As it moves forward with the roll-out of RFID technology in key stations in its network to improve visibility as well as accuracy and speed of handling of freight, Air Canada Cargo is looking to extend the use of the technology to another market segment. It intends to leverage RFID in the handling of mail.

“Today, all carriers are scanning mail bags manually,” said Barb Johnston, manager of operation programmes, who has spearheaded AC Cargo’s drive to develop RFID in the warehouse.

“Manual scanning of mail is a laborious and time-consuming process,” she said. Using RFID tags makes the process hands-free and gives real-time visibility, she added.

AC has started to use RFID tags combined with barcode labels for seamless tracking across its network. (At smaller stations, where RFID would not be viable, the carrier continues to use barcode technology.) RFID readers are installed in warehouses to capture signals at six read points throughout the shipment process that is in the custody of the carrier, from goods acceptance over build-up to export for outgoing shipments and import, breakdown and delivery at the receiving end.

The carrier has been running pilot programmes with mail tags, which have yielded positive results, according to Johnston. There is no indication yet, though, when RFID scanning of mail will be actually implemented.

Cathay Pacific has also moved to scan mail, using barcode technology. The Hong Kong-based airline has rolled out scanning capabilities for mail in Hong Kong and China, and intends to deploy this elsewhere later on. Cathay has been working closely with the postal agencies in its home territory and in China.

Down the road, Cathay management intends to integrate various IT interfaces for real-time data flow, according to Mark Sutch, general manager of cargo sales and marketing.

For most airlines, postal agencies are key targets in their desire to capture some of the rapidly expanding international e-commerce market, as they do not have control over the pick-up and delivery parts of logistics.

“Our target customers for e-commerce are post offices who have as a key strategy targeting the e-commerce segment,” confirmed Sutch. For Lufthansa Cargo, activities that target e-commerce are chiefly related to air mail, a spokesman said.

Horst Manner-Romberg, principal of parcel logistics research and consulting firm M-R-U, noted that some Asian carriers are looking to small, hungry postal agencies in Europe to jointly go after e-commerce traffic. He mentioned SF Express, which has teamed up with the Estonian post, and YTO Airlines’ alignment with the Polish post office.

As their traditional letter business has been shrinking at alarming rates, postal operators have embraced e-commerce as the key to their survival. A number of postal agencies have developed services – either on their own or in cooperation with logistics partners – that go after e-commerce. Canada Post and China Post, for example, have developed brand identities that are strongly associated with e-commerce.

Few have the muscle to follow the example of China Post to develop dedicated air networks to move this traffic and are looking to commercial airlines instead to carry their growing international parcel flows generated by on-line retail.

Christopher Shawdon, vice president of logistics solutions, global transportation, at IT provider Unisys, stressed that the availability and quality of data plays a critical role in the shortening of transit times for this traffic.

“The ability to track at the piece level is imperative,” he said.

He noted that some low-cost passenger airlines are leveraging their fast turn-around times to go after parcel traffic. AirAsia, which carries some 500,000 shipments a year, is showing considerably more interest in e-commerce than in the traditional air freight business, he said.

By Ian Putzger

Air Freight Correspondent | Toronto