Electronic Freight Management Initiative Overview

1. PROGRAM OVERVIEW Electronic Freight Management Initiative U.S. Department of Transportation & Industry Partners UN/CEFACT Symposium on Single Window Standards and Interoperability Geneva, Switzerland May 4, 2006 U.S. Department of Transportation & Industry Partners

2. Purpose of Presentation • Show support for Single Window Concept • Show support for International Transport Data Exchange Standards • Prepare to demonstrate both in a Proof of Concept deployment test called Electronic Freight Management (EFM)

3. Electronic Freight Management (EFM)How we got there… • Began with government and industry partnership: • Strong desire to leverage intelligent transport system technology • Improve capacity of the transportation network • Led to a desire for efficiency improvements in the movement of freight • throughout the supply chain (inherently industry) • throughout the transportation network (inherently government) • Led to interest in electronic data exchange “B to B” and “B to G” (data reusability or single window) • Like the Internet, freight has no political boundaries • Supply chains Involve many players throughout the world • Led to interest in an initial test • Needed willing partners • Needed data exchange standards • Need trade consultation in building the system

4. Benefits of EFM • Through use of Web Services in a Service Oriented Architecture: • Reduce paperwork • Improve cycle times • Reduce complexity to access pre-authorized information • Increase visibility into and across transactions – full cargo and asset visibility • Diminish dependencies on external entities for status notifications • Contributes to the objective of a “single window” portal

5. Single Window Connection • EFM ADHERES TO SINGLE WINDOW PRINCIPLES OF DATA STANDARDS, INTEROPERABILITY AND DATA SHARING • Reusability of data • Filings could be made to multiple agencies from single message: • Customs, Endangered Species, Health & Safety • Interoperability – Supply chain partners systems • Standard data – Core Component Library, TBG17 UNCEFACT • Export/Import -Trade use of same data (Importers, Exporters, Carriers) • Quota (Textile categories) and VISA • Advance filings (say, from manufacturer)

6. EFM Deployment Test:Apparel Shipped from China to US • Test Participants: • Two Chinese apparel manufacturers • Two freight forwarders • Air cargo terminal operator • Two charter air carriers • Buyer (Limited Brands, Inc.) • US 3PL • Import Broker

7. Boundaries of EFM Deployment Test Commercial transaction (Order) initiated Order delivered Raw material suppliers Manufacturer’s Factory Distribution Center Retailers Example is shown for Limited Brands’ test supply chain • “End-to-End” supply chain • Functions: • Procurement • Transportation • Distribution • Delivery

8. Manufacturer’s Factory Distribution Center Supply Chain Focus for Key Standards Development and Implementation Org’s. Customs IATA UN/CEFACT OASIS

9. Standards Strategy • Freight is global and requires global standards for information sharing • UN/CEFACT contributed: UNTDED, CCTS, CCL for international community • OASIS-UBL is using them • WCO is using them • Air Cargo Industry considering using them • EFM test will demonstrate them in a freight context • EFM test expects to use what’s available that has international consensus • OASIS-UBL version 2.0 • UN/CEFACT TBG17 Core Component Library • Any gaps that may exist • Build data items/messages for test and share with standards community for further action and possible adoption

10. UBL version 2.0 Public Review • EFM Team Conducted technical review of UBL • EFM Team Conducted business review of UBL, particularly with regards to the requirements of the EFM Demonstration Test • Posted comments on the public review website • Preliminary findings shared with UBL Transportation Subcommittee • Continue to participate on the UBL Transportation Subcommittee • Preparing for comment discussion in Brussels in May • Developing a transport status message to be added to version 2.0

11. Reference Identifier to Uniquely Identify Consignments Sample PO # Ship. # BOL # 1 HAWB # Split Shpt ID Consolidated Shpt ID MAWB # BOL # 2 Examples of Identifiers used in baseline business process Adopt WCO’s Unique Consignment Reference (UCR) UCR maintained throughout the end-to-end supply chain Manufacturer creates UCR Anticipated scenario in EFM Demonstration Test

12. We are structuring our UCR design around four areas to meet EFM requirements while ensuring consideration of the WCO recommendations Format Creation Management Registration • Considerations around the design of the UCR identifier • Consideration of existing standards and/or technical solutions • Ensure uniqueness principle is met in an efficient and effective manner • Considerations around how the UCR will be stored • Considerations around how the UCR will be associated with other references • Considerations around how splits and consolidations will be handled • Considerations around the who, where, when, what, and how of creating the UCR • Considerations around the registration procedures for becoming an issuing agency WCO UCR Recommendations

13. The “Freight Information Highway” (FIH) defines a freight transportation network using web services and a Service-Oriented Architecture framework. • Many partners’ legacy systems are built on a variety of platforms and operating systems such as ANSI EDI, EDIFACT, XML, FTP, etc. which do not allow for easy integration between partners. • Barriers to entry in today’s environment harm the ability of small/medium enterprises to compete in the sophisticated IT environments of their potential customers. • The FIH intends to create an information pipeline of data communication among supply chain partners to increase supply chain efficiency through improved data sharing.

14. In the Demonstration Test, Limited Brands and their supply chain partners will be interconnected in an FIH implementation.

15. Elements of the EFM Demonstration Test • Lead to these Demonstration Test components… • To create this expected value for stakeholders…. • These EFM elements…. • Reduce paperwork • Improve cycle time • Reduce complexity to access pre-authorized information • full cargo and asset visibility • Diminish dependencies on external entities for status notifications • Contributes to the objective of a “single window” portal • “Virtual” data record of the shipment, enabled by web services • Messaging schemas harmonized with emerging int’l standards • Definition and use of unique consignment references • Selected opportunities to help industry modify its business processes • Single window principles of data standards, interoperability, data sharing Technology Architecture Data Standards Identity Management Portions already successfully tested in two previous tests

16. EFM targets the time freight is at rest, awaiting information exchanges. Manufacturer’s Factory Distribution Center Time = 0  Mean duration of the Limited Brand’s test supply chain  160 hours 100 % Target Of Opportunity Shipment awaiting information exchanges to take place 80 % 60 % Percent of 160 Hour Duration Shipment awaiting physical state change, such as shipment consolidation 40 % 20 % Shipment is in movement 0 % Data are based on preliminary qualitative findings collected during baseline activities along the target supply chain.

17. Request of the Geneva CEFACT Audience • The Collaborative EFM test with industry and USDOT is in process • Freight data standards integration is part of that process • USDOT and its partners have been communicating with CEFACT, OASIS, IATA and WCO • CEFACT is harmonizing core components • OASIS-UBL has version 2.0 out for public review • Air Cargo industry has a Cargo 2000 and an eFreight initiative in process • WCO’s version 2.0 data model, and a UCR specification • Common interoperable eFreight standards have not yet emerged for deployment • We are looking to work with standards development and standards implementation organizations to help mature these standards • We would like to share our test design for standards with representatives of each of the 4 standards organizations. • We hope to have that opportunity here in Geneva this week.