and units as well as a set of security codes that would be exchanged in a shipment's journey from sender to consignee. MO1, for example, would be "freight collected from shipper and has arrived at freight forwarder's facility"; S02 would be "shipper's [security] certification number." Once the system got off the ground, so to speak, all parties involved in aircargo shipping would exchange information not just on pallets and shipments, but on individual items. It seemed simple enough.
Except it wasn't. Right from the beginning, Cargo 2000 encountered unexpected turbulence. There were technical problems in trying to reconcile competing standards and languages for the electronic exchange of information (Cargo 2000 favors the ANSI FACT and EAN SSCC data-coding standards recommended by the International Standards Organization). There were political difficulties—small forwarders objected to being held to standards they hadn't helped create, large forwarders groused about the slow pace, shippers complained that they didn't have a voice.
Most serious of all, there were cost problems. "In the beginning, we wanted to take a Big Bang approach and get into controlling everything at the bar-code piece level," recalls Cesana, Cargo 2000's project director, based in Westport, Conn. "We looked for a technology provider who could do that. But when we got to the point of selecting one, half of the members said they couldn't afford it and walked out. It nearly killed us."
Faced with a revolt, Rohrmann and Cesana retrenched. As the year 2000 dawned, they abandoned their grand vision to concentrate on what could be thought of as Cargo 2000 Lite. Instead of choosing a technology vendor, they would let airlines and forwarders choose their own. Instead of putting the full operating plan into motion at once, they would adopt a much less ambitious phased-in approach.
A long, hard slog
It's taken nearly five years, but today, Cargo 2000's founders can finally point to visible signs of progress. The first phase, post-shipment audit of airport-to-airport movement at a master air waybill level, is in effect at 250 locations, involving service in 65 cities and 4,000 individual trade lanes worldwide. Once a booking is made, a plan is automatically created with a series of checkpoints against which the movement is managed and measured. This enables the system to alert the Cargo 2000 member if any exceptions arise. Phase Two—which involves the interactive monitoring of the door-to-door movement of shipments at the house waybill level—is ready to go, with two as yet unnamed Cargo 2000 members implementing it.
That's not the only sign of progress. In a stunning turnaround, some of the defectors have begun straggling back. In May 2004, Singapore Airlines (SIA), one of the air carriers that walked out in 2000, announced with a fanfare of publicity that it was rejoining the Cargo 2000 initiative. Not only did SIA return, but it sent one of its high-ranking executives to Cargo 2000's July conference in Singapore to talk about its corporate change of heart. "Why are we returning?" asked Sudheer Raghavan, senior vice president of sales and marketing at SIA Cargo. "[We're returning] because there's no alternative to collaboration; the reasons for leaving exist no more; the new team at Cargo 2000 means business; and we subscribe to any serious effort to improve service and efficiency in the industry. Cargo 2000 today is focused on that. It has SIA Cargo's support."
The team that means business includes a new chairman, Mick Fountain, chief executive of Exel's global technology and freight management division, based in San Francisco. When Fountain talks about Cargo 2000, he makes it sound more like a religious calling than a business endeavor. "You have to understand the magnitude of this," he says. "The objective of Cargo 2000, which is a very noble one, is to become the accepted platform for shipment information all over the world—for airlines, logistics providers and customers." Fountain considers the support of the shipping community, as yet largely uninvolved in Cargo 2000, to be absolutely crucial to the initiative's success. "It's obviously the right thing to do to bring some sort of order to data management in the aircargo industry. It will make the world a lot better for the shipping public."
In another apparent vote of confidence, Descartes Systems Group, a Waterloo, Ont.-based logistics technology company, has christened its air-cargo tracking service Cargo 2000. As yet, this is used only for communication between forwarders and carriers, but Allan Harsbo, senior vice president for air cargo at Descartes, argues that shippers are already benefiting.
"It doesn't involve shippers directly," Harsbo concedes, "but you may say that there's an impact on the shipper in the commercial sense. ... This initiative is the first one that brings the carrier and the forwarder close together. The result will be that the shipper or consignee will get a close to perfect product, and in that sense it involves the shipper. So I see it as a large step forward."
Coming in from the cold
In any event, shippers won't be out in the cold for long. Phase Three of Cargo 2000, where cargo will be tracked door to door in real time at the piece level, will definitely involve shippers. But Fountain wants to take some time to build credibility with shippers before rushing into it. For him, that means gathering information about the service providers' on-time performance and making it public—a delicate subject among the group's membership. Cargo 2000's 18 airline members and nine forwarder members have traditionally kept the data confidential, even from each other.
But Fountain's undaunted. Though he says he doesn't want to take anyone's pants down in public, he's convinced that a performance score sheet is what it will take to get shippers on board.
"[The] one thing that will get Cargo 2000 going faster than anything is shipper recognition," says Fountain. And though he dreams of the day when shippers will automatically open the aircargo bidding process by asking 'Are you Cargo 2000 compliant?', he acknowledges that it's an ambitious goal. "This is a very fragmented business.Not everybody is able [to or] wants to get behind it," he says. "But someone's got to do this stuff. [Otherwise] nothing will ever get done, and shippers will still be complaining in 10 years' time."