StB

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IATA e-freight
Generic Benefits Presentation
April 2009
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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

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IATA e-freight Basics What is it?
Shippers
Origin-Destination Carrier
Origin Freight Forwarders
Export Customs
Import Customs
Destination Freight Forwarders

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

Consignees
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IATA e-freight Basics What is it?
Shippers
Origin-Destination Carrier
Origin Freight Forwarders
Export Customs
Import Customs
Destination Freight Forwarders

• 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

Consignees
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IATA e-freight Basics When?
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IATA e-freight Basics When?
Belgium
Switzerland
China
Japan
LIVE!
Malaysia
2009 5 more locations go-live 14 new airports
in current live countries
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IATA e-freight Basics When?
By end 2010 44 locations live accounting for
approx 80 of international trade Top 5 domestic
markets implemented accounting for more than 85
of domestic traffic
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IATA e-freight Scope of Documents
Shippers
Origin-Destination Carrier
Origin Freight Forwarders

• Import Goods Declaration
• Customs Release Import

Export Customs
Import Customs

• Invoice
• Packing List
• Certificate of Origin
• Letter of Instruction
• Dangerous Goods Declaration

Destination Freight Forwarders

• Master Air Waybill
• House Waybill
• House Manifest
• Export Goods Declaration
• Customs Release Export

• Flight Manifest
• Transfer Manifest
• Export Cargo Declaration
• Import Cargo Declaration

Consignees
2009 16 Documents in scope2010 20 documents in
scope64 of the paper in volume
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IATA e-freight Scope of Documents
Shippers
Origin-Destination Carrier
Origin Freight Forwarders

• Import Goods Declaration
• Customs Release Import

Export Customs
Import Customs

• Invoice
• Packing List
• Certificate of Origin
• Letter of Instruction
• Dangerous Goods Declaration

Destination Freight Forwarders

• Master Air Waybill
• House Waybill
• House Manifest
• Export Goods Declaration
• Customs Release Export

• Flight Manifest
• Transfer Manifest
• Export Cargo Declaration
• Import Cargo Declaration

Consignees
Standards defined are multimodal and
interoperable
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IATA e-freight Project Timeline Summary
2008
2009
2010
2006
2007

• 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

• 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

Initial scoping/ target definition/ planning

• Pilots
• Proved the concept
• Defined initial Operating Procedures (eFOPs) and
  Standards
• 6 locations go-live

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IATA e-freight The Business Case for e-freight

• Lower costs
• Up to US4.9 billion annual net benefits across
  the supply chain
• Total benefits US5.9 billion, less US1 billion
  in operational costs of messaging and scanning
  electronic documents
• Conservative estimate US3.1 billion in
  benefits, based on 80 e-freight capability and
  penetration across the industry

1.7 bn
1.7 bn
0.8 bn
1.7 bn
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IATA e-freight The Business Case for e-freight

• 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

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

• 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

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.
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IATA e-freight Specific Benefits

• 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
  US9 saving per consignment or US2-5 m per annum
• For a typical freight forwarder this can mean a
  saving of US14 per consignment
• For a shipper this can mean US7 saving per
  consignment

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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 shippers savings of US 870
  million per year

In Dubai, with no paper, theres no need to queue
at customs counters. Fees can be paid through
electronic debit, saving time.
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.
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IATA e-freight Specific Benefits

• 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

Goods Sold
12 buffer stock
25 of this is due to theunreliability of the
logisticschain
IATA e-freight will reduce this by 22
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IATA e-freight Specific Benefits

• 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

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IATA e-freight Specific Benefits

• 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

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IATA e-freight Specific Benefits

• 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

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IATA e-freight How to get involved

• Download the IATA e-freight handbook - available
  for free at http//www.iata.org/stbsupportportal/e
  freight/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 IATAefreight_at_iata.org.

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Thank you!
http//www.iata.org/stbsupportportal/efreight