Airline cargo Operations

A Study- Increasing Efficiency in Airline Cargo Operations Using Smart Devices

by

Rudro Mukherjee

13P037

Under the guidance of

Shri Jayant MehtaAssociate ConsultantInterglobe Technologies

Management Development InstituteGurgaon 122 001

June, 2014

A Study- Increasing Efficiency in Airline Cargo Operations Using Smart Devices

by

Rudro Mukherjee

13P037

Under the guidance of

Shri Jayant MehtaAssociate ConsultantInterglobe Technologies

Management Development InstituteGurgaon 122 001

June, 2014

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Certificate of Approval

The following Summer Internship Report titled "ABC ..." is hereby approved as a certified study in management carried out and presented in a manner satisfactory to warrant its acceptance as a prerequisite for the award of Post-Graduate Diploma in Business Management/Post-Graduate

Diploma in Human Resource Management for which it has been submitted. It is understood that by

this approval the undersigned do not necessarily endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve the Summer Internship Report only for the purpose it is submitted.

Summer Internship Report Examination Committee for evaluation of Summer Internship Report

Organizational Guide : Signature…………………………………….: Name ………………………………………… : Designation…………………………………….: Address………………………………………..………………………………………………………………………………………………………………………………………………………………Tel No……………………………………………Email:……………………………………………

Name :Roll No.

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Contents1 Executive Summary.......................................................................................................................8

2 Airline Cargo..................................................................................................................................9

3 Key Participants.............................................................................................................................9

4 Managing Air Cargo Operations Successfully...............................................................................10

4.1 Fleet Management and Network Planning............................................................................10

4.2 Operations Management......................................................................................................11

4.3 Capacity Planning and Revenue Management......................................................................11

5 Key Performance Indicators in Airline Cargo Operations.............................................................13

6 Challenges in the Airline Cargo Industry......................................................................................15

7 Managing Mobile Workforces.....................................................................................................15

7.1 Leveraging Context in Mobile Applications...........................................................................15

7.2 Implementing Context Aware Services..................................................................................16

7.3 Guidelines and Recommendations........................................................................................16

8 TCE vs. TCO..................................................................................................................................17

9 How data-centric handhelds can enable transformation?...........................................................18

9.1 Reducing 'latency' between decisions and action.................................................................18

9.2 Immediate Parallel notification of team members................................................................18

9.3 Real-time resource management..........................................................................................18

9.4 Data in the palm....................................................................................................................18

9.5 Context-aware applications and services..............................................................................18

10 Available Cargo Mobile Apps and Latest Technology Trends in Cargo Space...........................19

11 Airline Cargo Functions.............................................................................................................22

12 Air Cargo Movement Messages................................................................................................23

13 Stakeholders: What do they really want?.................................................................................23

14 Mobile App for Consignor.........................................................................................................25

15 Mobile App for Freight Forwarder............................................................................................25

16 IT system for General Sales Agent............................................................................................26

17 Mobility Solution for the Customs............................................................................................26

18 Mobility Solution for Ground Handlers.....................................................................................26

19 Implementation Challenges......................................................................................................27

20 Conclusion................................................................................................................................29

21 Bibliography..............................................................................................................................30

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1 List of FiguresFigure 1: Types of Air Cargo Carriers.....................................................................................................8Figure 2 : Dwell Time for Cargo at Airports..........................................................................................11Figure 3: Collaborative Context Aware Workflow...............................................................................14Figure 4: Per cent of installed handheld devices replaced by year......................................................15Figure 5: TCO of Device Categories over 5 Years.................................................................................15Figure 6: Functional Areas VS Stakeholder Matrix...............................................................................20Figure7: Air Cargo Movement Messages.............................................................................................21Figure 8: IT Systems for Cargo Stakeholders........................................................................................22Figure 9: Screen Shot for Consignor App............................................................................................23Figure 10: Screenshot of GHCargoAPP................................................................................................24Figure 11: Components of Information Systems.................................................................................25

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Abbreviations

IATA International Air Transport AssociationSITA Société Internationale de Télécommunications AéronautiquesGHA Ground Handling AgentGSA General Sales AgentHAWB House Air Way BillMAWB Master Air Way BillDIMM Defined Imaging and Multiple MeasurementsTCE Total Cost of EquipmentTCO Total Cost of OwnershipRCMS RFID based Cargo Management SystemRFID Radio Frequency IdentificationULD Unit Load DevicesSLA Service Level AgreementHH/PDA Hand Held/Personal Digital AssistantCSD Consignment Security Declaration

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2 Executive SummaryThis report analyses the Airline Cargo Industry and its modus operandi and seeks to propose mobility solutions for bringing in more transparency, responsiveness and efficiency. The Airline cargo industry provides a medium for transportation of time sensitive cargo. Rising fuel costs and increased security threats leading to changes in regulatory policies have led to increased operating costs and thereby it becomes essential to bring in more efficiency into the cargo life cycle.

The report starts with an introduction to the airline cargo industry and then introduces the key participants in the airline cargo life cycle. In the following sections based upon secondary research the keys to success in airline cargo industry are reported along with the Key Performance Indicators in the Airline Cargo Industry. Finally the Challenges faced by the airline cargo industry are listed.

In the following sections based upon secondary research various ideas and suggestions given by IATA and SITA for incorporating mobility are put forward. The concept of Context Aware System based upon a SITA whitepaper has been introduced. In the next section the concept of the advantage of rugged mobile devices has been introduced. The report also includes what mobile apps and how latest technologies like 3D Imaging and RFID based tracking can be used to bring in efficiency.

The Recommendations begin with listing the various cargo functions and mapping the same with the key participants and then figuring out what tasks or issues a participant may face and how IT can help them? A table has been developed to address the needs of the participants. Finally the mobility apps have been proposed for each of the key participants.

The report also briefs upon the various implementation challenges that the proposed Information System would encounter. Bring about new Information System would lead to changes in the organizational processes and also would require employee skill upgradation.

Two aspects have to be understood very clearly that bringing in efficiency in the Airline Cargo operations is only possible through the introduction of proper hardware and software platform together. Also the presence of a number of stakeholders indicates that there is requirement of seamless flow of information along the full cargo cycle and that is only possible through the collaboration between various stakeholders and with the support of industry associations.

The report provides an IT road map for developing mobility solutions for airline cargo operations and seeks to improve operating efficiencies by reducing the bridge between an incident occurring and taking responsive action.

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3 Airline Cargo The airlines cargo industry plays a very important role in the transportation and delivery of time sensitive commodities. The cargo includes perishables; high-value and low-weight goods including fashion apparel, consumer electronics, pharmaceuticals, livestock, human remains and high-value intermediate goods such as auto parts. With industries now having or operating in a distributed model to have a cost advantage the airline cargo industry would only grow in importance. Air cargo traffic, as measured in revenue tonne-kilometres (RTK), is projected to average 5.0 per cent growth per year over the next 20 years.1 Globally, more than one – third of the value of goods traded internationally is transported by air. From the point of view of Airline industry, Air Cargo Services contribute near about 20% of their India’s international Air Trade to GDP ratio has doubled from 4% to 8% in the last twenty years.2

Airline cargo operations follow various business models and it is important to note that various processes involved in the various business models are different and not the same exactly. International air cargo business is concerned with international flights whereas domestic air cargo operations are concerned with domestic flights only.

4 Key Participants

4.1 ConsignorConsignor is the party responsible for initiating the shipment of goods. The title of the goods remains with the consignee until the consignee pays for the goods.

4.2 ConsigneeA party named by the consignor in transportation documents as the party to whose order or consignment will be delivered at the port of destination.

4.3 Freight ForwarderA shipper is responsible for the logistics aspect of the goods or cargo. This also includes scheduling, packing, routing, documentation, tracking, customs clearance, client communications and negotiations.

4.4 CarrierCargo itself can be carried either in the belly of the passenger airlines or on dedicated freighter aircraft. Combination aircraft in commercial aircraft that can be used to carry either passengers or cargo, and may have a partition in the aircraft cabin to allow both uses at the same time in a mixed passenger/freight combination.

Also integrated carriers operate their own fleet of aircraft and delivery vehicles providing overnight, door-to-door service.

1 http://www.boeing.com/boeing/commercial/cmo/air_cargo_market.page2 http://www.eiciindia.org/frontsite/MOCA%20WORKING%20GROUP%20ON%20AIR%20LOGISTICS%20REPORT.pdf

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http://en.wikipedia.org/wiki/Aircraft_cabin

http://en.wikipedia.org/wiki/Aircraft

http://en.wikipedia.org/wiki/Commercial_aviation

Figure 1: Types of Air Cargo Carriers

4.5 General Sales Agent (GSA)A general sales agent (GSA) is a sales representative for an airline in a specific country or region. The GSA is responsible for selling all products of the airline in its region which includes flight tickets and cargo space. Airlines usually employ a GSA in regions that it does not operate to or from or in a country at lower cost than opening their own offices.

4.6 Ground Handling Agent (GHA)Ground handling addresses the service requirements of an airliner between the time it arrives at a terminal gate and the time it departs on its next flight. It is cheaper alternative than Airlines’ own ground handling or maintenance capabilities.

4.7 CustomsCustoms is responsible for collecting and safeguarding custom duties and controlling the flow of goods inside and outside the country. Each and every cargo will be examined by the customs before the shipment is handed over to the Airline. After examination the cargo customs officer will issue a shipping bill with all details related to the shipment. The cargo would be loaded in the aircraft under the supervision of the customs officer.

5 Managing Air Cargo Operations Successfully

5.1 Fleet Management and Network PlanningFinding the right aircraft aligned with the business model is a necessary recipe for success in the airline cargo industry. The chosen aircraft not only meets the business model requirements but also minimizes the cost of operations and maintenance. To top it the upfront huge investment required in acquiring the fleet make the choice even more important.

When selecting the routes on which the carrier wishes to operate it is important to decide whether it wants to be a carrier with a published schedule (Network Carriers) or a chartered carrier with a flexible schedule. In the first case the carrier first decides on the flight route and then looks for business along that route whereas in the case of chartered route the carrier first

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Air Cargo Carriers

Combination Carriers

Conventional All Cargo Carriers

Integrated Carriers

acquires the business keeping in view its operational capabilities and then takes the routing decisions.

Network carriers may operate through many point to point routes but most of them operate through the Hub and Spoke model. Hub and spoke model involves transhipment where cargo is unloaded from one aircraft and loaded into another at an interim location. Hub and spoke model provides the advantage of consolidating freight over a particular route from various routes but at the same time bring about the operational challenge at the hub and also in Hub and spoke model the direct route would not be taken.

5.2 Operations ManagementThe most important part of the airline cargo operations happen on the ground. This is the part where the airlines can differentiate between their services.

Aircraft handling or ramp handling involves the loading and unloading of cargo into the aircraft. Skilled loading requires brisk but safe operations so that neither cargo nor aircraft are damaged and cargo is loaded within minimum time. Training of ground handlers and the use of appropriate loading equipment is essential. Because the experience in such loading and unloading equipment can only be gained through frequent use, the airport entity or dedicated service providers typically provide this service to airlines

Cargo handling or warehouse handling refers to the processes in the warehouse where shipments are accepted from freight forwarders, weighed and measured, and loaded into ULDs or onto the pallets. Total quality management and continuous process improvement are often employed by airlines or their selected subcontractors to reduce the loss of freight due to damage or pilferage and there by limit costs. Screening of cargo has recently added to the complexity. Warehousing technologies such as electronic transfer vehicles and automated stacker systems are often employed to optimize the workflow.

5.3 Capacity Planning and Revenue ManagementCargo airlines offer cargo space in a 3 stage process. The first process involves a bidding process for the freight forwarders. The capacity allocated during this process is known as Allocated capacity.

In the second step the some of the remaining available capacity or cargo space is allocated to large customers at a fixed price. In the last phase the remaining cargo space if available is made available for booking at least 4 weeks prior to the departure of the flight.

Determining the allocated capacity is not so simple process because for combination carriers at least some cargo space is reserved for passenger baggage which gets priority over cargo. Also the amount of fuel for a particular flight is determined by the weather conditions, Capacity of Aircraft, Route and Distance and maximum payload and hence the total cargo weight for a flight is not constant and varies.

To top it freight forwarders usually book for more space/weight than they actually use since most airlines do not charge a penalty for returned space. To counter this airlines allow for over booking. The determination of the extent of over booking is also essential because due to less over booking a flight might have to take off without reaching its actual flight cargo

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capacity which is known as Spoilage and if it allows for a higher amount of over booking it may lead to Off-loads. For cargo airlines spoilage is a more serious issue since once the flight takes off it is a complete loss whereas Off-loads can be accommodated on the next flights.

The most important decision in revenue management is whether to allow for booking when a request comes in or to wait for the booking up to a later stage when the booking can take place at a higher price.

Capacity planning in passenger airlines and cargo airlines though offer similarities but there are significant differences:

For passenger airlines capacity has a single fixed dimension that is the seat but in case of cargo it is two dimensional that is weight and volume.

Cargo capacity is difficult to determine because of baggage and fuel in comparison to passenger capacity.

Passengers usually have a fixed flight plan and re-routing is a difficulty but in case of cargo airlines, it does matter until the cargo reaches the destination within time and hence the routes can be flexible.

Traffic is not balanced in case of cargo meaning that the amount of cargo travelling from point A to point B is not the same as that travelling from point B to point A and there can be significant difference.

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6 Key Performance Indicators in Airline Cargo OperationsThe aviation logistics in the country today is confronted with a number of serious issues like inordinate dwell times, missing and non-traceable cargo, damaged cargo, high cargo processing times and long queues at the cargo terminals, etc.

6.1 Dwell TimeIt can be simply put as the time spent in the same position, area or stage of the process. For Indian cargo services the dwell time is higher than other international airports since the officially permitted free time is 72 hours.

Airport Dwell Time - Export

HoursDwell Time - Import

HoursSharjah 4 4-8Singapore 3 3-6Frankfurt 6 NADubai 2-3 2-6Hong Kong 3-6 4-8Delhi 36 119Mumbai 48 96Chennai 48 72Hyderabad 12 36Kolkata 48 72Bengaluru 36 48

Figure 2 : Dwell Time for Cargo at Airports

However a note of caution should be exercised in drawing any conclusion from the above data since in most of the other airports the majority of the cargo involves transhipment that is they do not involve customs checking but in Indian airports it is the other way round with most of the cargo are for import and hence require custom checking.

6.2 Throughput Efficiency at Cargo TerminalsInternational standard3 for throughput efficiency measured in terms of tonnage handled per sq. Meter is linked to the total volume of cargo handled in that terminal in a year. Here also the Indian airports are lagging behind.

MIAL4 in their written submission has attributed the difference in throughput efficiency at Indian airports and other airports abroad mainly to the fact that in those airports abroad, processing of air cargo transaction is not carried out at the Air cargo terminal but at the Agents` facility known as Air Freight Station5.

The cargo terminal operator has to make separate space available for customs examination which takes away more than 30% of effective cargo space. Need for segregation and sorting of

3 Air Freight Market Study, Transport Papers, World Bank, August 2009, Washington DC4 Mumbai International Airport Limited5 Not all agents can do this ,These shippers are licenced and bring in built in cargo directly to airport know as shipper built units (SBU)

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cargo and demarcation of areas as per BCAS 6norms takes away another 10 to 15% of floor space. These problems are not faced by cargo terminal operators abroad.

6.3 Menace of Missing/Non Traceable Cargo7

Every year airlines and cargo operators have to pay huge amount of money leading to loss of revenue due to penalties imposed due to misplaced cargo. The international benchmark for mishandling rate is 0.015%.8

In addition to the above key performance indicators, Indian Airlines Cargo operations are hindered by infrastructural challenges which is not within the scope of discussion in this document.

6.4 Operational DelayThe time lost by airlines due to operational delays caused due to maintenance activity or faulty infrastructure or equipment at the airport. Some of the other factors can be Over booking, delay in custom clearance and unavailability of staff.

6.5 Percentage of Flights Delayed Due to Technical ReasonsThe percentage of flights delayed due to technical maintenance activity required by the aircrafts just before take-off.

6.6 Average Minutes DelayThe average minutes delay is the total delay encountered by the flights due to technical or other reasons divided by the total number of flights.

6.7 Block HourThe number of block hours for a given flight is the time from the moment the aircraft pushes back from the departure gate revenue flight until the moment the aircraft arrives at the arrival gate following its landing. The number of block hours for an airline for a given period of time is a measure of the total time that its aircraft was in use during that period. Block hours are the industry standard measure of aircraft utilization.

6.8 Average block hours per dayIt is the number of hours an aircraft is put in use per day.

6.9 Turnaround time of Repair OrdersIt is the time between an equipment breakdown and its return to usage after repairs.

6.10 Cargo Load FactorLoad factor is the ratio of cargo ton miles to the available cargo ton .

6 Bureau of Civil Aviation Security of India7 Cargo that is found missing at the time of loading of a particular flight and found within 24 hours of departure of that flight is defined to mean as missing cargo on exports side. On the imports, cargo that is short received on a flight and arrives on a subsequent flight of that carrier would be treated as missing cargo. Cargo that is missing at the time of loading (exports) or at the time of flight segregation (imports) and is eventually not found even up to 21 days of a global tracer having been initiated by the concerned carrier should be treated as untraceable or lost.

8 www.eiciindia.org/frontsite/MOCA%20WORKING%20GROUP%20ON%20AIR%20LOGISTICS%20REPORT.pdf

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6.11 Freight or Mail Loaded/Unloaded (total annual tonnes)Freight or mail loaded or unloaded at the airport, measured in metric tonnes over the course of a year.

7 Challenges in the Airline Cargo Industry1.1. Duplication of Documentation 1.2. Practice of tendering Cargo during peak hours – brings about a strain on infrastructure and

resources 1.3. Lack of shipment visibility requires constant follow up with carriers, shippers and custodians

resulting in increased communication cost, penalties and delays.1.4. Regulatory and Procedural Hurdles; Lack of standardization of rules in case of transhipment1.5. Security Concerns due to terrorist activities leading to higher costs1.6. High Fuel Prices leading to increased costs1.7. Upward trend of Operating Costs1.8. Lack of proper channel for communication between ground handling staff. Currently the

process includes voice based communication channel which can have no audit trail.

8 Managing Mobile WorkforcesMobility Applications would be most helpful for the people whose job requires them to be on the move. Currently such people workforce does not have access to the right information at the right time. At the maximum these people currently get instructions via the walkie talkie which are not reliable. Most of the processes are static done using paper which is an inefficient way of working.

The solution lies in developing context aware mobile applications. These applications would deliver the right information at the right time to the right person. So the person does not need to seek out information for deciding his/her future action but the information itself gets delivered.

8.1 Leveraging Context in Mobile ApplicationsContext information is a set of parameters which would help in providing the required information to a user.

Broadly speaking the context aware parameters can be broadly divided into the following categories:9

User context parameters: e.g. profile, department, language, location, time, presence, etc.

Device context parameters: e.g. type of device, screen size, operating system, processor power, memory, battery-life, etc.

Asset context parameters: e.g. temperature, pressure, capacity, power, orientation, next service date, last repair data etc.

Network context parameters: e.g. wireless radio technology (WIFI, Cellular Networks -3G Networks), range, quality of service, bandwidth, etc.

9 www.appearnetworks.com/wp-content/uploads/2013/04/SITA-White-Paper-Managing-Mobile-Workforces-1.pdf

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Context aware systems must have the ability to collect relevant parameters to determine the context for a particular user.

8.2 Implementing Context Aware ServicesAs per the SITA white paper upon which the current section is based:

The technology works by distilling information down to only that which is necessary, using a collection of web services and similar processes running on a distributed intranet, which needs to be tightly-integrated with back-end applications and business processing models.

A common backend system needs to be developed to which multiple heterogeneous mobile systems can connect. Based upon the connecting device and the user using it information or services would be provided. In an airport the contextual parameters can include location, time, user role & department, flight number, device type etc.

Mobile middleware services would connect to back-end systems where workforce applications are deployed to the context-aware platform, enabling a range of wireless applications to be accessible to different stakeholders. This would enable airport ground handling operators and other stakeholders escape several manual processes and dependence on voice communications.

Figure 3: Collaborative Context Aware Workflow

8.3Guidelines and

Recommendations Though mobile applications can improve existing processes but there are several pitfalls which can lead to failure. SITA recommends the following for implementing context aware applications:

Analyse your Business Process Keep the End users in mind Leverage middleware to support as many applications as possible Prove the business case Think integration Look at the processing power needed Look at common-use infrastructure

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9 TCE vs. TCOTCE or ‘Total Cost of Entry’ is the cost of buying the mobile device whereas TCO or ‘Total Cost of Ownership’ is the total cost of using that device which also includes the cost of maintenance and repair.

Though mobile device seem to provide a lot of advantage by providing people with real time information and quick response capability but including smart devices without proper thinking of its cons can lead to increased costs rather than decreased costs over a period of time.

Research shows that the deployment of standard devices available in the market last for about 3-5 years and during this period apart from the initial hardware cost five more overhead costs come into the picture. They are

Software price or license costs Application development, testing and deployment costs Training costs Operations costs which include maintenance costs Downtime costs

Research indicates that Downtime costs which results due to loss in productivity due to hardware replacements is responsible for 64% of the total cost incurred.10The study indicates that standard consumer products have to be replaced 83% of the times compared to devices specifically designed for Industry usage which require replacement only 18% of times.

Year 1 2 3 4Rugged Mobile Computers 3.30% 7.80% 18.20% 55.40%Non Rugged Mobile Computers 18% 38.50% 82.60% 96.80%

Figure 4: Per cent of installed handheld devices replaced by year

The estimated TCO for the various types of devices as per the study is given below:

Type of Device Fully Rugged

HH/PDASemi-Rugged HH/PDA

Durable HH/PDA

Consumer Grade HH/PDA

Five Year TCO $ 12,957.00 $ 14,344.00 $ 19,815.00 $ 21,149.00 Annual TCO $ 2,591.40 $ 2,868.80 $ 3,963.00 $ 4,229.80

Figure 5: TCO of Device Categories over 5 Years

The above clearly indicates that rugged mobile devices meant specifically for industrial usage shows a lower TCO in comparison to standard handheld devices available in the market.

10 How data-centric handhelds can enable transformation?

10.1 Reducing 'latency' between decisions and actionMobility offers a huge scope to improve efficiency and reduce downtime, delivering real-time data instead of deferring it into the future. This can be achieved by reducing the time between

10 http://www.capita-softwareandmanagedservices.co.uk/software/Documents/TCEversusTCO_RevealingTrueCostHandHeldComputing_MotorolaWhitePaper.pdf

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decisions being made at the control centre level and their implementation at the operational level.

10.2 Immediate Parallel notification of team membersMobility offers an opportunity to inform several stakeholders at once when a decision has been made or an action needs to be taken.

10.3 Real-time resource managementContext-sensing allows events to be taken into account as they occur depending upon their urgency and resource needs. So the closest ground handling staffs that have the skill and equipment to address an issue can be deployed in real-time - greatly increasing flexibility.

10.4 Data in the palmWith internet connectivity and smart applications in place, mobile devices can help to reduce the use of paper, back-office simple logging activities, human prone error and the time between an incident and its effects being recorded.

10.5 Context-aware applications and servicesContext plays an essential part in any decision-making process. It can be employed at airports to improve almost all aspects of ground operations - with a host of potential contextual parameters, including location of a ground handling staff and Unit load devices and other equipment, as well as passengers and their baggage, maintenance of aircraft or airport equipment, and worker needs (paperwork, tools, spare parts, etc.).

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11 Available Cargo Mobile Apps and Latest Technology Trends in Cargo Space

11.1 Cargo Apps Features

Quick Tracking Page My Shipments Dimensional Weight Calculator Metric Conversion

11.2 Korean Air Cargo Features

Schedule ( Daily and weekly schedule is served) Flight Operation Status Booking List (Confirmed List and Waiting List is served) Tracking Traffic

o After log-in, check your cargo’s boarding/delay/offload status from 'On-board list'. One can also view 'U.S Customs Clearance Status' and 'EU-ICS Status' with the AWB number.

11.3 SAS Cargo Features

Allows the user to get status for the following milestones: Booked (BKD), Accepted (RCS), Departed (DEP), Received (RCF), Hold for Pick up (NFD) and Delivered (DLV) using the AWB Number.

11.4 Freight ScanFreight Scan offers a product FS100 which is capable of calculating the dimensional weight 11 of a package using 3D imaging technology. The weight calculated is mapped to the rates in the system and total cost is calculated. Compared to the manual process where in it takes an average of 90 seconds per box, this equipment reduces the average time to 4 seconds per box.

DIMM (Defined Imaging and Multiple Measurements) Technology allows the calculation of dimensional weight of multiple boxes in a single scan. Benefits Increased Operational Efficiency Improved Dimensional accuracy Visual record of all packages

11 In case of Airline cargo the higher of the Dimensional Weight which is the Volume and the actual weight of the cargo is considered.

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11.5 RFID Based Cargo Management System (RCMS)In the airlines cargo life cycle, freight forwarders still use out dated manual processes to manage the cargo which requires manual data entry into the computer system for each shipment.

The freight forwarder issues its own Airway Bill which is known as the House Airway Bill and acts as a contract between the freight forwarder and the shipper. The forwarder then gets into a contract with the carrier and this is known as the Master Airway Bill.

This RFID based system consists of a hybrid RFID system architecture providing both online and offline capabilities along with an integrated Cargo In and Cargo Out gateway system.

11.5.1 Benefits of RFID The solution does not require a line of sight access to be able to read tags. The tag can trigger security alarm systems if removed from its correct location. Reader and tag communication are not orientation sensitive. Automatic scanning and data logging is possible without human intervention Each tag can have a unique product code like standardised Electronic Product Code (EPC-

code) and still hold more information in an internal memory bank. Each item can individually be labelled. Tag internal data can be comprehensive, unique in parts/common in parts, and is compatible

with data processing in ERP system. System provides a high degree of security and product authentication - a tag is more difficult

to counterfeit than a simple barcode. The supporting data infrastructure can allow data retrieval and product tracking anywhere

provided the reader is close enough to the tag.

11.5.2 System Design The RCMS consists of the following components:

RFID Gateway System Handheld RFID System Local RCMS Server Central Database

RFID Gateway System: RFID gateway systems are installed at various checkpoints where RFID tags can be read, updated and the cargo movements can be tracked.

Handheld RFID System: provides ability to read or update RFID tags on a mobile device. The device should have capability to store data locally and should get synchronised with the local database.

Local RCMS Server: Local RCMS server is responsible for processing the data received from the mobile units and the gateway systems.

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Central Database: Stores all the data and gets synchronised with the local database from time to time.

11.5.3 ProcessA RFID-embedded tag is attached to each shipment following the arrival of the shipment. A RFID tag has 240 bits of memory, which stores the information required for identifying and processing the shipment. A number of RFID gateways with fixed RFID readers and antennas are installed at checkpoints inside the warehouse. During the cargo incoming process, the cargo items are carried into the warehouse storage area. When the tagged cargo items go through a RFID gateway, RF signals are received by the reader and a series of tag-reading events are sent into the Cargo Progressing Module. The contents of the tag are then read and processed by the system. After all items from the same shipment are received, the cargo processing module sends a notification to the flight-planning system to generate a flight plan. At this point for every HAWB a MAWB is generated and stored in the database. When the cargoes are ready to be loaded into the carrier, they exit from the warehouse through the RFID gateway once again. During this time, the tags are updated with MAWB data and the checked out items are sent to airport terminals for loading onto the corresponding planes. The local databases get updated automatically throughout the process and are synchronized with the central database at regular intervals.

Findings from the study12 indicate that using the system can lead to an average saving of 15-30 minutes per shipment.

11.6 Wearable Computing – Findings at SITA LabWearable computing is the next big thing around the corner. With the introduction of Google Glass though only available to limited number of people wearable computers have become a reality.

The two main advantages for wearable computing is that it allows the user to remain hands free and also in case of Google glass it helps to have a visual inspection of the problem at hand. A person sitting at the control centre connected to the host can see what the host is doing and can help the host out.

SITA has developed an app called SWIFT Boarding which allows the agent to secure scan the boarding pass and check the passport details simultaneously.

BAE systems has developed an Google glass app which allows the user to snap pictures and record audio reports which are then geo tagged and uploaded to a server. The same can then be shared with others leading to quick data collection and response.

12 http://www.iaeng.org/publication/IMECS2012/IMECS2012_pp278-283.pdf

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12 Airline Cargo FunctionsAirline cargo functions can be broadly classified under the following heads:

1. Cargo Reservation and Space control2. Cargo Warehousing3. Cargo Departure Processing4. Cargo Arrival Processing5. Cargo Revenue and Operations

Let us try and map the various functions with the stakeholders involved:

Figure 6: Functional Areas VS Stakeholder Matrix

Exporter/shipper is one who is having a valid license to export cargo ships the cargo. Shipper hand overs the cargo to air cargo agent who is an authorised IATA agent holding a valid permission to cart the cargo. The agent takes the full responsibility of the cargo once the shipper hands over the cargo. The agent does the packing and labelling for the cargo. The agent makes the reservation for the cargo on the carrier depending upon the routings and agreement with the carrier. Agent approaches the airline for the carting order either directly or through internet. Once the carting order is obtained, the agent files the shipping bill with customs with all relevant detail of the shipment. After filling the shipping bill, the agent files a gate pass entry for the cargo with airport authority custodian of the cargo, where the cargo will be deposited. The agent will offload the cargo at the customs examination area, where customs will check the said goods as per shipping bill. Once the legal formalities of customs completed, the agent will approach the airline to hand over the cargo and AWB.The airline officials will receive the cargo from the agent, airline officials will scan the cargo, they check the NOPC and weight matches the AWB.The cargo will be deposited in allotted area of the concerned airline. The airline checks the reservations of the cargo, and same been automated in the system. The airline will manifest & and same will under signed by the customs official-export freight officer. Once the manifest is over the cargo will be loaded in the pallet /container under the supervision of customs. The airline official will obtain flight rotation number (general manifest number) and the cargo will be escorted from the bonded area to ramp area under the supervision of customs and airline security official. Once the cargo is loaded inside the aircraft, the flight is departed in the system after the take-off of the flight. The FFM is generated from the system. The airline at destination receives the FFM message, based on the message the airline files EDI (electronic data interchange) with customs to have record of the cargo coming inside the port. Before the cargo

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lands the airline takes IGMNO (import general manifest no).The cargo is offloaded under the customs official, same escorted to the bonded area. The airline will deposit the cargo to the custodian (airport authority).The airline will send cargo arrival notice to the notify in the AWB or to the agent who is in the face of airway bill. The agent will come and collect the AWB, by paying the delivering charges once the do is obtained; the agent approaches the customs to clear the cargo. The customs examine the cargo, as per terms the duty will be charged for the goods. The agents approach the custodian, for the release of the cargo. The custodian will issue gate pass to agent to take the cargo out. The agent finally takes over the cargo and handover the cargo to the consignee.

13 Air Cargo Movement MessagesCargo Interchange Message Procedures is used as a standard for electronic exchange of cargo information between various participants including carrier, freight forwarders, and ground handling agents, Customs and other parties. This includes booking information, MAWB, HAWB, flight manifest data, shipment status, customs information, and more.

Some of the important messages are given below:Status MeaningBKD Shipment status when it is booked on a flightRCS Shipment status when the shipment is delivered to the GHA by the freight forwarderPRE on pre-manifesting the shipments the status displayed against the shipment MAN Manifested shipment loaded and assigned to the flight.DEP On flight departure the status of shipment on the flight.ARR Shipment status on flight arrivalRCF Shipment status when confirm received from the incoming flightNFD Status of the shipment on notification to the consignee / BrokerAWD Handover of AWB document to the consignee. DLV once shipment is collected by consignee and end of shipment lifecycle.

Figure 7:Cargo Movement Messages

14 Stakeholders: What do they really want?In the above matrix the functional areas represent a whole gamut of activities.IT can help in automating some of the processes and mobility would enable them to have access to information and status updates on the go.

14.1 Consignor/ConsigneeThe consignor would like to book for his/her cargo. He would also like to get status updates about his/her cargo. Any delay or change in the initial plan would be made known to the party.Earlier we also saw that misplaced cargo and lost cargo are a huge menace. The concerned party would like to have access to a portal to track for the reimbursement/damages paid for loss /misplacement for cargo which can be done through a claims system.

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14.2 Freight ForwarderThe freight forwarder has to book the space for cargo on the carrier. The freight forwarder either contacts the General Sales Agent for a carrier in that region or else it contacts the airline carrier directly.The freight forwarder also has the responsibility of handling over the cargo after packaging to the airport custodian controlled warehouses.

14.3 General Sales AgentThe General sales agent handles the overall sales of the airlines cargo space in that region over various routes.

14.4 CustomsThe customs needs information of all the cargo that is about to depart or arrive on a scheduled flight. They randomly check few boxes in the consignment. They also ascertain the fact that various custom duties, taxes etc. are paid and the cargo is ready to be loaded onto the carrier.

14.5 Ground Handling AgentThe Ground Handling Staff are the most relevant stakeholders for a mobility solution as such is the nature of their job that they have to perform their job on the move. They need to identify the correct cargo and also receive instructions from the control centre. They are also responsible for the build-up of the Unit Load Devices.

Stakeholders Tasks/Problems or Issues Faced How can IT help?Booking with Freight Forwarder Cargo Booking ModuleCargo Tracking Cargo Tracker ModuleMissing Cargo Damages Missing Cargo Claims PortalCargo Space Booking Cargo Booking + AWB GenerationMisplaced Cargo Misplaced Cargo NotifierMetric Conversion/Cost Metric Conversion/Cost Calculation ModuleSales Report Report GenerationAnalytics/Most Profitable Route AnalyticsIncoming/Outgoing Cargo Details Customs Notifier SystemCargo/Consignment CheckingShipping Bill GenerationCargo Identification RFID tracker based System/Bar code Scanner based ULD Build Up ULD Build Up ModuleCommunication/Notification Task Assignment Module/Task NotifierCargo PreManifest/Manifest Manifest Generation ModuleFlight Load Planning Load PlannerSLA Breach SLA Breach NotifierULD Management ULD Management Module

Carrier

Consignor

Freight Forwarder

General Sales Agent

CustomsCustoms Clearance Module

Ground Handling Agent

Figure 8: IT Systems for Cargo Stakeholders

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15 Mobile App for ConsignorThe Consignor is provided with a platform wherein he/she can book for a shipment with freight forwarder. The freight forwarder provides the consignor with a unique identification number. When the freight forwarder books space for the cargo on an airline corresponding to the unique identification number (HAWB) a Master Airway Bill number (MAWB) is generated. The consignor can use either of the unique numbers to track his/her cargo.

Against each of the shipment there would be a shipment status column indicating the current status of the shipment. The consignor is also provided with the intended flight plan for the cargo. Any change or progress in the shipment process is notified to the consignor.

Other Features: Customizable Home screen showing the current status of all on going shipment. Language support Metric conversion and cost calculation app Facility for reimbursement of misplaced or damaged cargo The consignor also is provided to select the priority or the date by which he/she expects the

consignment to be delivered. Special cargo handling for perishable goods or temperature sensitive goods. Provided cloud storage of all relevant documents related to a shipment. May provide facilities like Insurance etc.

16 Mobile App for Freight ForwarderThe freight forwarder essentially takes ownership of the shipment once he takes it over from the consignor. The freight forwarder based upon the schedule of the flights of the carrier and space availability reserves space for the cargo with the carrier.

Also for every shipment if it involves transhipment it would include a number of connecting flights and hence the chance of misplacing increases. Once a shipment arrives at a particular airport and the barcode is scanned it current location gets updated and if that current location does not match original flight route a message or notification is sent to both the carrier and the freight forwarder to take corrective action.

Some of the Freight Forwarders are also involved with door to door deliveries and the mobile app should be able to generate on a day to day basis a plan to deliver the same to various

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Figure 9: Screen Shot for Consignor App

locations and assign the personnel the same based upon their availability. The system should also highlight the priority of each of the deliverables and schedule the plan as per the priority.

17 IT system for General Sales AgentThe GSA for a region manages the sales for the space for a particular carrier. Since mostly routine customers (Freight Forwarder) would approach the GSA for cargo space there should be a module to handle customers and run a loyalty program for the same.

The IT system for GSA would help to generate reports based upon the sales data and the same can be used to generate monthly sales reports. The main use of this data would be to use this data for analytics. It can help them to answer questions like: Which is the busiest route and in which time of the year? This kind of question can help the GSA to pass this information to the carrier and can help in scheduling of flights accordingly.

Other Features:

Multiple currency support Cloud storage of documents and reports Credit Control and Payment module Customer Profile Management

18 Mobility Solution for the CustomsThe Customs needs to be informed beforehand the details of the incoming/outgoing cargo information. This system would provide the information to the customs department. It would allow customs staffs to be assigned for checking of the consignment.

The current process of consignment checking involves the custom asking randomly for a few of the packages in the consignment to be opened for checking. The App should be able to randomly generate package number for the customs officer for checking. The same upon being checked and verified would be updated on the system. Upon clearance of the consignment after payment of the custom duty tax would enable the generation of the shipment bill.

Consignment Security Declaration is a document used by the regulators which entails an audit trail giving information of who all has secured the cargo along the supply chain. IATA has given a standard format for the CSD document. The app should generate the e-CSD as per the IATA standard and thus would be able to reduce paperwork and provide all information at the click of a button to the user.

The App should be able to identify regular consignors and see the content of their last shipments so as to minimize the time for checking. Similarly new shippers with dubious identity the app should raise an alert.

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19 Mobility Solution for Ground HandlersThe app for the ground handling staff should indicate an itinerary of his/her day, of various tasks to be done at various time of the time. There should be a notification area where in any updates or alerts from the control centre can be conveyed. On the home screen the locator (GPS) should identify the location of the person within the compound and the same should be available to the other Ground handler staff and the control centre.

The ULD manager should indicate the status of the ULD devices and their location. Also damaged ULDs which require maintenance should be updated.

The cargo identifier should be able to use technologies such as bar code scanner or RFID scanner to identify the cargo.

A current Google goggles like APP which when pointed towards a bar code would show all the relevant details can work both with smart phones and wearable device like Google glass.

20 Implementation ChallengesAn Information System Change would bring several challenges. An Information System consists of 5 components:

Hardware /Infrastructure

Changes in Hardware or Completely new Hardware needs to be developed

Software New Software or Applications needs to developed for the Changed/New Hardware Platform

Data Whether Data would be easily available for the new IS or can old data can be migrated from the Legacy Systems to the New IS

Processes New IS would warrant changes in the existing processesPeople Users need to be trained for using the New IS

Figure 11: Components of Information Systems

Each of the above components would present a different set of challenges when developing an Information System. In this section we try to bring up the challenges in terms of the above components of the recommended systems in this report.

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Figure 10: Screenshot of GHCargoAPP

20.1 IS for the Consignor: Hardware/Infrastructural Challenges: In this case every consignor or shipper is an

independent entity and device used him would be his choice. The cost would be borne by the consignor or shipper himself.

Software: Though there are no hardware challenges as such but there can be a variety of devices used of different operating systems or screen size and hence the app should be available for all existing platforms like IOS or Android or Windows.

Data: This app would be an add-on app for the consignor and data should be available in the existing systems but migration needs to be done for data.

People: No such issues, as it would be a simple app and hence users should be able to use on their own.

20.2 IS for Freight Forwarder: Hardware/Infrastructural Challenges: No such issues even though freight forwarders

might not be quickly making a move to the mobile platform from the desktop platform.

Software: Should be a platform independent and device independent app. Data: Freight forwarders would be having relationships with several cargo carriers and

hence the Information System solution should be able to connect to several back end system for booking of cargo space and to showing timings of scheduled flights.

Processes: Freight forwarders are governed by the IATA guidelines and hence the processes should remain contact and if any change has to be approved by the IATA.

People: Minimal training might be required.

20.3 IS for the GSA Hardware/Infrastructural Challenges: The GSA would mostly be provided a mobile

device by the carrier. Software: Should be a platform independent and device independent app. Data: Historic Data has to be made available to the GSA because such data would help

the GSA decide on monthly targets and hence migration should be done. Processes: No such change would be there in the working of the GSA People: Minimal training to help the users set up notifications and generate reports.

20.4 IS for the Customs Hardware/Infrastructural Challenges: Who would provide for the hardware cost? The

government needs to be involved and the advantages should be listed so that they may finance the project.

Software: Should be a platform independent and device independent app. Processes: Some of the processes which till date take place through paper and manual

processes would get changed to an electronic format. People: Training of the customs staff would be required.

20.5 IS for the GHA Hardware/Infrastructural Challenges: The GHA are generally service providers and

they need to be convinced to move to this new platform based upon data communications. Also proper hardware for reading and updating RFID tags need to be

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developed. Since GHA would work in harsh conditions there is the need for the rugged mobile devices and devices with high battery durability.

Software: Should be a platform independent and device independent app. Data: No Data issues since currently the GHA do not have a online platform. Processes: Some of the processes which till date take place through paper and manual

processes would get changed to an electronic format. Reporting and communication would also take place through the device.

People: Training of the GHA staff would be required.

21 ConclusionThe above recommendations would provide an integrated solution throughout the cargo spectrum .All the above systems would be connecting to a single back end. The login features would be based upon the profile of the person. Depending upon the profile the person would get access to only that information which he/she requires and the rest would be screened from the user. The applications must be providing multilingual features and cloud storage for the documents. Depending on the device characteristics the application would provide access to features.

Two other important aspects that need to be kept in mind are that bringing in efficiencies in airline cargo operations through IT would involve designing fast responsive systems which also involve the hardware aspect of it. The second part that needs to be kept in mind that there are several participants involved in the cargo life cycle and a uniform IT system can only be made a reality through collaboration between companies and with the backing of regulatory bodies.

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22 BibliographyMinistry of Civil Aviation, Govt. Of India. (2012). Air Cargo Logistics in India.

Motorola. (n.d.). TCE versus TCO: Revealing the True Costs of Hand-held Computing .

Online Articles by SITA

http://www.sita.aero/content/mobility-will-transform-operational-environments

http://www.sita.aero/content/Airport-analytics-See-bigger-picture

http://www.sita.aero/content/the-rise-nfc

http://www.sita.aero/content/wearable-computing-airports-sita-lab-reports-findings

http://www.pcmag.com/article2/0,2817,2423316,00.asp

http://asms-pro.com/Modules/SafetyAssurance/ListofAirlineKeyPerformanceIndicators.aspx

http://analysis.telematicsupdate.com/fleet-and-asset-management/how-telematics-keeps-cargo-management-track

https://www.abiresearch.com/market-research/product/1005960-cargo-container-security-and-tracking/

http://ops.fhwa.dot.gov/freight/intermodal/freight_tech_story/freight_tech_story.htm

http://www.spacedaily.com/reports/BAE_Systems_announces_mobile_app_for_Google_Glass_devices_999.html

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Airline cargo Operations

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