Global Logistics-December 2007

The friendly skies are taking a stand against countries that fail to clean up their act—and the International Air Transport Association (IATA) is flying cover.

Giovanni Bisignani, director general and CEO of the international trade body, recently challenged governments attending the World Air Transport Forum in Cannes, France, to put aside politics and join industry in delivering real results to improve air transport’s environmental performance.

“Airlines are leading the environmental debate with a vision to become carbon neutral in the medium-term and attain zero carbon emissions in the long term. We are setting the environmental performance benchmark for other industries to follow,” said Bisignani.

To his point, IATA’s 240 member airlines have agreed to a four-pillar strategy on climate change:

  1. Invest in new technology.
  2. Build and use efficient infrastructure.
  3. Operate planes effectively.
  4. Consider positive economic measures while working with governments to define a fair, global, and voluntary emissions trading scheme.

Its efforts are already showing considerable progress. In 2006, IATA’s fuel campaign saved 6.6 million tons of CO2 by shortening 350 routes; 8.8 million tons of CO2 by working with airlines on best practices in fuel management; and 1.1 million tons of CO2 through more efficient operational procedures.

IATA is also working with seven major cargo airlines (Air Canada, British Airways, Cathay Pacific, KLM, Martinair, SAS, and Singapore Airlines), freight forwarders (DHL Global Forwarding, Panalpina, Kuehne+Nagel, Schenker, TMI Group-Roadair, and Jetspeed), and ground handling agents to embrace a paper-free air cargo environment with the launch of six e-freight pilot projects.

Cargo on key trade routes connecting Canada, Hong Kong, the Netherlands, Singapore, Sweden, and the UK has already begun transitioning to electronic shipment documentation.

The e-freight pilots will, for the first time, systematically test common standards, processes, procedures, and systems designed to replace paper documents that typically accompany air freight with electronic information.

During the initial phase, selected shipments will travel without a number of documents that make up the majority of the paperwork, including the house and master airway bills. Results from the pilots will be used to expand e-freight to other territories.

But the airline industry needs support from government to prioritize and spearhead these ongoing efforts, Bisignani stated at the World Air Transport Forum.

“Our biggest disappointment is the European states. They are taking a completely political and totally irresponsible approach by unilaterally pursuing emissions trading rather than employing a global strategy. This will cause diplomatic trade battles, and do nothing for the environment,” he noted.

Specifically, Bisignani criticized Europe for the 13 million tons of CO2 it wastes each year due to its inefficient air traffic management system, comprising 34 air navigation service providers.

“Europe has been discussing a Single European Sky for 15 years, blowing a lot of hot air in discussions, but taking no action. On the environment it is acting like a hypocrite—charging for airline emissions without fixing its own air traffic management mess,” he said.

Pulling Alarm on SC Preparedness

When it comes to emergency response, execution is paramount. That’s why global logistics companies are fine-tuning contingency protocols to make sure that when the unexpected happens, first responders and supply lines are prepared.

In an all-day drill at its Middle Harbor Terminal in Oakland, global container transportation company APL recently tested its international supply chain procedures for the third time in 12 months, bringing 100 public- and private-sector participants together to study how emergency response teams can collaborate with the maritime industry to secure containerized trade.

“We put our policies, procedures, and people to the test,” says Earl Agron, vice president of security for California-based APL. “We proved that we can work effectively with our law enforcement and government partners.”

Teams from the California National Guard, U.S. Customs and Border Protection, FBI, U.S. Coast Guard, and local authorities joined APL operations and security officers from the United States, Europe, and Asia for the exercise.

During the simulation in Oakland, emergency response officers and APL security executives established a joint command to investigate the origin and nature of suspicious cargo delivered from overseas. As part of the drill, APL demonstrated its ability to integrate both vessel and terminal security plans, including a successful evacuation of vessel crew and terminal labor.

Elsewhere around the globe, companies are preparing and equipping emergency response operations to support and manage contingencies of a different nature—humanitarian and disaster relief efforts.

In Bahrain, DHL has introduced its third disaster response team (DRT) in cooperation with the United Nations’ Office for the Coordination of Humanitarian Affairs (OCHA).

The new deployment, based in Dubai, UAE, consists of more than 40 volunteers capable of setting up an effective airport logistics operation in the immediate aftermath of natural disasters to ensure relief supplies are efficiently sorted, stored, and distributed as needed.

As part of the strategic partnership with the U.N.’s OCHA, two teams of specially trained DHL experts were created for earlier missions in the Asia/Pacific and America/Latin America/Caribbean regions.

In the past few years, DRTs have supported relief missions following the earthquakes in Peru (2007), Indonesia (2006), and Pakistan (2005); Hurricane Katrina in the United States (2005); and the tsunami in Southeast Asia (2004).

“Given the vast number of incoming relief supplies that arrive at airports following a natural disaster, especially in the first few days, the expertise of DHL employees plays an extremely important role in setting up a functioning logistics operation at the airport,” says Isabelle de Muyser-Boucher, chief logistics support unit for the OCHA.

“The provision of core skills by private companies is becoming more and more important for United Nations programs to expand current aid efforts,” she adds.

NP Collection Runs With RFID

Naisten Pukutehdas (NP Collection), a Finnish apparel manufacturer and retailer, is giving RFID modeling a spin and then some.

In June 2007, the fashion house began piloting an RFID-based solution in an effort to streamline its supply chain before opening a new group of stores and expanding its global purchasing network.

In the first phase of the pilot, garments were RFID-tagged at a site in Eastern Europe, helping the company track goods as they arrived at its distribution center and six retail locations in Finland.

Beginning in January 2008, garments manufactured in China will also be tagged, enabling NP Collection to track all its garments, anywhere in the supply chain.

Using RFID, NP Collection can follow each stage of the supply chain in real time, which yields significant cost savings and increases manufacturing and logistics accuracy. The company knows exactly what garments are being manufactured, which ones are on their way to Finland, and when retail shops are expecting shipments.

“We have been following the development of RFID technology for many years. This spring we became convinced that it was the right time to implement it,” says Risto Rosendahl, managing director of NP Collection.

“Thanks to our state-of-the-art RFID solution, we have improved our product handling rate tenfold and eliminated human error. We expect to reach return on investment in six months.”

In addition to tracking the supply chain, NP Collection’s item-level RFID solution covers the receipt and dispatch of goods, inventory management, and point-of-sale functions. Now it can even carry out daily inventory to see what products are on the shelves and which require replenishment.

In retail shops, the company can tap into real-time product information to plan shelf space usage before goods arrive.