iCargo wins wide support from Forum — and one 'big name' carrier

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iCargo wins wide support from Forum — and one 'big name' carrier Powered By Docstoc
					iCargo wins wide support from
Forum — and one ‘big name’
carrier will put it solidly in the
major international league
EARLIER this month the iCargo team and CGI member airlines met in Perth for the
2nd iCargo CGI Forum where iCargo Release1 was demonstrated via the web from
the IBS development centre in Trivandrum. As the system is still in its test phase
Aircargo Asia-Pacific was not able to see iCargo in action but airline representatives
and official observers in attendance gave it a big rap. The general consensus was
that iCargo performed “exceptionally well” and above expectations. After the
meeting, the founder and managing director of IBS, VK Mathews, talked to Aircargo
Asia-Pacific on the development and launch plans for iCargo and what is expected
to be breakthrough technology.
V K Mathews is the founder and managing director of the IBS Group, the company
developing iCargo.
Mathews, who holds a Master’s degree in Aeronautical Engineering from IIT Kanpur,
started his career in 1979, teaching computer science to army officers.
In 1981, he joined the IT division of Air India and played a key role in the
implementation of its computerised passenger services systems world-wide.
Subsequently, Mathews joined the Emirates Group as general manager information
technology. He was responsible for formulating and implementing strategies for the
airline’s global operations.
Mathews founded the International Business Services Group (IBS) in 1997. The aim
of the company was to provide IT solutions to the Travel, Transportation and
Logistics (TTL) industry. Today, the award-winning IBS offers a range of products in the areas
                                                                                                                - V K Mathews -
of airline operations, airport management, airline cargo, oil and gas logistics as well as
transportation.                                                                                  will support the new generation freight
                                                                                                 business using the new generation
IBS employs over 750 staff world-wide and is a SEI CMM Level-5, ISO 9001:2001 and TickIT
certified company. In September 2003, IBS acquired Avient Technologies, a business unit
within Honeywell International.                                                                  Which airlines are members?
Companies that have used IBS Group services include Emirates, Cathay Pacific, Qantas, Air          The core group of influence members
New Zealand, Swiss, SAA, Qatar Airways, Air Canada, WestJet, British Airports Authority,         — the group of select airlines we are
Dubai Airport, Cendant, SITA, EDS, Orbitz, Shell, BP, Unocal, IBS is represented in the USA      developing the system with — includes
(Atlanta), Europe (London), Middle East (Dubai), Asia-Pacific (Sydney) and India (Trivandrum     Air New Zealand, Qantas, Gulf Air
and Cochin).                                                                                     and South African Airways. These
                                                                                                 carriers will give input and validate the
                                                                                                 functional architecture of the system.
Why was iCargo created?                            technologies. The older systems tended
                                                                                                 Is there a qualifying criterion for airlines?
  VK Mathews iCargo’s time has                     to be built by specialists for specialists
                                                                                                    We want airlines that are successful
come. The industry is currently served             and as a consequence required an
                                                                                                 and stay in business by being innova-
by legacy systems that are not geared              enormous amount of training to be able
                                                                                                 tive. There are two types of airlines.
for today’s world of e-commerce. In                to use the system effectively. iCargo is
                                                                                                 Those that are protected and those that
fact some of the systems in use today              built by specialists for use by ordinary
                                                                                                 think smart to stay competitive and
were built over 40 years ago using                 people. That is the core difference.
                                                                                                 profitable. We want to work with the
legacy technologies and therefore                  There is an absolute compelling
cannot take advantage of the emerging              business need for building a system that
                                                                                                                            Continued next page.
                                                                                                   AIRCARGO ASIA-PACIFIC, NOV-DEC 2005 • Page 23
 over next two years
 From previous page.

 Are any of the major cargo carriers in the
 industry moving to your product as well?
 After all, whilst big in their own markets,
 these four foundation carriers are not in the
 same league as say an LH, SIA, JAL or
 Korean and you will need a big player at
 some stage to provide critical mass.
   We didn’t want a very large carrier at
 the formative stages of iCargo because
 large enterprises are relatively more
 conservative and time consuming, and
 could cause delay to the aggressive             will need around 6-12 months of                the core development group. They will
 build plan that we have for iCargo. We          planning to become involved.                   be able to influence its design and thus
 are in discussion with a number of                                                             have the product support their cargo
                                                 What are the major differences between
 large carriers and will bring a large                                                          business strategy. They have the option
                                                 your new system and that of existing systems
 airline on board a little way down-                                                            but not the obligation. The final
                                                 provided by companies such as Unisys and
 stream and I am sure that by the time                                                          version of the product is not ready. It is
 we go live we will have a large airline                                                        still in test phase. The product will be
                                                    The key difference is the core value
 signed up.                                                                                     released next month. We first had to
                                                 proposition of iCargo.
                                                                                                establish our bona fides with the
 How many airlines are needed to make the          It is about how iCargo can help an           airlines. We had to show we could
 new system work?                                airline achieve profitability and how          create and deliver a system to meet
   We would like to attract a certain            iCargo can respond quickly to changing         their needs. We had to show our track
 number of airlines but achieving that           customer needs.                                record was credit and that systems we
 objective and the time frame is not an             It is about how iCargo can help an          have previously created, both passenger
 imperative for system’s viability. We           airline respond to the market condi-           and freight, achieved market objectives.
 expect that by 2006-8 we will have six          tions that they have no control over —         That is the purpose of the core mem-
 airlines in the group. Cutting over             the impact of SARS or a bird flu               bership group.
 from the current airline reservation            epidemic or the disruption caused by
 system to a new generation cargo                wars and terrorism. These events can           What is the time-frame to implement?
 system will be a very intense activity          significantly change the pattern of               The first phase is due out later this
 for an airline. Cargo reservations              cargo movements around the globe.              month (December). The second release
 systems are business/ mission critical          Airlines need to be able to react quickly      is due out in September 2006 and that
 since the freight business will not make        and cost effectively. We provide this          is the release I expect most of the core
 a single dollar without making a                ability with iCargo. iCargo will help          group airlines to opt for. I expect the
 reference to its reservations system.           airlines elevate their role as “freight        implementation to be as early as late
 The reasons why airlines have not               service owners” rather than “freight           2006 or it could be early 2007 depend-
 opted for new technology systems in             service operators” by effectively              ing on progress and acceptance.
 the past are that the move can be               operating as a “virtual enterprise”.           Feedback so far with the demonstration
 extremely disruptive, and the technolo-         Another benefit of iCargo is its ability       site has been very positive.
 gies have not matured to meet the               to be flexible in time with seasonal
 performance demands of such a real-                                                            Your web site promotes that iCargo will
                                                 fluctuations in demand for cargo space         “support the needs of the entire shipment
 time application. What has changed is           and appropriate rates. With current            chain”. What does that mean for
 that technology has advanced consider-          legacy systems it is impossible to             forwarders?
 ably in the last few years and there are        change according to market circum-               If one looks at the supply chain from
 matured IT processes now to build               stances. The systems are rigid and not         the shipper to the consignee there are
 large and complex applications such as          able to deliver dynamic structuring.           many options. For airlines the perform-
 iCargo. Most other businesses have              They are still using legacy languages          ance is significantly affected by how the
 already made moves to adopt new                 and methods.                                   other players in the chain perform their
 technology solutions. The airlines must
                                                                                                roles. Are they (other players) support-
 do the same or get left behind. If 20           Have QF, NZ, SA, GF made a firm
                                                                                                ing your (the airlines’) established
 airlines are willing to come into iCargo        commitment to your product or are they just
                                                 “looking” at this stage?
                                                                                                service levels? In fact, using iCargo one
 would we be willing to cut over 20
                                                    We have signed agreements with              could insist that the protocols built in
 airlines in one go? I don’t think so. It is
                                                 these airlines making them members of          are used. Or service levels can be
 a question of preparation and airlines
monitored and tracked using iCargo.             Yes iCargo is fully web-enabled and           messaging architecture which will help
My ambition is that iCargo could well         fully interfaces with other systems.            airlines implement new messaging
become the industry standard or                                                               protocols and structure effortlessly.
                                              The move to a new cargo system is obviously
benchmark for monitoring service
                                              a huge investment for airlines in time, money   Will iCargo make use of RFID tracking?
standards. Especially if it is adopted by
                                              and human resources. What is your track           Yes we expect to be one of the first
all airlines and also by all the players in
                                              record in relation to implementing systems      systems to use RFID technology and
the industry -the forwarder, shipper, the
                                              on such a scale?                                iCargo will be RFID enabled. But we
handler, and the trucker they could all
                                                On the passenger side we have                 have to ask what does it mean by RFID
use this service. That is how we have
                                              recently created and built a new                enabled? One could see RFID tags used
built the iCargo system. Basically it
                                              reservation system called aiRes in a            as a medium of input to the system like
gives an airline the opportunity to
                                              joint venture with the giant US Com-            somebody keying into the desktop or
become as service owner rather than a
                                              pany Cendant, and it is currently being         keying in using a hand-held system and
service operator.
                                              implemented for Canadian low-cost               an electronic RFID tag is communicating
Are you expecting that forwarders will use    carrier Westjet.                                with the system. This is one way you
the web-based iCargo system too, in how         It will also be taken up by an airline        will see RFID technology used. The
they work with the iCargo carriers?           in Asia but I am not at liberty to say          second one is based on the initial
   They will have the option to use it. It    who. We have also recently designed             information that is fed into the system
is up to the airlines to actually insist      and built a global logistics management         and how that can be leveraged for
whether the forwarder should use it.          system for Shell which will be rolled           business purposes and re-engineering
We have to look at the separate needs         out globally across all of Shell’s 32           those kind of activity. That is currently
of the forwarder as they may not              companies.                                      being worked out. It is not a question of
always be the same as                                                                                 us building the capability but
that of the airline. We                                                                               more a question of how it is going
have to look to see if
they have the facility           We first had to establish our bona                                   to be used and managed.

                                                                                                      In what way is iCargo going to
to configure the
system in such a way
                                 fides with the airlines. We had to                                   actually help deliver a better level of
                                                                                                      service to the forwarder and the
that it will suit
forwarders as well.
                                 show we could create and deliver                                     shipper?
                                                                                                         Shippers will appreciate iCargo
You mentioned that a                a system to meet their needs.                                     as it gives total tracking capability
large carrier would come                                                                              to the shipper. Surveys have
on-line later. What is                                                                                shown that most shippers demand
your ideal time frame?                                                                        reliability. In the last survey I saw, 43 per
                                              In what ways does iCargo fit with the
   The system does not really need a                                                          cent said reliability is the most important
                                              various initiatives underway in the industry
major airline as such; however we are                                                         factor; for 27 per cent cost is the major
                                              at the moment such as Cargo 2000, IATA
talking to a major carrier and expect to                                                      factor and for 19 per cent it is the time
                                              eFreight, and the programs of GF-X, Cargo
make an announcement early next year.                                                         factor. From the shippers point of view
                                              Portal Services (CPS) and Ezycargo?
The problem with getting one of the                                                           he will know with iCargo where his
                                                 E-freight is the IATA initiative to
giant carriers to come on board with                                                          shipment is at any time and this will
                                              create a paper-free but not paper-less
iCargo at the build stage is that some-                                                       provide reliability. For the forwarder he
                                              system by 2007. We are supporting the
times the sheer size of the airline means                                                     will be able to see the movement plan
                                              initiative 100 per cent and in fact Aleks
that decisions can take longer and thus                                                       complete with alerts and messages back.
                                              Popovich, IATA’s new global head of
the iCargo delivery plans could be                                                            The forwarder will have full visibility of
                                              Cargo attended the iCargo Forum
impacted. Also we do not necessarily                                                          the shipment and be able to prepare the
                                              meeting in Perth and presented del-
want or need a big airline to influence                                                       shipment plan up to the shipper level.
                                              egates with an update. We will be
the iCargo design to work in legacy                                                           The shipper will have direct access.
                                              attending all E-freight forums and will
ways; the system is not designed to
                                              ensure that iCargo supports the IATA            What is the cost to the forwarder?
operate that way. iCargo not only
                                              initiative. With Cargo 2000 we are                 Ultimately it will be a commercial
employs modern technologies, it
                                              fully compliant. iCargo is 100 per cent         decision. The ability for an airline to
supports modern business practices.
                                              web enabled we don’t need another               offer the kind of flexibility we are
Are you expecting that forwarders will use    portal on top such as CPS or GF-X.              offering is a big step up. The system is
the web-based iCargo system too? How will        If one looks at the traditional              much faster. There is no duplication in
they work with the iCargo carriers?           systems, they are also web-enabled. But         iCargo. Forwarders can directly talk to
This would simply not be feasible.            if you look at these legacy systems they        iCargo to find the status of a shipment.
                                              may have over a thousand, if not more,          It will be up to the forwarder to see
So presumably iCargo is going to interact
                                              transactions for the users, but only a          what level of service he wants to offer
with the various forwarder systems the way
                                              small per cent will be web-enabled.             his or her customers.
that existing cargo systems do today?
                                              iCargo has supremely sophisticated
                                                                                                AIRCARGO ASIA-PACIFIC, NOV-DEC 2005 • Page 25