Isom 1700 - Warehouse Operating System (wos) and Materials Handling System (mhs)

Replacing the traditional paper-based documentation procedures, e-freight is a paperless electronic information exchange system. By inputting the data only once, the system will be automatically updated in the database, so all the related parties can access the latest information at anytime and anywhere. In this way, the integrated process and information sharing makes Cathay Pacific’s cargo operations a standardized business process, with increased efficiency and productivity.

Warehouse operating system (WOS) and materials handling system (MHS) are crucial to cargo operation as the former one is responsible for scheduling and prebooking while the later one handles import, export, and transshipment of cargo. A lot of document is required by MHS, like packing list, house waybill, export goods declaration, etc. All these paperwork takes a lot of delivery time and human resources to be sent to all related parties, not to mention the risks of mishandling due to human mistakes like misplacement of papers, inaccurate details. If mistakes happened, operation flow would then collapse and eventually lead to a mess. Yet, the integrated system (WOS and MHS) greatly reduced these risks, time and human resources. Since the process is computer-controlled and fully automated, the efficiency is greatly improved with its ability of bulk handling. For example, freight forwarders can send e-AWB to Cathay Pacific via Ezycargo, so both the origin sender and destination receiver can get e-AWB at once for the sake of data accuracy.

Information sharing is crucial to cargo operation as well since it facilitates global communication between different stakeholders. The more stakeholders such as freight forwarders and cargo company use e-freight, the more efficient the system is. Not only can information sharing benefits data transfer but it also enhances the cooperation. Under the system, information is compatible across systems, companies and even countries, so different stakeholders can easily transfer data, which eventually allow them getting the latest data immediately. To sum up, different parties can share the most updated and detailed information, and human mistakes can be minimized, avoiding delays or incorrect information.

Because of integrated process and information sharing, all different departments in the terminal can cooperate smoothly with seamless workflow, contributing to an efficient and highly productive business process.

When introducing e-freight process, Cathay Pacific was the industry leader. It was very proactive in bringing e-freight to the world, paying lots of efforts, time, money, and human resources. Not only was it the first airline of covering 100% e-AWB in HKG but it also aimed at covering 100% e-freight initiatives all over the world by 2015. Apart from leader, Cathay Pacific also played the role of coordinator in introducing e-freight process. As the implementation of e-freight requires cooperation from different stakeholders, like cargo customers and freight forwarders, cooperation was extremely important. Cathay Pacific paid a lot of efforts in getting different parties ready for e-freight. As the coordinator, it guaranteed the implementation to be successful.

Cathay Pacific encountered two main challenges when implementing e-freight: the difficulty in migrating systems from stakeholders (compatibility problem), the difficulty in convincing different parties to switch to e-freight and high rejection rate at the beginning.

In the past, different companies or departments had their own systems to input and store data. In order to switch to e-freight, all different systems need to be uniformed so data can be all uploaded to the single system, be viewed. Efficient and advanced technology infrastructure was required for transferring data in the process. Fortunately, the electronic data interface, which was used to transmit customs clearing information, could be easily migrated with Cathay Pacific’s. In fact, it operated ACCS, which offers a direct interface between the customs department and the air cargo terminal operators at HKIA. Therefore, clearance of all types of air cargo can be expedited at anytime and anywhere. In addition, Cathay Pacific launched user-friendly Ezycargo for freight forwarders in small scale and weak financial position (without their own ERP system) to submit e-AWB online. Along with online training sessions and detailed user manuals, small individual customers gradually changed to e-AWB system.

Since the customers and fright forwarders needed to invest capital and human resources (training), Cathay Pacific took time to convince them the benefits of e-freight. Not only did Cathay Pacific hold seminars to introduce e-freight’s cost saving benefits and its technology requirements, but it also sent sales representatives to individual customers to cover the roll-out schedule and potential obstacles. Though e-AWB seems cost-saving and beneficial to all parties in long run, customers may not willing to change and take the risk. To increase their incentives on agreeing on e-AWB, Cathay Pacific launched Ezycargo with online training and detailed user manuals provided. All these actions increased customers’ faith in e-freight so they gradually agreed on it.