While remote work and virtual meetings now seem second nature, for many in the logistics industry, the pandemic pushed them into the digital age and a more paperless environment much faster than they ever imagined possible.
But despite this acceleration, many industry leaders had in fact been prioritizing the move to digital documentation for some time. They knew that relying on paper to run efficient supply chains was not just unproductive, but a potential recipe for disaster in the long term.
That’s because the exchange of electronic transactions and digital documents across the logistics ecosystem can completely transform complex business processes. Regardless of the mode of transport, it is an efficient, economical, and secure method of transferring important business information related to the transportation of goods.
Substantial benefits of electronic documents
In addition to everyday transactions such as orders or invoices, electronic data exchange in logistics ensures the operational interaction between business partners (buyers, suppliers, 3PL warehouses, forwarders, etc.) at all stages of a shipment’s lifecycle.
“Speed has always been a priority for logistics companies,” says Aurelie Zengerlin, Business Development Executive at WiseTech Global. “You need to have access to your documents at a moment’s notice, from air waybills and bills of lading to manifests and cargo loads, purchase orders, invoices and much more.”
According to Zengerlin, in the face of lockdowns, many logistics companies who had resisted moving to a paperless supply chain saw their operations slow down significantly, with access to hard copy documents and records in the office no longer a viable option.
“It was a real ah-ha moment for many logistics leaders,” she says. “I don’t think anyone could ever have imagined the scale of the lockdowns and the fact that the over reliance on paper and manual processes just simply wouldn’t cut it in the face of this type of disruption.”
Angela Gadaev, International Logistics Product Portfolio Manager at WiseTech Global, agrees and says that those companies that had started to adopt more automated and paperless processes, were on the front foot when the pandemic hit.
“We know logistics providers have to manage incredibly high volumes of disparate, non-digitized data and that processing these paper documents incurs costs and takes time,” Gadaev says.
“Moving to electronic documentation reduces the hours spent managing, filing, searching, updating, and sharing manual documents while trimming costs at the same time. It keeps all your information in a secure location, with flexible visibility controls based on a company, branch, or department, so only approved individuals or teams can access specific files.”
Freight forwarders still face challenges moving to electronic documentation
So why, then, is the logistics industry and some freight forwarders behind other sectors when it comes to the adoption of electronic documentation?
Concerns relating to a lack of standardization of electronic documents is one of the obstacles slowing down a broader adoption among carriers and companies in the logistics sector.
“There are limited universal standards for electronic documentation. Therefore, based on mode of transport and country of origin or destination, paper documentation may be required for one or all records associated with a shipment," says Gadaev.
"Air cargo as a mode of transport does have advanced standards when it comes to digitalization of the air cargo process, established many years ago due to the necessity of speed. But even these mature processes continue to evolve as the industry grows and regulatory compliance needs grow too."
Of course, another factor that may slow down the adoption of electronic documentation is internal resistance.
According to Scott McCorquodale, Head of Airline Connectivity at WiseTech Global, it can sometimes be difficult to convince companies to break away from the traditional way of doing things and adopt new tools that involve changing internal models or investing in technology to create, transfer, and store documentation. However, if this is overcome, it can help the business move forward.
“In simple terms, we can often put this reticence down to fear and uncertainty,” he says. “A safe and steady evolution has always been preferable to a drastic revolution, but with many logistics leaders feeling like resistance to change is the biggest impediment to digital success, it’s time for all of us to shift our thinking.”
Electronic documentation gaining steam
However, that is slowly evolving, at least in some of the world’s more developed and significant segments.
In 2020, the International Air Transport Association (IATA) announced an industry goal to achieve 100 percent electronic air waybills (eAWB) by the end of 2022. This initiative is also pushing cargo toward digitization. For example, Lufthansa Cargo announced in February 2022 that it would follow IATA’s lead, beginning with the summer schedule on March 27, 2022, when all shipments on feasible lanes needed to be carried as eAWB only.
Additionally, in August 2024, the European Union’s Electronic Freight Transport Information is slated to go into effect. This regulation is expected to provide a legal framework for authorities to accept freight transport information in electronic form as a valid format, eliminating the need for documents to be printed.
“I think everyone would like to get to full digital documentation. Thankfully, we have some very progressive airlines, who do set a great deal of the industry direction, working toward that,” McCorquodale says.
“So, we could be at the beginning now of a further push on digitalization of their cargo process. And CargoWise is very much a part of that because every air cargo shipment generated in the platform, for example, is electronic. As a result, data is now always sent by default, unless the forwarder consciously chooses not to send it.”
Looking towards a more paperless and productive environment
According to Zengerlin, lost productivity isn’t only about what employees are not doing well, it’s also about what they could be doing a great deal more efficiently if people are redeployed into areas where they are needed, rather than bogging them down in paper processes and data transfer tasks, much of which can be automated.
“Logistics is a process-driven industry. Every day, tasks are being repeated over and over – with varying degrees of manual or expert input,” she says. “Eliminating labor-intensive, repetitive, error-prone activities that rely on physical paperwork is always the best option and automating and accelerating such tasks will yield immediate and significant benefits to your business.”
For Gadaev, this is one of the biggest take-aways from the push to EDI and a more paper-free environment.
“What happens is your staff will be liberated from the time-consuming, repetitive parts of their responsibilities to focus more on improving customer service and broadening their skillsets. Space is created for them to be able to draw on their accumulated knowledge of the business and understanding of your clients – rather than their ability find pieces of paper or key in data” she concludes.
Contact us today to learn more about the cost of relying on paper-based processes, and how technology is helping logistics companies make the move to a more automated and productive environment. Get in touch