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Mail is an interesting shipment for airlines. It’s a hefty responsibility, yet it is not air cargo in the conventional sense; the preparation is not carried out by forwarders, but by a small, select customer base – the world’s post offices. And they are facing mounting challenges.

Consumer expectations have risen – in part due to the e-commerce experience, which offers visibility all the way between the shipper and the end consumer. The volume of letters is falling as the growth in packages continues, and post offices need to respond to the tougher advance shipment information and requirement for tariff payments for these packages, especially as carriers are increasingly being made responsible for these as the physical importer.

How Cathay Mail could help

On its launch, Cathay Mail, Cathay Cargo’s “mail as cargo” solution, made big inroads into improving shipment visibility.

On its launch, Cathay Mail is Cathay Cargo’s “mail as cargo” solution made big inroads into improving shipment-level visibility, something that post offices had been asking of their airline partners. The solution integrated mail-handling data Cathay Cargo’s system using the PAWB – the postal air waybill. This electronic data interchange (EDI) technology digitalised processes to give both origin and destination post offices more visibility of shipments down to mail bag (“receptacle”) level, allowing them in turn to offer package-level track-and-trace visibility for the packages in those receptacles.

“The interface between systems gave more visibility and more control over performance, which were key post office requirements,” says Pascal Lai, Cargo Customer Solutions Manager.

Now, the aim is to make Cathay Mail the foundation of further innovation to improve the service for post offices – and in turn, their customers.

Harnessing Cathay Mail data and AI

The data that Cathay Mail has collected since its relaunch is enabling Lai and his team to identify areas for improvement. “One of the things we’re looking at is how we can get better at forecasting how much mail to expect on each flight, so that we can more accurately allocate allotments,” he says.

While allotments for mail are relatively small, they are last -minute and they compete with traditional cargo for space. If there is too much mail and some doesn’t fly, post offices’ delivery schedule will be affected.

The data from Cathay Mail is already useful in assessing historic demand and predicting future needs. But long-term, the plan is to use AI to make better-informed allocation decisions. “If AI can help us to navigate the daily fluctuations in space allocation then we can better fulfil post office timing requirements,” says Lai.

Navigating new regulations

In recent years, there have been a slew of new regulatory requirements for mail, such as tariffs and PLACI (pre-loading advance cargo information). A growing number of Customs authorities worldwide, including the US, require that airline carriers submit details of a package’s contents and value – information that post offices have, but carriers do not.

“This is because of data privacy, as well as the barrier of two different systems,” says Lai. There are also liability concerns over data accuracy because of the lack of visibility of what is in the mail bags, but as a US Customs and Border Protection requirement “we need to have it,” he adds.

Lai and his team have been working closely with the Kahala Posts Group (KPG), an international alliance of post offices, the Universal Postal Union, the International Post Corporation (IPC) and IATA among others on a remit is to improve the performance of package services.

Cathay Cargo is part of the key industry meeting that make standards and sets the future direction, and is also an IATA Airmail Board member, participating in the UPU-IATA Contact Committee. It also participates in IPC Engage and taskforce group meetings to help drive performance and develop technical solutions for mail handling.

There is still work to be done on a global solution, but Cathay Cargo has made steps in the right direction by creating a bespoke solution with China Post that means the post office can share necessary customs data via a qualified party, which has enabled China Post to restart deliveries to the US.

“Amid a complex and ever-changing international environment, Cathay Cargo worked closely with us to advance various collaborative initiatives – and is achieving fruitful results,” says Christine Yang, at the International Business Department at China Post Group. “Notably, in the KPG cooperation project, our teams worked in close coordination, and significantly improved the time in transit performance for China Post’s shipments to Canada and Australia.”

Visions for the future

While Cathay Mail has helped to bridge the gap between one post office and air cargo carrier, there is still a wider need for a single, uniform process when it comes to shipping air mail. “The challenge now is to standardise systems and message exchanges across the industry, which is our long-term goal,” says Lai.

Cathay Mail could provide a template. As Yang says: “We look forward to maintaining our close partnership and building on the existing strong foundation. We aim to further deepen cooperation, expand collaborative areas, jointly address industry challenges and create new milestones together.”