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Tracking aviation s workhorses
by Prof. David C. Wyld, Southeastern Louisiana University
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his past May, the Official Airline Guide s research unit, OAG Analytical Services, released its most recent report on the international air freight market. The OAG found that even in the midst of challenging economic times for the world s airline industry, with lowered trade volumes, rising fuel prices, and heightened environ-
Global Identification - October 2008
As airlines aim to increase savings in turbulent times, we take a look at how RFID can be used to track and identify Unit Load Devices, an often overlooked yet integral component of the industry
mental and security concerns, the air cargo market is still relatively strong. The International Air Transport Association s (IATA) most recent year-over-year traffic statistics (through to May 2008) show that over the past 12 months, world air cargo shipments have grown by an anemic 1.3%. However, buoyed by rising demand from developing
nations and China, along with liberalized air routes between the U.S. and both China and EU countries, the OAG expects the worldwide air cargo shipment market to grow by just over 6% annually over the next decade. As can be seen in the data on page 12, Air Cargo World s July 2008 ranking of the world s busiest airports for freight shipments shows
The management of ULD fleets is a problematic activity for airlines, an area where inefficiency is rampant
fast growth in leading shipping centers globally, from the major hubs for FedEx in Memphis to the emerging trade centers in Asia and the Middle East and to major hubs for various carriers around the world. Boeing estimates that global demand for air transport ‒ and airplanes ‒ will surge over the next two decades
‒ growing by over 80% in that time span. The leading commercial aircraft manufacturer projects that as the volume of world air cargo shipments will in fact triple over the next twenty years, the number of freighters in service will need to roughly double. To accomplish this, the world air freighter fleet
‒ which will comprise over 10% of all commercial airplanes in 2027 ‒ will need to grow considerably. As can be seen in the data on page 12, this means high growth rates in the sales of commercial aircraft, especially larger in the sales of freight aircraft, which can transport a higher volume of freight per flight over longer distances.
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on commercial flights and grouping luggage destined for the same destination or the same flight together for loading onto the aircraft. There are even specialty ULDs, able to handle special items like horses. For cold chain transport, ULD containers can be equipped with on-board refrigeration units. The second general category of ULD is the pallet. These are not routine industrial pallets. Rather, they are specially built pallets made out of rugged sheets of aluminum and equipped with rims designed to lock onto cargo nets.
What exactly are ULDs?
The World s 25 busiest airports for air cargo shipments. Source data: Air Cargo World, The World s Top 50 Cargo Airports, July 2008
Airplanes in service, 2007 to
The humble Unit Load Device (ULD) is at the heart of today s global air freight transportation system. There are two general types of ULDs ‒ containers and pallets, known in the shipping industry as cans and pods.
In all, there are over one million ULDs somewhere in the world today, worth an estimated one billion dollars. Each ULD is identified with a unique code, using a systematic scheme from the IATA. This alphanumeric identifier, which contains the type, serial number, and air carrier owner of the ULD is stamped or embossed on the side of each can or pod.
A management nightmare
2027. Source data: Boeing, Inc. (2008). Summary Outlook 2008-2027: The Transformation of Air Transport.
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ULD containers are fully enclosed containers made entirely of aluminum or, for see-through versions, a combination of aluminum and Lexan. Containers are used for handling cargo ‒ able to be easily loaded on both the main and lower deck of freighters. They are also used for pre-loading passenger baggage
Global Identification - October 2008
Yet, the management of ULD fleets is a problematic activity for the world s airlines. It is an area where inefficiency is rampant and real-time intelligence is noticeably lacking. For anyone that routinely travels, all the evidence of the scope of the ULD management problem can be easily found by simply gazing out the window
of your jetliner. As you wait for the captain to push back the plane from your departure gate, you will see dozens of ULDs scattered on the tarmac from your window seat, waiting for use. As you taxi to the runway for takeoff, you will likely roll past the airport s freight area, where large freighters operated by FedEx, UPS, DHL and a host of other cargo carriers are parked. You will often see hundreds of ULDs on the tarmac, some located near the airplanes waiting to be loaded onto the aircraft or waiting for their cargo to be offloaded onto trucks for delivery. Others are just seemingly parked on the tarmac ‒ waiting for use. The key is the waiting. In order to ensure that the proper number and type of ULDs are available at a given station for the flow of incoming and outgoing air cargo, air carriers must have an abundance of ULDs available to ensure adequate stocks at each airport. Ensuring ULD availability is not a cheap ‒ or easy ‒ proposition. In fact, according to industry analysis, airlines typically have to purchase 4 or 5 complete sets of ULDs for each ULD-carrying aircraft in their fleet to have the proper mix available. As a consequence, air carriers must make a significant capital investment ‒ truly an overinvestment ‒ in their ULD stock to ensure their operational performance. Due to the intensity of their use and the mechanical and hu-
man interactions with ULDs and their cargo contents, on average, each ULD will need to be repaired 2.5 times each and every year. Furthermore, industry records show that, on average, carriers lose 6% of their ULD inventory each year, primarily as carriers ship ULDs between their systems. In fact, air carriers spend over $200 million annually maintaining their current units and replacing lost and abused ones to maintain an adequate working fleet of ULDs. One of the reasons for the current inefficiencies of the ULD market is the sheer vari-
there have been no trials in the area of ULD management. Pankaj Narayan Pandit, a principal consultant with Infosys Technologies airlines practice, believes that the airlines adoption of RFIDbased tracking systems for ULDs will be the gateway action leading to further use of RFID in the airline business. This is because the investment in the tracking infrastructure will enable a whole host of further applications, most notably in the areas of baggage and cargo handling, spare parts management, and equipment
rather than at the item-level. A significant industry development that might very well accelerate the deployment
ULDs may seem like a common sight at airports, but their importance is crucial
At present, each ULD is identified with a unique code from IATA, stamped or embossed on its side ety of ULDs needed for use in both passenger service (for transporting baggage and light cargo) and in cargoonly service. As can be seen in the data on this page and the next, the mix of ULDs and pallet-types necessary for operating an air carrier s fleet can be a quite complex management puzzle.
The benefits of auto ID in ULD management RFID is one of the five core elements of IATA s Simplifying the Business program, which has the objective to modernize business practices and extract $6.5 billion in annual savings for the world s airlines. To date,
maintenance and inspection, both on the ground and on board the aircraft. Yet, while there will need to be significant investments in readers and software for ULD tracking across an airline s network, the good news is that the airlines will gain intelligence on baggage tracking through their investment in ULD tracking ‒ and at far less cost than tracking individual pieces of luggage. This is because with RFID-tagged ULDs containing dozens of pieces of luggage, air carriers could at least gain intelligence on lots of luggage, much as manufacturing and retailoriented firms choose to tag at the pallet or carton-level,
of RFID in the tracking of ULDs is the fact that airlines are increasingly choosing to outsource the management of their ULD inventory. There are several firms competing in this marketspace, all with the same basic proposition of managing this non-core function for the world s air
A breakdown of ULD) by types (pallet volumes shown are built 64 in tall for lower deck loading. Height limit for main deck depends on aircraft type) Source: Wikipedia, Unit Load Device, July 2008.
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photo by Cody Banks
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software systems available for managing ULD inventories, the actual identification of individual units is still carried-out today as it was decades ago ‒ manually reading and logging the IATA-standardized identifying code painted or stamped on the outside wall of each container.
Unit Load Device Capacity of Major Commercial Aircraft. Source: Wikipedia, Unit Load Device, July 2008.
carriers. The market leader by far is Jettainer, established as a joint venture in 2003 by Denver, Coloradobased TrenStar, Inc. and Lufthansa Cargo. Today, the company operates the largest outsourced ULD fleet in the world at over 500 airports worldwide, with many of the world s largest airlines ‒ both passenger and cargo-only carriers ‒ drawing
their ULDs from its pool of devices. This outsourced ULD solution relieves carriers from the operational difficulty and financial burden of internal ULD management. Jettainer has announced that it is committed to deploying automatic identification technology in its system, believing that RFIDenabled processes look set to become a key differentiator that distinguishes our pool participants from their competitors.
Automatic identification could provide myriad benefits in this area, enhancing the business intelligence of air carriers and ULD management companies and enabling greater transparency that will provide better inter-operability with shippers and easier compliance with customs and inspection officials. RFID-based tracking of ULDs can also work to improve efficient loading and offloading of aircraft and enhance safety by ensuring proper weight distributions amongst the ULDs positioned on the plane.
A tarmac-full of possibilities In the end, whether through an inside solution or outsourced management, RFID-enabled tracking of these unsung workhorses of the global aviation system seems like one of the more natural fits for auto-ID technology. Managing such a complex and far-flung supply of containers that are vital to operational efficiency and effectiveness of air carrier operations is a mission-critical business task. And while there are sophisticated
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Global Identification - October 2008
Finally, greater real-time intelligence on ULDs could, in time, lead to a lessened need for the accepted business practice of having to tie-up precious working capital and limited ramp space in an overabundant supply of ULDs stationed throughout an air carrier s network. Thus, especially in an air industry that is being stressed by the global economic slowdown and rising jet fuel prices, RFID investments in this area will bring intelligence ‒ and ROI ‒ to the management of cans and pods.