The role of the air cargo industry is significantly growing in the global economy. Currently, world air cargo traffic is forecasted to grow an average 4.2 percent per year over the next 20 years. This is partly happening because of the rapid growth of e-commerce that has the potential to impact the growth of air cargo.
Compared to other methods, air cargo accounts only for less than 1 percent of world trade tonnage. However, 35 percent of the world trade value is carried by air.
Clearly, the air cargo industry is a high-value one, and it is critical for serving markets that demand speed and reliability for the transport of goods. Air cargo will remain a preferred solution for transporting higher value goods that are time sensitive and economically perishable.
Despite the growing volumes of air shipments, the profitability of the sector is still under heavy pressure. To overcome this barrier, the industry needs to invest in technology and process development to become an even stronger catalyst for growth.
The first step towards better technology and processes is to embrace IATA's air freight initiative and switch from the legacy Cargo-IMP message format to the more modern Cargo-XML.
1. What are Cargo-IMP and Cargo-XML
To enable efficient cooperation between airlines and other parties, IATA has developed standards for messaging procedures. Cargo Interchange Message Procedures (Cargo-IMP) has been long the number one standard in messaging in the industry for specifications regarding space allocation, air waybill, flight manifest, accounting, status, discrepancy, embargo, customs, CASS billing, dangerous goods, allotments, and surface transportation.
However, IATA stopped supporting Cargo-IMP after the 34th edition in 2014. The purpose of this was to utterly focus on extending Cargo Extensible Markup Language (Cargo-XML), a new modern messaging format. It is the new preferred standard for electronic communication between airlines and other stakeholders, such as shippers, freight forwarders, ground-handling agents, regulators, customers, and security agencies. Prominent organizations, such as the Cargo Committee, the Cargo Services, and the Cargo Agency Conferences endorsed the format.
Cargo-XML facilitates cargo business processes, fulfills custom requirements for Advanced Cargo Information (ACI) filing, and complies with security regulations like e-CSD. This new format ultimately helps the air cargo industry to move towards improving its processes by digitalization across the entire supply chain.
Nevertheless, Cargo-IMP is still widely used for electronic messaging in the industry regardless of the lack of enhancement from IATA. The migration from the legacy Cargo-IMP format to Cargo-XML needs to happen for the air cargo sector to become more competent.
2. Why does the air cargo industry need to overcome Cargo-IMP?
Why do we need to stop using Cargo-IMP altogether?
Cargo-IMP was limited to an ASCII 7-bit data set and it limits the size of data entries. Some elements of the documents can easily exceed the amount of available size of data fields. This can cause problems such as some data wouldn’t be adequately captured when communicating with the Cargo-IMP format.
Creating electronic air waybill with Cargo-IMP can run into the issue of missing data that requires manual correction, therefore it’s inefficient and expensive.
Other important cargo documents, such as Shippers Letter of Instruction (SLI), commercial invoices, or packing lists are not supported by Cargo-IMP.
Market leaders need to take a step forward and adapt to Cargo-XML for better electronic processes. Many have not yet initiated the transition; however, it must happen.
3. Cargo-XML advantages
Cargo-XML is a simple format, however, it’s more flexible than its predecessor. Cargo-XML documents do not only support larger extended UTF-8 characters, but it is also more compatible with other devices and smartphone applications. Using Cargo-XML also allows for easier partner onboarding. Compared to Cargo-IMP, Cargo-XML is more compatible with other standards of other industry bodies, such as the World Customs Organization (WCO).
Principally, all commonly used information in the Cargo-IMP messages is also available in Cargo-XML documents.
Importantly, Cargo-XML supports multimodal and cross-border messaging, as well as enables easier electronic data interchange, enhances process automation and better data quality. Improved data quality helps stakeholders to provide faster responses to the frequently changing requirements of the industry. Eventually, streamlining processes with utilizing Cargo-XML will lower costs.
Another benefit of upgrading to Cargo-XML is that it facilitates the implementation of IATA’s e-freight initiatives, including e-AWB and Advance Cargo Information (ACI). It doesn’t simply provide business rules that will help to improve efficiency but also strengthens compliance with regulations, such as the earlier mentioned ACI.
Cargo-XML’s enhanced datasets, the speed of implementation, and its ability to reuse messages and data will reduce the time required to document shipments.
4. Where do we see the benefits?
Besides the advantages listed above, we must emphasize that creating e-AWB with Cargo-XML is much easier than with Cargo-IMP. Potentially, Cargo-XML requires a lot less work in terms of enriching and validating data. However, Youredi has been successfully enriching and validating messages for major airlines to reduce manual labor required that is time and labor intensive.
Using a single standard format also enhances process automation as there is no need to do translation between systems. However, our cloud-based Integration Platform as a Service can seamlessly handle necessary translations, ensuring that the process automation is flawless.
Better process automation means for the industry that it is consequently becoming more competitive. The digitalization of processes and better message standards can reduce overall shipment times, not only lower costs but also increase customer satisfaction.
Technology supports a more competitive air cargo industry
Rapid transition from Cargo-IMP to Cargo-XML is the first cornerstone to ensure the competitiveness of the industry to better serve the needs of rapidly growing e-commerce and global trade. The transition from Cargo-IMP to Cargo-XML may seem like a daunting task, however, Youredi offers solutions for overcoming the burden of switching from the legacy format to the more modern and advantageous one. Once this simple task has been successfully implemented, you will be on the right path towards digitalizing your operations.