"Paperless" airfreight around the globe still remains a dream today, but IATA troubleshooter Philippe Bruyère is trying to get a paperless pilot scheme going by 2010.

When IT first emerged from being solely the domain of governments, military and multi-billion-dollar companies, one of the great promises it offered average businessmen can be summed up in what is now a rather loaded word: "paperless". In the years since, we've managed to get a computer on virtually every desk top - but it is a standard joke in most IT departments that the computer has created more uses for paper than ever existed before that rather lame promise to eliminate it.

But it would seem the situation is at last starting to change, and some of that promise is being fulfilled. The pundits now use the term "paper free" rather tha "paperless", and acknowledge that there will still be a need for paperwork in some processes. Even in its modified form, the "paper free" dream is still a long way from being universally realised - but there's no doubt it is entering the real world, and many industries are looking again at how they might actually make this dream work for their benefit. The airline industry was a very early adopter of IT, and indeed these systems are now as essential as staff and aviation fuel in keeping an airline functional.

Albert Lo, Manager for Cargo Services at Cathay Pacific Airways Limited, has been in the business for many years, and says airlines have always been keen on using IT. "We started all kinds of automation many years ago. In fact, in 1968 when I got into the business, we were already speculating on how to create a paperless business," he said.

That was nearly 40 years ago, and there's no denying that today we are easily able to buy "virtual" airline tickets online and check in with just a simple printout from our home PC. Moving passengers "paper free" has not proven to be a big problem for airlines once they get a few essentials in place. But air cargo is another matter entirely - and it's becoming a very important issue for airlines, and all companies affected by the rapid and radical developments in the logistics industry.

The air cargo sector of the airline industry was originally insignificant, but in recent time efficient aircraft, freight management systems and the whole supply chain revolution have made it a booming growth area - and one which is proving a bonus to airlines operating their passenger services on the finest of margins. Despite the fact that IT systems are widespread in the air cargo industry, so far there has yet to be anything like the improvement in efficiency in the passenger carrying sector.

Giovanni Bisignani, the CEO of International Air Transport Association (IATA), recently summed up the issue - and the problem. He pointed out that 33 years ago it took, on average, six-and-a-half days to move a cargo item by air from one place to another - and that didn't include flying time. In 2006 it still takes six days to move that same package - an improvement in time saving of just 7%. Both airlines, and all those involved in any way with supply chain management, are calling for big changes - and they want them fast.

But although the global air freight industry agrees that there must be significant improvements, agreement on the changes and implementation are an entirely different matter; and it is well understood that the issues, problems and requirements will vary from country to country. It is also obvious that governments around the world - and in particular their customs departments - must cooperate, and that alone is a major undertaking.

IATA feels confident that, as the main unifying organization in the air freight industry, they are the ones who can and should be driving the IT revolution that's required. In November, 2005 Bisignani announced to the international air cargo industry that IATA intended to implement an "e-freight initiative," a project that aims to have most businesses - large or small - that are involved in any way with the air cargo supply chain throughout the world going paperless by 2010. This announcement, and the whole initiative, had been developed in close cooperation with all sectors of the air cargo industry, so it's perhaps not surprising that despite the major challenges to be overcome the proposal immediately received great support.

Philippe Bruyère, the Programme Director for Simplifying the Business at IATA, is the man who has the gargantuan responsibility of making it all happen. In an email exchange he explained what IATA is trying to accomplish, and how they're going about it - and emphasized that governments must be involved and supportive if the e-freight initiative is to succeed.

"The scope of e-freight is focused on 'paper free,' which can be defined as an environment in which industry does not need to transport paper in parallel with the freight, but there may be a requirement to produce this paper in original, copy or printed e-document form for some authority or process," said Mr Bruyère. "The whole project is government dependant and customs driven, so in order to manage countries and governments we have identified 3 country segments together with qualification criteria. The first wave is for those governments willing and able to participate in the pilot schemes to test all standards, processes and technical solutions in an operational environment. Hong Kong is a prime candidate. We hope to conclude agreements with those governments in the months ahead. Such pilot schemes will lay the foundation for e-freight for the second wave of governments that are actively working on customs modernisation programmes but are not able to work with IATA during the 2007 timeline."

Mr. Lo believes Hong Kong is in a good position, and Cathay Pacific is already well prepared. Several years ago, Unisys were involved in a project with Cathay Pacific known as Cargo 2000. Unisys did a thorough study of what was needed and came up with lots of ideas and suggestions for how it could be implemented. Unisys created what it called the master operating plan (MOP). Mr. Lo said one must remember that this is fundamentally different from what the likes of UPS or FedEx do. "If you look at UPS or FedEx, those companies do everything; they have trucks, planes, handlers and they do it all. So for them it is much easier to handle these things. The real problem comes with the handover from one company to another," he said.

Because UPS can control the entire process, it can know reasonably accurately where a shipment is (and this also allows users to trace their eBay or Amazon packages over the internet). With nearly all other kinds of shipment, however, the goods go through a number of hands and different companies, not to mention Customs.

Mr. Lo said Unisys were able to halve the number of steps it took to move something from one place to another.

"Handover always takes away resources and slows down the process. Unisys found that at that time the process took 40 steps. After various adjustments, they said they could bring it down to 19 steps. In order to do this, you need a platform where all the participants can deposit, retrieve and share the data. There is no magic here, really," he said.

Although Cargo 2000 is not the same as IATA's e-freight, Mr. Lo sees no inherent contradiction here. There is a great deal of overlap and things can be easily altered to meet any specification.

Unisys also came up with the Common Data Management Platform, which records all the steps in transporting air cargos from shippers to consignees.
"When you look back, it will be seen as complementary to the Digital Trade and Transportation Network (DTTN). It is very much an airline or an airfreight DTTN for special purposes. How do you communicate with this system? You need standard messages. We are not creating new messages, we are using those created by IATA which are already there. We use this to record all the steps from the time it leaves the shipper to the time it is delivered. All this information is shared by all the parties," he said.

Generally speaking, globally the biggest problem in all this is not in fact the companies, but government, in the form of Customs. For them, the move to "paperless" is extremely difficult to deal with. The reason for this is simple enough, according to Mr. Lo: Customs still needs paper if it wants to prosecute somebody. It can happen that most companies along the chain are quite happy to deal with electronic data, only to find they get stopped by Customs because they "need" paper.

Hong Kong, it would appear, is doing well in this area. The US government has implemented a series of strict regulations on cargo paperwork since the attacks of 9/11. Hong Kong Customs procedures are far more liberal.

"The law requires us to send data to Customs, but it is not as rigid as the US. Our Customs Department has the Air Cargo Clearing System (ACCS) where they send the data before the plane lands. Our agreement is that all the data arrives one hour before arrival," he said.

Mr. Lo said there was an added problem for Customs because ever since the September 2001 attacks in America, Customs has also had to become something of a policeman as well. This puts a little more strain on what they have to do.

IATA does not believe any single country is there yet, but some are moving in the right direction.

"Currently no government has the legal framework, technology, and business framework in place that fully allows IATA e-freight to operate. Our Board has asked us to achieve commitment by the end of this year for e-freight trials on key trade routes in five countries in 2007," said Mr Bruyère.

Hong Kong, of course, is one of those five.

Despite all these digital initiatives, Mr. Lo was keen to remind us that it will be a long time before some of the human energy will be replaced. Despite everything, we still rely tremendously on people to move things.

"You know, everybody says the integrators are at the high end of technology but as a matter of fact that is not true. If you could see the integrators, you would see that they employ hundreds or thousands of people at a time to move things. Humans are far more reliable than any machine at the moment," he said. If a machine was only 80% accurate, he said, that would be a disaster.

Nevertheless, it seems that the movement to electronic data is inevitable. Hong Kong is in an ideal position because it has an IT-friendly government; it has only one airport; and it is in one of the greatest geographical positions there is: right next to China, the world's centre for manufacturing.