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IATA e-freight

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

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IATA e-freight

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  1. IATA e-freight Generic Benefits Presentation April 2009 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  2. 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 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  3. 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 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  4. 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 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  5. Sweden Norway Denmark Canada UK Germany Netherlands Luxembourg South Korea France USA (JFK/ORD) Spain Hong Kong Dubai Singapore Mauritius Australia New Zealand 2008 - 18 locations and 25 airports live IATA e-freight Basics: When? Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  6. IATA e-freight Basics: When? Belgium Switzerland China Japan LIVE! Malaysia 2009 – 5 more locations go-live 14 new airports in current live countries Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  7. 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 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  8. 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 • Flight Manifest • Transfer Manifest • Export Cargo Declaration • Import Cargo Declaration • Master Air Waybill • House Waybill • House Manifest • Export Goods Declaration • Customs Release Export Consignees 2009: 16 Documents in scope2010: 20 documents in scope64% of the paper in volume Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  9. 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 • Flight Manifest • Transfer Manifest • Export Cargo Declaration • Import Cargo Declaration • Master Air Waybill • House Waybill • House Manifest • Export Goods Declaration • Customs Release Export Consignees Standards defined are multimodal and interoperable Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  10. IATA e-freight: Project Timeline Summary 2006 2007 2008 2009 2010 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 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 Initial scoping/ target definition/ planning Pilots: • Proved the concept • Defined initial Operating Procedures (eFOPs) and Standards • 6 locations go-live Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  11. 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 1.7 bn 1.7 bn 0.8 bn 1.7 bn Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  12. 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. Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  13. 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. Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  14. 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 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 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  15. 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 Dubai, with no paper, there’s 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. Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  16. 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% Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  17. 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 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  18. 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 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  19. 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 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  20. 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 IATAefreight@iata.org. Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

  21. Thank you! http://www.iata.org/stbsupportportal/efreight Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

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