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Transcenda SM, the consortium of three major regional CCSs, is an industry leader in
the initiative toward world-class standards for air cargo messaging. Transcenda SM
works with the industry group Cargo 2000 aimed to improve the efficiency of the industry
by unified standards for cargo processes and the all-critical movement of shipment information. TRANSCENDASM: TOWARD WORLD-CLASS CARGO STANDARDS
By: Marcia Jedd
Visibility and the ability to monitor all aspects of the supply chain are critical
in today’s globalized marketplace. Today’s supply chains demand easier access to
information and faster speeds to market. Time-definite transportation is a great
means to this end as facilitated by the world’s air cargo carriers. But before air
cargo can fully contribute to efficient supply chains, standardized business
processes for the movement of air cargo and related messaging needs reform.
Organizations such as Transcenda, the air cargo industry’s first major Cargo
Community System (CCS) alliance, are leading the way toward facilitating the
easier flow of cargo messaging through single-point access by airlines and forwarders.
Transcenda consists of three world regional CCSs: Cargo Community Network in Asia,
Icarus in Ireland and Cargonaut in the Netherlands. The alliance is led by ARINC, a
communications and information processing systems developer for the aviation market.
“Our role is really about bridging. We’re transporting data to and from airlines
and forwarders,” states Jim Martin, Director of Global Trading Services at ARINC.
“Ourchallenge is to get closer to the content of this data and the applications that
deliver it,” Martin says.
As a technology solutions alliance, Transcenda is well positioned to lower costs for airline and forwarder customers while improving data exchange through new message types and access methods. Transcenda enables customers to share a common
secured messaging infrastructure, which is used by over 1,500 companies worldwide. As a
result of bypassing multiple CCS connections and tapping into Transcenda’s Global
Gateway single-point solution, IT networking and message translation costs for each customer
are frequently reduced by 20 percent to 40 percent.
Problems with the Air Cargo Marketplace Today: Fragmented Market
While the industry is headed toward simplified global networking and any-to-any
translation, its current status is far different. By its nature, the highly
segmented transportation marketplace is rife with difficulties for data exchange because of
multiple parties and disparate systems.
Airlines, freight forwarders, ground handling agents and shippers are all required
to communicate shipment information to partners. Yet few parties involved in this
process have the information technology to directly link with trading partners. Electronic
data interchange (EDI) message formats vary widely.
Airline legacy systems link to VANs (value added networks) and CCSs to
perform critical EDI translation services. Airline solutions are often operated on
antiquated legacy systems, while a few carriers are moving toward Internet-based
platforms such as XML through third-party providers or through their own means.
Weak IT Solutions
CCSs along with Value Added Networks (VANs) have been the traditional
gatekeepers for translating air cargo-shipment data. “CCSs have been geographically
oriented and excel at EDI translation but can prove costly especially to airlines
and forwarders who are compelled to use multiple CCSs and VANs to do business globally,
” Martin says. EDI is the most commonly used electronic means of moving cargo-shipment
data because of the volumes of users that are bound such legacy technology. Nevertheless, less than one-fourth
of all the world’s airway bill (AWB) transactions are estimated to move via
EDI methods.
The low adoption of EDI is due, in part, to many small- to medium-sized
freight forwarders being shut out of the CCS market because of high costs or lack of
IT infrastructure. Forwarders are vital to the industry because they handle the vast
majority of the entire world’s air freight transactions particularly for international
air freight. Approximately the top 20 percent of all forwarders control an estimated
70 percent to 80percent of all AWB transactions. Many these multinational forwarders
use legacy systems tied to CCSs. Medium-sized forwarders have made varying degrees of
progress in adopting technology while small forwarders, many without IT sophistication,
require easy tools.
While EDI use remains low industry wide, the air cargo industry is already
migrating away from EDI translation services toward Web-based supply chain
applications. Application service providers (ASPs) using Internet-based platforms and some
CCSs have expanded into these supply-chain solutions. “Yet the EDI translation services
are still required for providers and will be for quite some time because of the
investment made in legacy systems,” Martin says. As a result, all providers must
integrate EDI/legacy technologies into their solutions.
Today, no third-party provider or entity serving the air cargo industry today excels in
all three required competencies to create a standard business process: applications,
EDI (electronic data interchange) translation and networking.
“The typical VAN (value added network), CCSs or EDI translation providers don’t
have the application expertise. Traditional ASPs are trying to set up networking and
EDI translation. It’s becoming obvious that technology partners need to converge to
create effective use of the three competencies,” Martin says.
Indeed, ASPs such as Unisys and Syntegra have widened their lenses to develop
expertise in the three areas to support a common data management platform (CDMP). A
CDMP facilitates the low-cost neutral exchange of data. The adoption of a CDMP is needed
to achieve process control and resultant higher service levels in the quest to deliver
time-definite transportation.
Toward World-Class Standards
World-class standards and
common platforms allowing for any-to-any translation are desperately needed in the air
cargo industry today. To that end, the International
Air Transport Association (IATA) industry working group Cargo 2000 last year declared
an open operating environment for providers to reach a CDMP standard. Airlines
and forwarders can thus become certified to meet these standards through their third-party
providers. Cargo 2000 acts as a standards-setting body for the air cargo industry.
Only through the adoption of a CDMP open to multiple suppliers will the air
cargo marketplace be able to meet its objectives in serving the transportation industry
and supply chain. The CDMP solution is time consuming and may prove costly especially
for early adopters but will ultimately lower costs for the air cargo community
while improving quality.
Initiatives such as the Transcenda alliance that render a neutral CCS global
messaging gateway also support Cargo 2000 objectives. “Exchange of messages and integrity
of data are crucial to the industry. We certainly view any collaboration or alliances in
this sector as extremely positive,” states Ron Cesana, Project Director of Cargo 2000.
Adds Martin of ARINC, “We believe it’s time to make the transition toward
global networking. It’s a declining CCS market where consolidation is inevitable.”
Martin says consolidation among CCSs and will accelerate within the next two to four years
as the market demands efficiency and follows the migration path to Internet-based solutions.
British Airways World Cargo Selects Transcenda
One cargo leader in freight volumes and technology recently adopted Transcenda
to replace its cumbersome CCS connections. British Airways World Cargo (BAWC),
the world's fifth largest cargo carrier, appointed Transcenda for a three-year contract
which commenced April 2001. BAWC is an active participant and member of the Cargo 2000 group.
“We awarded the contract to Transcenda for the provision of global messaging for
our worldwide trading partners based on the company’s global reach and presence and
the quality of service the alliance brings to BAWC and our worldwide community
of customers,” states Paul Burton, General Manager of Business Development at
BAWC. BAWC has begun realizing significant benefits since using Transcenda’s single-point
solution, ultimately shedding connections to more than one dozen dedicated
CCSs worldwide.
“With all messages being sent through a single supplier, we believe that
the focus on and management of quality information will be more easily achieved,"
Burton says, adding, “Over the coming months, we’re placing increased focus on the quality
of information we provide to our customers.”
As an example in the UK, messages are routed to BAWC’s third-party provider
Agency Sector Management’s (ASM) 2000NT system. Not only does BWAC save
significantly on networking and translation costs with CCSs through the Transcenda/ASM
solution, but so do its UK forwarder customers that connect to Transcenda via ASM. These customers pay no messaging charges to send AWB messages or to receive FSU (freight status update) messages, other than regular Internet connect costs. “Part of the our decision to appoint Transcenda was to be able to reflect the decrease
in telecommunications costs as a benefit to our customers,” Burton says.
ASM is the U.K.-based organization that represents forwarder interests in EDI-related
matters. The vast majority of U.K.-based air freight forwarders use ASM as a third-party
provider to perform Customs import entries and export EDI messaging to airlines.
The business principles of BAWC are based on the effective use of IT to
enable progressive change and performance improvement. BAWC strives to ensure it
optimizes its investment in IT systems and services. “The partnership with Transcenda meets
this need and provides opportunities to supply the delivery of service excellence to
our customers,” Burton concludes.
Transcenda Bridges the Migration Gap
In summary, the Transcenda alliance offers distinct benefits in the logical migration path from legacy- to Internet-based solutions as follows:
- Single point of contact. The Transcenda Global Gateway removes need for
dedicated, multiple connections to CCSs.
- Expanding the trading community.
-- Expands distribution capabilities to the mid-sized forwarder through third-party
software vendors, making solutions affordable for forwarders.
-- Further expands distribution capabilities to thousands of small forwarders
through ASP applications, many of which cannot afford third-party solutions. Few
ASP solutions serve the forwarder today and these do not take into account
legacy systems.
- Creating a bridge between EDI and XML translations. One partner may
use XML, another may use EDI, so translation between the two technologies
must continue to be a goal.
- Converge the content of the information with business process.
The bridge
has been built among small to large trading partners, EDI to XML, and so
forth. Accordingly, both the information and process can be controlled so collaboration
can thrive as seen in efforts by Cargo 2000.
The Future Demands Economies of Scale
Global supply chains demand faster speeds to market and reduced inventory via time-definite transportation. The air cargo marketplace requires a more efficient system
for business processes including cargo messaging.
CCS consolidation and consortiums, which foster any-to-any translation, are mandatory
if the air cargo sector is to achieve improved service levels and reduced costs. So is
the migration to the Web and a world-class CDMP solution. “The market is
demanding economies of scale because of pressure to lower supply chain costs. The
Transcend Global Gateway is part of the solution,” Martin of ARINC concludes.
Transcenda Alliance
Transcenda is an ARINC-led alliance made up of three of the most advanced CCSs
in the world. Transcenda was formed in March 2000 to provide global e-commerce
and single-point access to airlines and forwarders for the deployment of e-commerce
and messaging services.
Transcenda Alliance Participants
Cargo Community Network (CCN) is jointly owned by Singapore Airlines, Ltd.,
TBD Holdings, and SAAA Cargo Services Pte. Ltd. and enables cargo-related
information exchange within the air cargo community of Singapore, Malaysia, Philippines
and Indonesia.
www.ccn.com.sg
Cargonaut B.V. supports 150 freight forwarders, cargo community systems,
airlines, handling agents, customs, integrators, shippers, and truckers through its core
systems located at Schipol Airport, The Netherlands.
www.cargonaut.nl
Icarus e-Com, headquartered in Dublin, Ireland, provides a range of e-commerce
supply chain solutions to the freight, transport, and logistics
industries.
www.icarus-e.com
ARINC
ARINC Incorporated, of Annapolis, Maryland, develops and operates
communications and information processing systems as well as provides systems engineering
and integration solutions for the aviation, government and travel industries. The
company was founded in 1929 and revenues for the company during 2000 were approximately$530 million.
ARINC participates in a Cargo 2000 working group for technology and
messaging. During 2001, ARINC completed tests for Phase 1 of Cargo 2000’s Master Operating
Plan (MOP) which establishes measurable processes for air cargo
operations.
www.arinc.com
Cargo 2000
Cargo 2000 consists of a group of 28 of the world’s leading airlines and
freight forwarding organizations and other associate members. Its goal is to improve
the efficiency of air cargo operations, enhance customer service and reduce operating
costs.
www.iata.org/cargo/wg/cargo2000
Publish date: 2001
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