Qantas Freight fumbles IT rollout, stranding cargo shipments

Businesses in Australia are increasingly agitated by the failure of Qantas Freight, the cargo arm of flag carrier Qantas Airways, to fix software problems associated with a new IT system after 10 days, resulting in shipment backlogs at terminals across the country.

Qantas Freight switched over to the online platform for booking, managing and tracking shipments, as well as making payments on Sept. 24, but the malfunction’s ripple effects have forced customers to wait days to retrieve shipments, according to company notices and updates from logistics groups. Freight forwarders, upset about the situation, plan to seek compensation for their troubles.

“It will take some time for remaining freight to be cleared,” the carrier said in a message on Tuesday, but could not yet give an estimate on when that might occur. 

Many forwarders remain in the dark about where their shipments are located and face significant increases in costs. 

“Importers that use express airfreight movements through the Qantas Freight terminals are in many cases failing to meet contractual requirements with retailers and other customers. Intermediary logistics services providers such as freight forwarders and transport operators are running high costs for futile bookings, excessive administration and having idle staff waiting to receive freight for deconsolidation,” said Paul Zalai, director of the Freight & Trade Alliance (FTA), in a news release on Thursday.

“While the full impact is to be assessed, preliminary feedback from members suggests the delays to date have cost industry hundreds of thousands of dollars — costs that are now cascading down the supply chain and fueling inflationary pressures across our economy. Our members are understandably totally frustrated, suggesting a need for appropriate compensation, with many calling for a class action,” he added.

Ongoing complaints include poor communication, delays tendering import loads, significant driver wait times, cargo that cannot be located even though customers have been notified a shipment is ready to pick up, delays with container deconsolidation and a lack of effort to extricate freight trapped the longest, the FTA and Australian Peak Shippers Association (APSA) said in an earlier message to members.

Freight forwarders say they are only able to retrieve a small amount of cargo arriving in shared containers.  

“Our recovery has been hampered by system integration challenges which required reverting several functions to manual processes” and caused delays at airports in Sydney, Melbourne and Brisbane, the Qantas Freight acknowledged last week in a message to stakeholders. It said shippers won’t be charged storage fees on international loads that can’t be processed through a warehouse.

Qantas Freight operates a dozen cargo jets, including three Airbus A321 converted freighters that fly for Australia Post, four older Boeing 737 converted freighters, and two medium widebodies (an A330-200 and one 767), in addition to managing freight carried on Qantas passenger aircraft. 

Qantas management said all the technology releases for the cloud-based system were tested and validated for months at all regional Australian cargo terminals and key overseas facilities. Initial steps taken to return to normal operations included stabilizing the system through additional software releases to improve connectivity, processing manifests releases manually, and prioritizing loads of critical time-sensitive and vulnerable shipments.

“It is unsatisfactory that the systems were introduced without workable contingencies or a roll back strategy in case of failure. Reverting to manual processes have proven to be hopelessly flawed with Qantas Freight staff struggling to cope with the receipt of large import volumes and delivery of cargo,” Zalai said.

The Sydney Morning Herald recounted on Thursday how perishable food and flower shipments have spoiled, fashion items have missed store deliveries and live animals have been unattended because of gridlock at Qantas’ cargo terminals.

The airline said the domestic backlog had been cleared but import handling continues to be hampered by inability to receive cargo release messages from Australian Customs and communication faults between X-ray scanners and the new system. The Melbourne cargo terminal is experiencing the worst backlog. Delays are also being experienced for shipments scheduled to move on partner airlines.

Qantas said it will contact customers within 24 hours to help determine the status of shipments and is rebooking any export reight with missed connections on new flights.

Additional stop-gap fixes taken by Qantas Freight include:

• Manual data entry of completed customs releases
• Use of runners to identify where freight is located 
• Prioritizing pharmaceuticals, temperature-controlled and perishable commodities and shipments from large-volume clients with the goal of freeing up space to help clear out stranded shipments.
• Increasing staff at the Sydney, Melbourne and Brisbane terminals to speed up cargo processing and operating extended hours.
• Using other security techniques to overcome issues with X-ray scanners.

Qantas declined an offer from the FTA/APSA to approach Australian competition authorities for an exemption so competing forwarders and airlines can collaborate on short-term solutions, as has been done to deal with challenges during the pandemic and natural disasters. The carrier said it is already working with larger customers on remedial actions. 

“We appreciate your patience and understanding over the past few days, and we sincerely apologize for the impact to your members and downstream customers,” Qantas told the FTA/APSA.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Twitter: @ericreports / LinkedIn: Eric Kulisch / ekulisch@freightwaves.com

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