IATA%20e-freight

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IATA e-freight
Simplifying the Business
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IATA e-freight is a priority for the industry

• IATAs Board of Governors have mandated a project
  designed to remove all the paper for all
  stakeholders from air cargo transportation by
  2010
• This project is now called IATA e-freight
• E-freight has a pilot programme to accommodate
  those parties that are able to free their supply
  chain processes from paper by 2007
• The project has the full support from the
  industry

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Air Cargo Industry Needs to change

• A good news story
• Until recently air cargo carriers outperformed
  passenger carriers
• but a traditionally complex business
• Average consignment E2E transport time stuck at
  6.5 days
• Average 38 paper docs accompany MAWB for each
  consignment
• 35 million AWBs
• . facing increasing challenges
• Fuel cost now accounts for 25 of airline costs
• Reducing volumes 13.4 in 2004 to 3.6 in first
  8 months of 2005

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Strong forces for e-freight

• Security
• Customs demanding advanced electronic manifest
  information
• Large penalties for non-compliance
• Need for globally coordinated drive for industry
  simplification
• Customers (world trade)
• Shippers, manufacturers and importersfor their
  own efficiency
• Efficiency
• Our industry is carrying paper-work costs it can
  no longer afford.
• Alignment and Mobilization
• Many are joining forces IATA, WCO, WTO, FFI,
  Cargo 2000, UN CEFACT, US agencies

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The increasing pressure for e-freight
C2K
GHAs
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IATA e-freight document issues

• Today there are several problems with the manual
  creation and handling of paper documents
• Missing / incomplete documentation
• Slows down the process
• Customs holds and snagging
• Security aspects from customs regarding time and
  quality
• Documents accompany the freight
• Handover points
• Duplication
• Manual

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So, are we entering a paperless era?
?

• Paperless?
• An air cargo industry which prints no paper
• Paper-Free?
• Air cargo industry processes which are not
  paper-dependent
• Paper-Work?
• Air cargo industry cost of processing paper,
  including data quality
• IATA e-freight
• Delivers a paper-free industry reducing
  paper-work!

?
?
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IATA e-freight in a nutshell

• What is it?
• A joint air cargo industry programme of carriers,
  forwarders and customs, led by IATA
• Aimed at eliminating need to produce and
  transport all paper documents for air cargo
  shipments
• What is it worth?
• 1.2b US air cargo supply chain cost saving,
  driven by 80 reduction in cost of paper-work
• When will full benefits be delivered?
• Dec 2010 onwards with early adoption Dec 2007
  onwards
• What is our approach?
• Business change supported by automation if
  necessary
• E-freight complimentary but aligned to Cargo 2000
• E-freight will enable enhanced supply chain
  integrity to customers

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IATA e-freight business vision
2020
2010
Vision
2007
Scope / Objectives

• Eliminate the need to produce and transport all
  paper documents within the full multi-modal
• Shipper to consignee supply chain (buyer to
  seller) for all cargo at a piece level
• e-billing
• e-booking

Scope / Objectives

• Early adopters (airlines forwarders) on
  specific trade flows (general)
• Air freight
• Global implementation enabling world trade air
  cargo volume to operate IATA e-freight (general
  special)

• All cargo (general special)
• Air freight
• Forwarder to consignee
• Eliminating the need to produce and transport
  typical paper documents

Quality Management System
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IATA e-freight engaging stakeholders

•  IATA has formed an Industry Action Group
  representing air cargo stakeholders made up of
  Airlines, the World Customs Organization and
  Freight Forward International
• The process is complex with more than 16 000
  stakeholders including
• 270 carriers
• 200 customs authorities
•  Well over 15 000 freight forwarders
• At least 20 industry bodies
• Ground Handlers

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IATA e-freight challenges

• Customs commitment to e-customs IATA e-freight
• Customs present both a challenge and opportunity
  as a force for change
• Industry engagement across the supply chain
• It is critical that all stakeholders in the air
  cargo industry are engaged

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IATA e-freight project structure

• The Project is divided into three Streams
• Business Stream
• Facilitates local implementation plans, process
  and messaging standards, IATA e-freight business
  requirements and other IATA e-freight business
  process related matters
• Legal Stream
• Facilitates the identification of legal,
  governmental, regulatory, and treaty issues and
  the generation of solutions for the same.
  Supports the IATA e-freight programme with legal
  analysis advice
• Technical Stream
• Facilitates technical direction, technical
  requirements, systems solutions and delivery, and
  other IATA e-freight systems related matters

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• Business Stream

ScopeJune 05
ProcessSep 05
PilotsApr 06
DeliveryJun 07
Vision, Scope Objectives
Process alignment
Preparation
Implementation

• Business workshops
• Document analysis
• Multi modal / end-to-end
• 2007 early adopters
• 2010 market penetration
• Beyond 2010 full multi-modal

• Customs (WCO)
• Industry (C2K)
• Standards (UN CEFACT)
• Policy

• Smart pilot selection
• Standard delivery plans
• Cargo Committee Commitment
• Airline fast track
• Country and cluster workshops

• Major trade lanes
• Cluster delivery

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Process Data primary docs identified
Key
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Process Data to-be data flows mapped
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IATA e-freight identifying pilot countries

• Smart pilots survey conducted Q4 2005
• Covered all airlines globally
• Targeted specific Customs authorities and freight
  forwarders
• Determined high level messaging capability and
  interest to participate in e-freight trials
• Pilots filtered on volume and messaging
  capability for customs, carrier, forwarder

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IATA e-freight customs surveyed

• Canada
• United States of America
• Chile
• Sweden
• United Kingdom
• Germany
• Netherlands
• Spain
• South Africa

• Dubai (UAE)
• China
• Hong Kong
• Singapore
• Malaysia
• Korea (south)
• Japan
• Australia

• Chosen on the basis of-
• WCO recommendations
• Global cargo volume
• Geographical split

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IATA e-freight forwarders surveyed

• Total number of Freight Forwarder locations (16
  countries) 96
• Total number of Freight Forwarder companies 58
• FFI members 8
• Others forwarders 50

Involving the wider community of freight
forwarders will be key
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IATA e-freight plan for pilot country selection
Systems/BusinessJan 06
Legal Government Audit Mar 06 May 06
Legal - MOUs Early Adopters Feb 06
Legal - MOUs Local ClustersMay 06
Legal Assess TreatiesMay 06
Analyzing Horizontal and Vertical Surveys
Government and Customs Audit
Assess Impact of Treaties
Obtain Commitment Local Clusters
Obtain Commitment
From Early Adopter Airlines

• Analyze airline response.
• Analyze Vertical response.
• Initial Selection Smart Pilot Countries.

• Conduct country governmental and customs audit.
• Refine selection of Pilot Countries based upon
  results.
• Assess need to add countries to and/or amend
  list of Pilot Countries.

• Obtain MOUs from all other stakeholders involved
  in Local Clusters Airlines, Freight Forwarders,
  and Customs Authorities.

• Government treaties audit.
• Use MP4/MC99 treaty matrix to assess status of
  treaty ratification and compatibility of Pilot
  Countries.
• Use results as filter for further screening of
  pilot countries to refine selection and create
  Local Clusters.

• During Cargo Week, Obtain commitment from Cargo
  Committee Airlines.
• Obtain commitment from other participating
  non-Cargo Committee Airlines (Air Canada,
  Iberia).

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Governmental, Customs, and Regulatory Issues

• Customs Authorities Must Adopt, Develop, and
  Implement a WCO Compliant Single Window Concept
• Determine whether each customs authority intends
  to develop and implement a single window concept
• Determine whether and extent to which the custom
  authoritys single window concept is compliant
  with the WCO Data Model
• Determine manner in which it differs from the WCO
  Data Model
• Determine manner in which the custom authoritys
  single window concept allows for the
  identification and recognition of Authorized
  Economic Operators
• Determine realistic timeline within which the
  customs authority will be able to implement the
  single window concept
• Determine the legislative and regulatory
  environment that must exist within the government
  in which the customs authority operates for the
  single window to implemented
• Determine whether the governments customs code
  or similar construct need to be expanded and/or
  amended
• Identify branches of government involved in these
  processes
• Identify what the processes entail and determine
  timelines within which the governmental and
  regulatory environment of the government will be
  ready for implementation of the single window

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Governmental, Customs, and Regulatory Issues

• Ownership of Customs Data - Responsibility for
  inaccurate and incomplete data
• Determine laws and regulations that exist within
  each government regarding liability for
  inaccurate and incomplete data
• Develop industry position (for airlines,
  forwarders, customs authorities) and push
  governments to adopt the same
• Authentication of Data and Electronic Signature
  Requirements
• Determine status of each government with respect
  to the regulations and requirements for
  authentication of data and electronic signatures
• Ownership of Documents
• Determine which, if any, documents within each
  governments e-freight air cargo supply chain
  have ownership issues attached at the
  international, national, local, or private level

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Treaties assessing the globe

• Warsaw Convention (for the Unification of Certain
  Rules for International Transportation by Air)
  and Warsaw as Amended by the Hague Protocol.
• Paper air waybill required for carrier to assert
  liability limits stated in Warsaw, Warsaw-Hague.
• Montreal Protocol No 4 (MP4) (Amends Warsaw
  Convention)
• Allows electronic air waybill. Carrier may
  assert liability limits stated in Warsaw-Hague.
• Montreal Convention 1999 (MC99) (for the
  Unification of Certain Rules for International
  Carriage by Air)
• Allows electronic air waybill. Carrier may
  assert liability limits stated in the Montreal
  Convention.
• New Treaty. Prevails over Warsaw and MP4.
• Government of Origin and Destination must be
  party to the same treaty (MP4 or MC99) for the
  treaty to apply

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Treaties status of smart pilot governments
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Pilot clusters selection criteria

• Matching treaties for MC99 MP4 countries
• Minimum 1 EU country in each cluster
• Easy to expand to other EU countries
• Easy to transfer to another EU country if one
  drops out
• Risk assessment of likely compliance
• Put countries more likely to drop out in separate
  clusters
• Trade volumes
• Ensure at least 1 large trader in each cluster
• IAG Champion in each cluster to drive
  implementation

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e-freight implementation capability roadmap
Shipper
Forwarder 1
Customs 1
Customs 2
Forwarder 2
Shipper
e
e
e
Customs 3
Forwarder 3
Customs 4
Shipper
Forwarder 4
Customs 5
Shipper
Forwarder 5
Customs 6
Shipper infrastructure in place
Forwarder 6
Carrier infrastructure in place
Customs SW roll-out
Forwarder infrastructure in place
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IATA e-freight pilot clusters
CA
SE
GB
DE
NL
US
CN
HK
ES
JP
UAE
KR
MP4
MY
SG
MC99
MC99?
Both
CL
AU
ZA
Neither
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Pilot clusters why 4- 5 countries per cluster?

• Simplifies pilot implementation
• If all 17 pilot countries set up e-freight pilots
  with each other, 136 pairs of OD pilot e-freight
  lanes would have to be set up
• Enables more penetration opportunity than simply
  grouping countries in pairs
• Protects against the risk of individual countries
  dropping out
• Remaining countries in the cluster will still
  have e-freight partners to work with

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IATA e-freight business implementation plans
HandshakesMar 06
PlanFeb 06
AgendaFeb 06
OrganizeFeb 06
WorkshopsMay 06 gtgt
Develop Global Implementation Plan
Complete Global Agenda
Meet with StB Reps
Organize Local Workshops
Workshops

• Develop global standard implementation plan
• Output
• Provide a standard implementation plan for
  country managers

• Clear idea of e-freight deliverables for 2006
• Output
• Standard Agenda do be distributed to StB Reps

• Develop strategy for organizing meetings, where,
  when and who
• Output
• Draft workshop plan per cluster

• Implementation Managers meeting
• Output
• Agree on plan, deliverables, targets, roles and
  responsibilities

• Initiate workshops
• Output
• Workshop deliverables

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IATA e-freight global implementation plan

• The IATA Business Process Stream will develop a
  global standard implementation plan which will
  be used as the basis for each individual pilot
  countrys implementation plan
• The global plan will be tailored to fit each
  local situation at country and cluster level
  by the local StB representative with support from
  the central e-freight team
• The overall management of each local plan will be
  coordinated by IATA Regional Programme Managers
  (RPMs), with support from the central IATA
  e-freight project team

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IATA e-freight local implementation plans

• The e-freight implementation plan for 2006
  includes three workshops per country
• For economic areas with several potential
  participating countries and a single Customs
  Code, country workshops will be combined to
  ensure a common approach. This applies to EU and
  ASEAN and will reduce the total workshop
  requirement
• Some of these workshops will be for clusters,
  enabling O D country pairs to prepare for
  implementation

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Technical Stream
IndustryAuditJul 05
Technical SolutionsNov 05
Supplier CoordinationJune 06
Delivery Jul 07
Current Technicalcapabilities
Technicaldirection
Alignment
Implementation

• Air freight industry
• Airlines
• Freight Forwarders
• Related industries
• Technical workshops
• CCS
• E-commerce

• RFI
• Supplier workshops
• Technical workshops
• WCO data model v2/3
• UN CEFACT
• C2K / WCO Process

• Detailed requirements
• E-freight timelines
• Preferred supplier(s)
• Contracts / MoUs

• Develop
• Test
• Technical accreditation
• Pilot Implementation

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Technology options to support delivery

• Fully commercial environment
• Three potential options in a fully commercial
  environment
• Those Who Can, Do
• Independent, industry neutral body
• Commercial Solutions
• Directions not exclusive
• Multiple providers
• Combinations inevitable in a commercial
  environment

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Milestones
2005
2006
2007
Pilots
Scope
Process
Vision, Scope Objectives
Process alignment
Pilot preparation
Pilot Implementation
Business
Legal Country
Legal FrameworkDevelopment
Carriage
Treaties /limitations
Government Customs
Cluster commitment
Legal solutions
Legal
Technical Solutions
Supplier Coordination
IndustryAudit
Current Technicalcapabilities
Technicaldirection
Alignment
Implementation
Technical
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Gathering Momentum
16 x Customs
World CustomsOrganization (WCO)
HongKong TradeVision
50 Freight Forwarders
Singapore TradeXchange
IATA e-freight
6 x Airlines
9 x Forwarders
14 x Airlines
E-customs
CEFACT UN e-docs
UnitedNations
ASW ASEAN
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