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

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Presentation on theme: "1 Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009 IATA e-freight Generic Benefits Presentation April 2009."— Presentation transcript:

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

2 2 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

3 3 Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009 Export Customs Import Customs Origin Freight Forwarders Origin-Destination Carrier Destination Freight Forwarders Aimed at eliminating the need to transport all paper documents for air cargo shipments Shippers Consignees IATA e-freight Basics: What is it?

4 4 Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009 Export Customs Import Customs Origin Freight Forwarders Origin-Destination Carrier 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 Shippers Consignees IATA e-freight Basics: What is it?

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

6 6 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 Japan Belgium LIVE!

7 7 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 trade Top 5 domestic markets implemented accounting for more than 85% of domestic traffic

8 8 Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009 Shippers Export Customs Import Customs Origin Freight Forwarders Origin-Destination Carrier Consignees 1.Invoice 2.Packing List 3.Certificate of Origin 4.Letter of Instruction 5.Dangerous Goods Declaration 6.Master Air Waybill 7.House Waybill 8.House Manifest 9.Export Goods Declaration 10.Customs Release Export Destination Freight Forwarders 15.Import Goods Declaration 16.Customs Release Import IATA e-freight: Scope of Documents 2009: 16 Documents in scope 2010: 20 documents in scope 64% of the paper in volume 11.Flight Manifest 12.Transfer Manifest 13.Export Cargo Declaration 14.Import Cargo Declaration

9 9 Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009 Shippers Export Customs Import Customs Origin Freight Forwarders Origin-Destination Carrier Consignees 1.Invoice 2.Packing List 3.Certificate of Origin 4.Letter of Instruction 5.Dangerous Goods Declaration 6.Master Air Waybill 7.House Waybill 8.House Manifest 9.Export Goods Declaration 10.Customs Release Export Destination Freight Forwarders 15.Import Goods Declaration 16.Customs Release Import IATA e-freight: Scope of Documents Standards defined are multimodal and interoperable 11.Flight Manifest 12.Transfer Manifest 13.Export Cargo Declaration 14.Import Cargo Declaration

10 10 Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION 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

11 11 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 1.7 bn 0.8 bn

12 12 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.

13 13 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.

14 14 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

15 15 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 shippers 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 minutes from the usual process, which means that truck drivers can be engaged for shorter time periods. In Dubai, with no paper, theres no need to queue at customs counters. Fees can be paid through electronic debit, saving time.

16 16 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 the unreliability of the logistics chain IATA e-freight will reduce this by 22%

17 17 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

18 18 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

19 19 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

20 20 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 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

21 21 Simplifying the Business INTERNATIONAL AIR TRANSPORT ASSOCIATION Thank you!


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