Allow me to introduce you to air freight and how SAP Event Management can help in the scenario where air freight is used as a shipping method.
Air freight returns large revenues and is second only to water-based shipping. In 2010, net revenues of 67 billion US dollars were expected in air cargo and the airlines themselves were expected to carry 51.6 million tonnes of cargo in 2013. Cargo is an important revenue source for many airline companies. Cargo amounts to 13% of the total air traffic revenue globally. Some passenger airlines carry cargo in the lower hold below the passenger deck, and others are dedicated cargo airlines. In many intermodal and multimodal transportation scenarios, the goods are shipped in trucks, then in ships and then in trucks again to reach the destination country. Some niche products, such as those with a short shelf life, high value products, urgent deliveries etc. are shipped via air cargo to reach their destination within a day or two.
The routes flown are typically handled by single or multiple airlines to reach the destination airport. After customs clearance, the goods are transported by truck for delivery to the customer. Air cargo presents many challenges, and includes multiple stages and hubs, different loading requirements, different customs requirements in international airports, multiple handling costs, customs duties and the arranging of third party transportation after customs clearance in the destination country.
What is Unit Load Devices (ULD)?
Goods in air cargo are loaded and carried on various pallets and in containers known as Unit Load Devices (ULD). These Unit Load Devices are specially designed for air cargo to enable safe and simple methods to store, load, transport, and unload the goods. ULD specifications feature different sizes based on the attributes and characteristics of goods that they will hold. If goods are sent weighing 100 kg, the ULD does not only hold the goods of one customer, but also carries other goods. Until the air cargo company updated the data on their website, goods tracking does not show details such as goods stuck in customs clearance, lying in the first or a hub terminal, reached the destination airport and so on. Therefore there is a reliance on both the air cargo company, and accurate data.
Baggage Reclaim scenario
You may have unfortunately experienced the familiar scenario of your personal baggage going missing. When you contact the airlines, they would have told you that they are trying to track the baggage and hopefully the result of their tracking is that you receive the bag after 5 or10 or 20 days. But sometimes it is possible that you never receive the baggage. In this case, the airlines say that they are unable to trace your baggage and you receive financial recompense for the lost baggage. These scenarios happen quite often with airline cargo due to the lack of track and trace availability of personal baggage or goods. The sender of goods has to rely on purely on the freight forwarder or a third party update with a tracking number or airway bill number.
Stages/Milestones in Air Cargo
The below are the stages through which goods pass through in air cargo.
- Air carrier booking request
- Air carrier booking confirmation or rejection
- Air carrier booking cancellation
- Air carrier booking reschedule request
- Collection from shipper
- Receipt at forwarding warehouse
- Print air waybill (AWB)
- Air cargo gate-In (Airline warehouse)
- Air cargo custom declaration submitted
- Air cargo custom declaration accepted
- Air cargo custom declaration rejected or resubmitted
- Air cargo shipped on board
- Air cargo departed departure airport
- Arrival at the 1st airport
- Departure from 1st airport
- Arrival at destination airport
- Arrival at destination airline warehouse
- Notification to freight forwarder
- Freight forwarder submit customs document
- Dispatch to freight forwarder or 3rd party warehouse
- Deliver to customer (Proof of delivery, or POD)
Wow! These many events occur in air cargo when we send goods to a customer. If anything unexpected happens in-between these events, the customer may never know what has happened to a particular air waybill until they request the information from freight forwarder or 3rd party logistics. When proactive shipment monitoring has not been enabled it can lead to deadlines being missed, costly fines and customer dissatisfaction due to the goods not being delivered on scheduled or guaranteed dates.
SAP Event Management
SAP Event Management solves most of these issues we have discussed. It can automatically monitor planned routes, dates and milestones.
Upon completion of each milestone, the reported event updates in the system when the freight forwarder, carrier, shipper or consignee sends the data to SAP Event Management. Any unexpected delays or processes overdue can trigger an alert, email or SMS to the relevant team to address the issue immediately.
Customs declarations can also be submitted on time to track-and-trace the events that are happening on time, and if there are any deviations, then it is possible to trigger an alert to the customs documentation team to take immediate action in order to bring the shipment back on schedule.
If second or third stage milestone flights have been cancelled due to bad weather conditions then SAP Event Management will alert the shipping teams to secure new cargo space on the next available flight.
Here are some other high-level examples of what is possible with SAP Event Management:
- Adjusting subsequent milestones when there is an unexpected event or delay on reported events
- Track and trace the end-to-end route through SAP Visual Business Geo Map Integration for a shipment.
- Extract the causes of delays and unexpected issues data in SAP Business Intelligence and publish it to key stakeholders
- Monitor shipment performance and report frequent causes of delays in air cargo
- Proactively manage exceptions and alert each milestone to the relevant teams