1 simplifying the business international air transport association 2009 iata e-freight generic...
TRANSCRIPT
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
IATA e-freight
Generic Benefits Presentation
April 2009
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 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
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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?
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
Export Customs
Import Customs
OriginFreight Forwarders
Origin-Destination Carrier
DestinationFreight 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
Shippers
Consignees
IATA e-freight Basics: What is it?
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
IATA e-freight Basics: When?
Malaysia
Switzerland China
2009 – 5 more locations go-live 14 new airports in current live countries
JapanBelgium
LIVE!
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
IATA e-freight Basics: When?
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
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
Shippers
Export Customs
Import Customs
OriginFreight Forwarders
Origin-Destination Carrier
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
DestinationFreight Forwarders
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
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
Shippers
Export Customs
Import Customs
OriginFreight Forwarders
Origin-Destination Carrier
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
DestinationFreight Forwarders
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
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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 ProcessingCosts
Improved Delivery Time
Reduced Inventory
Increased Market Share
1.7 bn
1.7 bn
1.7 bn
0.8 bn
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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.
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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.
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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$7 saving per consignment
IATA e-freight: Specific Benefits
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
Delivery Time Assuming 100% e-freight, the worldwide value of goods shipped is predicted to be US$
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
IATA e-freight: Specific Benefits
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.
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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
IATA e-freight: Specific Benefits
12% buffer stock
Goods Sold
25% of this is due to theunreliability of the logistics
chain
IATA e-freight will reduce this by 22%
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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
IATA e-freight: Specific Benefits
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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
IATA e-freight: Specific Benefits
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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: Specific Benefits
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
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].
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Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009
http://www.iata.org/stbsupportportal/efreight
Thank you!