iata e-freight

1 Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

IATA e-freight

Generic Benefits Presentation

April 2009


IATA e-freight: Introduction

The air freight supply chain faces increasing challenges:

Customers want, faster speed, lower costs and more reliability

Regulators want more security and demand more information

Slowing economic growth means less revenue

One way to meet these challenges is to migrate from a paper based process to a data driven process for transportation of goods

IATA e-freight is taking the paper out of air cargo and replacing it with electronic messages


Export Customs

Import Customs

OriginFreight Forwarders

Origin-Destination Carrier

DestinationFreight Forwarders

Aimed at eliminating the need to transport all paper documents for air cargo shipments

Shippers

Consignees

IATA e-freight Basics: What is it?


Export Customs

Import Customs




A project built by the supply chain, for the supply chain: a joint air cargo industry programme of shippers, forwarders, ground handlers, carriers, customs brokers and customs, facilitated by IATA

Shippers, freight forwarders involved in project advisory groups and local working groups to define e-freight operational procedures

Shippers

Consignees

IATA e-freight Basics: What is it?


IATA e-freight Basics: When?

UK

SingaporeHong Kong

NetherlandsCanada

Sweden

South Korea

2008 - 18 locations and 25 airports live

Germany

Australia

USA (JFK/ORD)

New Zealand

Mauritius

Dubai

Denmark

Spain

Norway

LuxembourgFrance



Malaysia

Switzerland China

2009 – 5 more locations go-live 14 new airports in current live countries

JapanBelgium

LIVE!



By end 2010: 44 locations live accounting for approx 80% of

international tradeTop 5 domestic markets implemented accounting

for more than 85% of domestic traffic


Shippers

Export Customs

Import Customs



Consignees

1.Invoice2.Packing List3.Certificate of Origin4.Letter of Instruction5.Dangerous Goods Declaration

6. Master Air Waybill7. House Waybill8. House Manifest9. Export Goods Declaration10. Customs Release Export


15. Import Goods Declaration16. Customs Release Import

IATA e-freight: Scope of Documents

2009: 16 Documents in scope2009: 16 Documents in scope2010: 20 documents in scope2010: 20 documents in scope64% of the paper in volume64% of the paper in volume

11. Flight Manifest12. Transfer Manifest13. Export Cargo Declaration14. Import Cargo Declaration


Shippers

Export Customs

Import Customs



Consignees

1.Invoice2.Packing List3.Certificate of Origin4.Letter of Instruction5.Dangerous Goods Declaration

6. Master Air Waybill7. House Waybill8. House Manifest9. Export Goods Declaration10. Customs Release Export


15. Import Goods Declaration16. Customs Release Import

IATA e-freight: Scope of Documents

Standards defined Standards defined are multimodal and are multimodal and interoperableinteroperable

11. Flight Manifest12. Transfer Manifest13. Export Cargo Declaration14. Import Cargo Declaration


2008 2009 2010 2006

Initial scoping/

target definition/planning

2007

Pilots:Proved the

concept Defined initial

Operating Procedures

(eFOPs) and Standards

6 locations go-live

Expand with new locations:

Involve additional stakeholders (shippers) Triple the number of

locations to 18 Expand on initial Operating

Procedures and on Standards to 13

Publish the IATA e-freight Handbook

IATA e-freight: Project Timeline Summary

Global Implementation 2009: 5 more countries, 14 more airports - half of

which will be in the USA, 3 more standards

2010: 4 more standards, e-freight capability in

locations that account for approx 80% of international

airfreight


IATA e-freight: The Business Case for e-freight Lower costs

Up to US$4.9 billion annual net benefits across the supply chain

Total benefits US$5.9 billion, less US$1 billion in operational costs of messaging and scanning electronic documents

Conservative estimate: US$3.1 billion in benefits, based on 80% e-freight capability and penetration across the industry

Document ProcessingCostsImproved Delivery Time

Reduced Inventory

Increased Market Share

1.7 bn

1.7 bn

1.7 bn

0.8 bn


Better service Faster supply chain transit times

The ability to send shipment documentation before the cargo itself can reduce the end-to-end cycle time by an average of 24 hours

Greater accuracy Electronic documents auto population – allowing one time electronic data

entry at point of origin - reduces delays to shipments due to inaccurate or inconsistent data entry

Electronic documents also are less likely to be misplaced, so shipments will not be delayed because of missing documentation

IATA e-freight: The Business Case for e-freight

In South Korea, freight forwarders can now transport freight to the airlines as soon as the FWB is created. Printing and manual pouching of the documents can be done after the freight departs, saving time and money.


Better service Better tracking

Data entered electronically gives organisations the opportunity to track shipments en route – allowing for real-time status updates

Better for the environment IATA e-freight will eliminate more than 7,800 tonnes of paper documents,

the equivalent of 80 Boeing 747 freighters

IATA e-freight: The Business Case for e-freight

In various locations, airlines now have improved electronic arrival alert mechanisms. That means that freight forwarders no longer have to go to the airline or GHA arrival counter to be notified of freight receipt.


Document Processing Costs 20 documents will be replaced with electronic messages by

removing 64% of the paper volume A reduction in the cost of document processing across the

supply chain from USD 40 per house shipment to USD 25 per shipment

This equates to cost saving US$ 1.73 billion across the supply chain, i.e., shipper, forwarder and airline

For a typical self handled airline this can mean US$9 saving per consignment or US$2-5 m per annum

For a typical freight forwarder this can mean a saving of US$14 per consignment

For a shipper this can mean US$7 saving per consignment

IATA e-freight: Specific Benefits


Delivery Time Assuming 100% e-freight, the worldwide value of goods shipped is predicted to be US$

6,377 billion IATA e-freight will allow the reduction of an average of 24 hours in transit time This translates into the release of US$ 17 billion of capital - the value of goods shipped

in a day Assuming a 5% return on investment, this translates into shipper’s savings of US$ 870

million per year


In Amsterdam, freight forwarders are now able to bring freight directly to the delivery dock instead of via the document centre. This saves 30-60 minutes from the usual process, which means that truck drivers can be engaged for shorter time periods.

In Dubai, with no paper, there’s no need to queue at customs counters. Fees can be paid through electronic debit, saving time.


Inventory Savings: The value of the inventory kept

as "buffer stock" is 12% of the value of goods sold

Of this "buffer stock", 25% is held because of the unreliability of the logistics chain

The assumption is that, improvements in reliability due to the adoption of e-freight will reduce the overall "buffer stock" that is required to be kept by 22%

The benefit to shippers will be US$ 1.74 billion per annum


12% buffer stock

Goods Sold

25% of this is due to theunreliability of the logistics

chain

IATA e-freight will reduce this by 22%


Reduced Customs Penalties Electronic one time date entry is more accurate as less prone to

errors As customs penalties are often due to improper data entry,

assumption is IATA e-freight will reduce customs penalties by 25%

Benefit to the industry is US$ 200 million per annum



Increased Market Share: IATA e-freight implementation will make the industry more

competitive through improved speed and reliability Resulting in a conservative 1% market share increase over other

modes of transportation Benefit to the industry is US$ 1.78 billion per annum



Regulatory compliance and increased security: IATA e-freight meets international and local regulations relating to

the provision of electronic documents and data required by customs, civil aviation and other regulatory authorities

Electronic documents restrict availability of data to parties who require them for the completion of the transportation



IATA e-freight: How to get involved Download the IATA e-freight handbook - available for

free at http://www.iata.org/stbsupportportal/efreight/materials/ Comprehensive guide to e-freight implementation Also on the web is all the latest project information, including

country status and lists of companies participating Contact your supply chain partners already involved and

start planning your implementation on live trade lanes To find who is currently involved, visit the IATA e-freight

homepage To find out more or provide feedback, contact IATA at

[email protected].

http://www.iata.org/stbsupportportal/efreight/materials/







mailto:[email protected]





http://www.iata.org/stbsupportportal/efreight

Thank you!