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● Receives from the consignee other paper documents that are legally required in paper format, eg CITES certificates, via courier directly.
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● Receives from the carrier at destination or the GHA the arrival notification, as well as the air waybill together with the trade documents, eg invoice, packing list and where legally feasible the Certificate of Origin from the ‘pouch’ by courier.
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● Prepares the Customs import goods declaration prior to the receipt of the shipment by the consignee.
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● Lodges the Customs import goods declaration to clear the shipment providing any additional paper documents if requested.
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● Undertakes ancillary services as instructed by the consignee, such as pickup and delivery of the shipment.
6. GHA
Where the airline does not operate its own warehouse facility, a GHA may be used to provide those services at the departure point, destination, transit point, or all three. The GHA has to deal with all the Customs procedures relating to the handling of the goods:
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● Receives the shipment with the ‘pouch’ from the cargo agent, and gives it to the ramp handling agent for transfer to the aircraft.
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● Provides a warehouse receipt to the cargo agent to confirm the freight weight, volume and number of pieces received.
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● Lodges the Customs export cargo declaration at origin and relays the data back to the carrier for onward transmission to destination.
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● Imports: accepts the freight off the inbound flight and notifies the Customs broker/agent/consignee and provides, if need be, a delivery note to the receiving import broker/agent at destination to confirm the freight weight, volume and number of pieces delivered.
GHAs’ IT history
At first, GHAs used the airlines’ computer systems to run their sheds; this practice is still very prevalent especially in the United States where airlines have a strong influence and the home airlines’ cargo systems tend to be very weak in terms of EDI. One major exception to this is Cargo Airport Services (CAS), which developed Ipic; it has used this to become the largest GHA in the Americas. For some reason, US airlines have not adopted EDI to the same extent as European or Eastern carriers and this is now holding them back with regards to modern requirements such as efreight and security.
Very few GHAs created their own systems, even though using an airline’s system did nothing for their business. How could you meet local Customs regulations or even charge for your services if the data resided in the airline system? In the United States it didn’t matter too much. This is because the tendency there was for one airline to be housed in one warehouse, so if a GHA had three airlines contracted to it, it would have three separate facilities.
Paper was used to control the business and this is still true today in the majority of US facilities.
Certain GHAs were not content with a paperbased system, so Cargo Service Centre (an offshoot of KLM, now part of CAS) created its own system, CASCADE. In the United Kingdom ABS was already in the majority of facilities due to the UK Customs requirements for electronic inventory control, and a few GHAs in Scandinavia adopted the SITA FAST 4 system for their own use.
Lufthansa systems followed with its ELWIS system, which was installed all over Germany, and the massive Cargolux facility in Luxembourg. In the UK, with its special requirements, Lufthansa worked with BT to create its own GHA system COMET. The fact that this system looked very similar to ABS is probably down to the fact that BT also developed that system, thereby
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having two teams creating competing systems in the same technology at the same time in the same offices.
Nearly all these systems were created in the early 1990s with ‘green screens’ or if lucky DOS PCs. Technology was moving at a rapid pace, and two companies decided that the time was right for a new system. The British Airways software house Speedwing Logica created the Mercury handling system based on Oracle RDBMS and developed in the COOLGEN rapid development system. It had several successes in Indonesia, Kenya, Zimbabwe and Tanzania and captured a major customer in Ogden cargo. This system has been reengineered and is now part of the GALAXY suite offered by Kale Consultants of India.
The second solution came from an established software company based in Switzerland. Software AG had created a modern PCbased GSA system called Cargo One and enhanced it to cover GHA functions. This was just a stepping stone to creating a full airline system known as CARGOSPOT, owned and marketed by CHAMP (a joint venture between Cargolux airlines and SITA).
In the early 2000s Menzies Cargo decided that it could create competitive advantage by developing its own system. It worked with external software houses, eventually forming a partnership with Magic software of Israel to create the HERMES system. This system had handheld terminals and servicelevel management at the heart of its system and was a major leap forward in GHA operational systems. Needless to say, it took a long time for the other systems to catch up, but they have. Now, Hermes is not selling as well, support is an issue and the big screens showing service levels have vanished from the Heathrow sheds.
Today, the market is dominated by a few solutions. ELWIS is still there in about 18 sites but signs of its replacement are appearing, such as a recent RFP issued to replace it at a major German airport. I am not aware of any new major sale of this system for several years and LIS seems to have stopped or curtailed its marketing of this product.
Cargospot is the dominant system outside the UK. In particular it is the standard solution employed by the two largest GHAs in the world: WFS and Swissport. It is, however, suffering from the number of installations (as each country has its own idiosyncrasies) and age and is likely to be replaced within a few years.
Kale is marketing the GALAXY system and has picked up Bahrain as its latest customer plus others in India. ABS has just released its ABS5 system, which includes the latest warehouse management system and truck handling and is one of the major players with over 100 sites utilizing its product. It
has already replaced HERMES within one major Spanish organization and is likely to do the same for others in Europe. The key to its resurgence is the level of investment in the product each year together with the support given to all customers so that even its newest customers can utilize the system to its full extent. The GHA sector is one where the IT systems need continuous investment to remain legal as well as competitive, but with the airlines only bothered about reducing costs, how can the GHA afford to continue to fund the changes required?
Conclusions
The air freight business as regards airlines is still tens of years behind the passenger business in adopting etrade standards and procedures. There are many reasons for this that are heavily entrenched in the parties involved.
The IATA efreight programme is running way behind schedule and will continue to do so as long as the airlines keep using antiquated systems and demand GHAs use them instead of generic GHA programmes. Airlines do not realize that if the GHA has no system of its own, without a paper trail it cannot accept efreight consignments. While IATA has tried to identify the procedures involved in efreight, it ignores many aspects such as the forwarder delivery and pickup process and all the processes that take place in the warehouse. Efreight is not going to become the normal method of doing business unless all parties in the supply chain adopt it and back it with system changes.
The new security initiatives requiring data five hours before departure are likely to have a major positive impact on the availability of data from shippers and forwarders, and this will put the responsibility for data quality where it belongs – at the start of the supply chain. The airlines will benefit from this availability of electronic data, but only those that reengineer their processes to eliminate paper within their own businesses will reap the financial rewards. The next few years are going to be very interesting as finally the air freight business is forced to change. In the GHA business, rationalization seems to be the order of the day but this can only go so far until competition is reduced and new operators see an opportunity. GHA contracts tend to be very shortlived with getout clauses of one to three months common.
Customer churn is a fact of life for GHAs but the continual reduction in price will have to stop at some point otherwise there will be a major corporate failure that will have farreaching consequences for this business. Airlines need to focus on quality of handling, adherence to regulations and exchange of accurate data to move this business forward.