06 Nov Laying the foundation for a tech enabled future with Digital Freight Corridor
Trade has long been a driving force of economic growth. New production systems, integration of global value chains and trends toward reliance on just-in-time delivery systems mean that more than ever, trade needs to be faster and more reliable. This calls for increasing the quantity and quality of information exchange. Digital connectivity and data flows are supported by hard and soft infrastructure, ranging from cables and wires to data flow regulations, which enable trade transactions.
Thinking beyond community platforms
Cargo Community Systems (CCS) or air cargo software solutions have been on the raise to bridge this gap. Airlines, Ground Handlers, Freight Forwarders and Customs Brokers have widely chosen CCS to enable 360-degree digitisation. With such efforts, thousands of paper copies were eliminated in major Airports globally. Also, truck congestion and lack of visibility were sorted seamlessly. Operational efficiency too has increased compared to the pre-digitisation period. With all this, the utility of cargo community systems/cargo software solutions are soaring in all Airports worldwide.
But a cargo software solution comes with some limitations as it has geographical boundaries and to overcome the same and achieve larger synergies globally one has to think beyond cargo community systems and cargo software solutions. This brings us to the future of cargo community systems i.e., Digital Freight Corridor.
A digital freight corridor between two countries enhances shipment visibility and optimises flow of cargo data. The collaboratively created digital corridor facilitates flow of information within the stakeholder chain and optimises cargo visibility across the stakeholder network. These digital data corridors can evolve from connecting one cargo network like airport community in one country to airport community in the other country. These hubs can connect multiple countries using the simple principle of data federation and trust.
Benefits of Digital Freight Corridors
Optimal Data flows
With the quantity of shipments increasing, they add up to the complexities and thereby bringing down the quality of cargo movement. In the midst of this shipment handling, managing data flows and analysing the incoming data takes a backseat.
The added connectivity between the digital corridors of different Airports increases the quantity and quality of information exchange, digitalising Logistics services, and regulatory border controls and easing trade. Therefore, analysing the data and sharing it among the stakeholders is well facilitated.
Trade visibility
Real-time visibility is a well-known benefit of the Digital Freight Corridor. Stakeholders in the import, as well as the export country, can have and request information before the cargo’s arrival and departure. The movement of cargo within the Airport ecosystem can be tracked at every milestone at a micro and macro level.
Transparency
While visibility is the most revered benefit, transparency is something that requires more focus. As the digitisation drive is pretty well penetrating within all industries, it is seen that transparency is the main factor why several of them tend to go digital. Hence digital document exchange is the prime factor in ensuring transparency in trade.
Sustainability
Climate change and Global warming are reportedly becoming a reality and several global bodies are pushing organisations to adopt sustainable practices. The Digital Freight Corridor is a one-stop solution to enable paperless trade and reduce documentation norms.
Improved efficiency
With delays at every checkpoint, moving one container within a Port ecosystem consumes a lot of time. Hence, the experts in the industry believe 5G can be a game-changing initiative to improve operational efficiency and achieve positive business synergies. Attaching a low-cost asset tracker to shipments, pallets, or individual assets can provide precise location and temperature data. Connecting asset trackers over a cellular network provides superior security over proprietary and other IoT standards.
Faster turnaround
Blockchain comes with a new level of connectivity that improves faster speed and lower latency in the logistics ecosystem overall. It can trigger the advancement of data and information systems, thereby building an efficient and robust operational flow. Especially, Shipping Lines focusing on shorter vessel turnaround time will have a lot to leverage from Blockchain.
Real time data analytics
Airlines, Forwarders and all others involved in the trade always look for milestone updates on freight movement. Blockchain moves the process to the next level by analysing motion and environmental data from large Port parts. This will yield predictive data in a much more comprehensive manner to anticipate demand shortages, etc. Therefore, stakeholders can quickly set a strategy to void discrepancies.
Reduces cost
The first and foremost benefit of having a corridor connecting two or more airports is that the cost of transporting cargo from India to Europe will reduce significantly. Several countries have an agenda of reducing logistics cost by less than 6 per cent and that will be made feasible with this initiative. Moreover, other countries involved in this initiative too will benefit by further reducing their logistics cost.
Time saving
Moving cargo from India to Europe through shipping consumes four to six weeks on an average. Ironically, the days could even be higher depending on the destination. In order to address this, India is building a combination of railway and seaport connectivity. By doing so, it is believed that weeks could eventually reduce to a few days accounting for faster cargo movements across continents.
Zero Cyber Threats
For a long time, the Logistics industry has been concerned about one aspect of the trade, i.e., cost saving. While many tend to cut costs by laying off their workforce, there is always a capacity to cut high costs when it comes to operations. By automating some of the mundane processes and eliminating paperwork, stakeholders can save enormous costs. However, several stakeholders believe that going digital will increase their risk of being prone to a cyber security attack.
Boosting Cargo Throughput
85 per cent of the time air cargo is waiting to be processed all the time. Moreover, this on average is a global phenomenon. If waiting times are streamlined across airports with single source of data, online documentation, pre-arrival notifications, advance truck slot management, e-approvals, and secured e-payments stakeholders can increase their cargo throughput by 50 per cent, say industry experts. With direct communication nurtured between two airports, boosting cargo throughput is far more seamless.
Why is it essential?
The need for continuity in the flow of data from the shipper to the consignee across these modes is naturally required. Digital air freight corridor aims at creating a completely transparent supply chain through the exchange of real-time status of shipments between two Airports and the exchange of shipment data to eliminate duplicate processes. For example, shipment arrival information can be shared in advance with the rightful stakeholders in the destination Airport so that the Customs, Handlers and other stakeholders are well-informed and prepared to handle the incoming freight on time.
Role of Blockchain
Various cloud solutions and multi-modal service providers offer Digital Air Freight Corridor that is based on the framework of Blockchain and iShare. This framework enables all players in the community to connect with each other on the basis of mutual trust, irrespective of type, size, modality, and jurisdiction.
iShare is not a technology platform through which data flows can be managed It is a framework of agreements on the identification, authentication, and authorisation of actors. The framework delivers a transformational level of maturity in the way stakeholders share data with other partners and partners of partners that they may not know.
iShare based Digital Air Freight Corridor between Mumbai and Schiphol
The world’s first digital air freight corridor between Mumbai and Schiphol airport was conceptualized in 2018. This digital corridor aims at creating a completely transparent supply chain in the first phase through exchange of real-time status of shipments between India and the Netherlands and in the second phase exchange of shipment data to eliminate duplicate processes.
Based on the framework of iShare which enables all players in the community to connect with each other on the basis of mutual trust, irrespective of type, size, modality and jurisdiction. iShare is not a technical platform through which data flows; it is a framework of agreements on identification, authentication and authorisation of actors. The framework delivers a transformational level of maturity in the way stakeholders share data with other partners and of partners of partners that they may not know.
Similar global initiatives
The G20 summit concluded successfully at New Delhi, India on the first week of September 2023. A record 79 resolutions were passed and that accounts for the largest in the history of G20. The most salient feature of the summit was the trade corridor announced. Apparently, this corridor is said to involve rail and maritime connectivity from India to Europe through Middle East. Interestingly, the corridor is said to have a potential to speed up trade between India and Europe by a whopping 40 per cent. World leaders consider this as a beacon of cooperation, innovation and shared progress.
Laying the foundation for a digitized future
When the industry began choosing digital platforms during the pandemic, experts in the industry predicted that digitization will be the new normal. As on date, the rapid technology adoption taking place in the industry is a testimony to these comments. Even the geographies where technology adoption has been sluggish, now adoption is becoming rapid. Therefore, the foundation laid for digitization is strong and going digital is the new normal at least for the logistics industry. Hence the demand for cargo software solutions will be high in the coming days.