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CHAMP Cargosystems CEO Chris McDermott talks trade facilitation

November 28, 2024 - 6 minutes reading

CHAMP Cargosystems, a leading supplier of integrated IT solutions to the air freight industry and an Alliance Global Business Partner, has an applications portfolio spanning core cargo systems, enterprise systems and community and distribution services, compliance services, and freight forwarding solutions.

 The company helps its partners reduce costs, maximise yields, and achieve industry compliance. As such, it is perfectly placed to provide perspective on the challenges and opportunities spawned by lucrative global e-commerce sales, estimated at US$ 4.1 trillion by end-2024.

In a wide-ranging interview with the Alliance, Champ CEO Chris McDermott discusses the role of trade facilitation in maximising the benefits of e-commerce among other things.


Q1: 
E-commerce is often described as an unprecedented opportunity to democratise trade, allowing smaller businesses access to the benefits of a global economy. However, the sheer volume of small parcels is causing headaches for customs and other border agencies. What role might the work of the Alliance – and trade facilitation in general – play in helping relevant agencies to handle the increased workload? E.g. AEO?

The Global Alliance for Trade Facilitation’s guidelines can help harmonize trade practices, reducing the need for extensive paperwork and manual processes when engaging with the public sector. The Alliance can also provide guidance and resources to help governments establish and operate Authorised Economic Operator (AEO) programs, which work to streamline customs clearance procedures for trusted traders and reduce administrative burdens.

The private sector side helps by promoting the adoption of technology. Trade facilitation initiatives often encourage the use of electronic data interchange (EDI) and other digital tools, streamlining communication and data exchange. For example, at CHAMP, we are helping airlines to file transport data at item level which significantly reduces the processes at destination.


Q2:  
Customs and other agencies have increased the responsibility on businesses regarding compliance in recent years. How might MSMEs, with limited resources and mainly trading through e-commerce, continue to access the benefits of the global marketplace while meeting greater compliance obligations?

MSMEs often face unique challenges when navigating the complexities of global trade. With limited resources and a heavy reliance on e-commerce, they must find ways to meet increasingly stringent compliance obligations while maintaining their competitive edge.

However, if they operate in the e-commerce space, it means that they can use the internet to expand market reach, reduce costs with online tools and most importantly, access critical information. By subscribing to trade news, they can be kept up-to-date with changes in regulations, trade agreements, and market conditions.

Groups like the Global Alliance for Trade Facilitation can offer support and advice on compliance issues.

 

Q3: There has been an increasing global focus in recent years on trade and the environment. How might air transportation become more sustainable?

The aviation industry faces significant challenges in achieving net-zero emissions by 2050 due to the inherent carbon intensity of air travel. However, there are lot of initiatives to make air transportation more sustainable:

Sustainable Aviation Fuels (SAF) can be produced from a variety of sources, reducing carbon emissions compared to traditional jet fuel, but scaling up production and ensuring affordability remain significant challenges.

Aircraft technology advancements, such as the development of fuel-efficient aircraft and emerging electric and hybrid-electric aircraft, offer potential solutions or software solutions such as SITA OptiDirect which provide shortcut opportunities based on historical tracks flown to save time, fuel, and emissions, all investments contributing to improve aviation efficiency.

CHAMP has also developed software tools with sustainability in mind, like Cargospot Weight & Balance which optimizes aircraft’s centre of gravity, not only ensuring safety but reduce fuel consumption and carbon emissions.

In embracing digitalisation, there are also often numerous sustainability advantages such as eliminating paper documents, enhanced energy efficiency, and decreased waste. This is also true of improving operational enhancements through optimized flight paths and modernized air traffic management, which can contribute to reducing aviation emissions.

By currently embracing a multi-faceted approach, the aviation industry is making significant strides towards a more sustainable future.

Q4: Digitalisation is often described as the holy grail to streamlining international trade, but paper processes still predominate. How does IATA’s ONE Record initiative improve the air cargo industry, and what steps is CHAMP taking to support its adoption?

The air cargo industry is on the cusp of a digital revolution with IATA ONE Record, a global initiative that’s set to redefine how data is shared across the entire supply chain. Imagine a world where every shipment has a single, standardized digital record, accessible to all stakeholders in real-time.

This is what ONE Record stands to offer, a solution that eliminates the inefficiencies and errors associated with traditional paper-based documentation and silo data systems.

By providing a single source of truth for all shipment information, ONE Record unlocks a new level of efficiency, accuracy, and transparency.  This means faster processing times, reduced costs, and improved decision-making for everyone involved, from airlines and ground handlers to freight forwarders and customs authorities.

However, transitioning to this new era can seem daunting. Many companies perceive ONE Record implementation as complex and expensive. CHAMP’s 1Neo-Connect solution, powered by an innovative “Super-Node,” simplifies ONE Record adoption by providing a centralized and easy-to-use API. Think of it as a universal plug-and-play adapter for the air cargo world.

With 1Neo-Connect, businesses of all sizes can seamlessly connect to the ONE Record ecosystem without the need for major IT investments. Leveraging our extensive network of airlines, ground handlers, freight forwarders, and customs authorities, we make ONE Record accessible to everyone.


Q5:  
As an Alliance Global Business Partner, you believe that the private sector has a role to play in socio-economic development. What attracted you to join the Alliance and how do you envisage trade facilitation in general might benefit governments, companies, and consumers?

From the perspective of a leading air cargo IT provider, the Alliance’s work in engaging the public sector is essential for helping airlines to be more efficient in moving goods. By promoting the adoption of standardized trade procedures and technologies, the Alliance can help to reduce the administrative burden on airlines, ground handlers, freight forwarders and facilitate the smooth flow of goods across borders. This, in turn, can lead to lower costs, improved customer satisfaction, and increased profitability for the air cargo industry.

In other words, we believe that trade facilitation can offer significant benefits to governments, companies, and consumers. For governments, it can help to streamline customs procedures, reduce administrative burdens, and promote economic growth. For companies, it can lead to reduced costs, improved supply chain efficiency, and increased market access. And for consumers, it can result in lower prices, a wider range of products, and faster delivery times.

Q6: The industry is obviously changing very quickly. What do you think air cargo transport will look like for your customers and the customers they service in 2030 and beyond?

We envision air cargo transport in 2030 and beyond to be characterized by enhanced digitalization, automation, and the implementation of ONE Record. These are the foundations upon which we will see more efficient and transparent supply chains, reduced costs and improved performance, and data driven decision making.

The availability of real-time data and advanced analytics will enable airlines, ground handlers and their customers to make more informed decisions, optimize operations, and identify potential disruptions.

With a higher volume and quality of data, we will also see significant progress in the capabilities and adoption of AI technologies across the air cargo industry. However, this is highly dependant on the data we have available which means advancing digitalisation now is key in realising these benefits in the future.

Last but not least, there will be a growing focus on sustainability, with the air cargo industry and their customers adopting more environmentally friendly practices and technologies.

By embracing digitalisation, automation, data availability and sustainability, we can build a more efficient future for air cargo.

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