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1 IATA e-freight Simplifying the Business. Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005 2 IATA e-freight: is a priority for.

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Presentation on theme: "1 IATA e-freight Simplifying the Business. Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005 2 IATA e-freight: is a priority for."— Presentation transcript:

1 1 IATA e-freight Simplifying the Business

2 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION IATA e-freight: is a priority for the industry  IATA’s 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:

3 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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

4 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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 importers—for 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

5 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION C2K GHA’s The increasing pressure for e-freight

6 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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

7 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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! So, are we entering a paperless era?   

8 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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

9 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION  All cargo (general & special)  Air freight  Forwarder to consignee  Eliminating the need to produce and transport typical paper documents  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)  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 Quality Management System Scope / Objectives Vision IATA e-freight: business vision

10 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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 stakeholders including:  270 carriers  200 customs authorities  Well over freight forwarders  At least 20 industry bodies  Ground Handlers

11 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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

12 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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

13 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION Business Stream Scope June 05 Process Sep 05 Pilots Apr 06 Delivery Jun 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

14 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION Process & Data : primary docs identified Key

15 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION Process & Data: “to-be” data flows mapped

16 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION  Smart pilots survey conducted Q  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 IATA e-freight: identifying pilot countries

17 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION  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 IATA e-freight: customs surveyed Chosen on the basis of:- WCO recommendations Global cargo volume Geographical split

18 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION  Total number of Freight Forwarder locations (16 countries):96  Total number of Freight Forwarder companies:58  FFI members8  Others forwarders50 IATA e-freight: forwarders surveyed Involving the wider community of freight forwarders will be key

19 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION IATA e-freight: plan for pilot country selection Systems/ Business Jan 06 Legal – Government Audit Mar 06 – May 06 Legal - MOUs Early Adopters Feb 06 Legal - MOUs Local Clusters May 06 Analyzing Horizontal and Vertical Surveys Government and Customs Audit Assess Impact of Treaties  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.  During Cargo Week, Obtain commitment from Cargo Committee Airlines.  Obtain commitment from other participating non- Cargo Committee Airlines (Air Canada, Iberia).  Obtain MOUs from all other stakeholders involved in Local Clusters: Airlines, Freight Forwarders, and Customs Authorities. Obtain Commitment Local Clusters Legal – Assess Treaties May 06  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. Obtain Commitment From Early Adopter Airlines

20 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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 authority’s 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 authority’s 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 government’s 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

21 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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 government’s e-freight air cargo supply chain have ownership issues attached at the international, national, local, or private level

22 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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

23 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION Treaties: status of “smart pilot” governments

24 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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

25 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION e-freight implementation: capability roadmap Shipper Forwarder 1 Forwarder 3 Forwarder 5 Custo ms 1 Custo ms 3 Custo ms 2 Custo ms 4 Forwarder 2 Forwarder 4 Forwarder 6 Custo ms 5 Custo ms 6 e e Forwarder infrastructure in place Carrier infrastructure in place Customs SW roll-out e Shipper infrastructure in place

26 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION CA US CL GB SE DE ES NL ZA UAE KR SG JP MY AU CN IATA e-freight: pilot clusters HK MP4 Both MC99 Neither MC99?

27 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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 O&D 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

28 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION Develop Global Implementation Plan Complete Global Agenda Meet with StB Reps Organize Local Workshops Plan Feb 06 Agenda Feb 06 Organize Feb 06 Workshops May 06 >> Handshakes Mar 06 IATA e-freight: business implementation plans  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

29 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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 country’s 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

30 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 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

31 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION Technical Stream Current Technical capabilities Technical direction Industry Audit Jul 05 Technical Solutions Nov 05 Supplier Coordination June 06 Delivery Jul 07 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 / MoU’s  Develop  Test  Technical accreditation  Pilot Implementation

32 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION  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 Technology: options to support delivery

33 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION Milestones Legal Country Legal Framework Development Current Technical capabilities Technical direction Industry Audit Technical Solutions Alignment Implementation Supplier Coordination Technical Treaties / limitations Government & Customs Carriage Cluster commitment Legal solutions Legal Vision, Scope & Objectives Process alignment Pilot preparation Pilot Implementation ScopeProcess Pilots Business

34 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION Gathering Momentum CEFACT UN e-docs United Nations 50+ Freight Forwarders IATA e-freight 16 x Customs 9 x Forwarders 6 x Airlines World Customs Organization (WCO) 14 x Airlines C2K E-customs ASW ASEAN Singapore TradeXchange HongKong TradeVision

35 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION IATA e-freight: How to stay connected! Click on the StB Support Portal button Updates FAQs Materials Log request for follow up StB eNewsletter


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