1. Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 eCAG Conference Call July 21, 2011 Pre-reading documentation e-freight July 2011

2. 2 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Goal of conference call July 21st  Review current activities and results – 30 minutes  Get eCAG feedback on current activities (focused on 2011 target)  Get input from eCAG on project orientation moving forward (focus on 2012) – 60 minutes  Priorities for 2012  Governance moving forward  Any other topic (to be raised by eCAG members prior to the call)  This document is intended as pre-reading for the call. (Time will not permit to go through each slide in detail during the call, we will focus on eCAG members questions, comments and feedback instead)

3. Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 I. Current activities and results

4. 4 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Content  Volumes and penetration  Volume update  Task Force  Network expansion  Status of new locations readiness for e-freight - focus on China, Russia, India  Improving process in live locations  Other activities (Technology and Matchmaker)

5. 5 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Volumes and penetration - Growing but not to pace needed for 10% by year end

6. 6 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Some countries had fast growth in May LocationVolume increase (%) Australia21.7% Chinese Taipei32.1% France30.9% Germany13.5% Hong Kong39% Netherlands61.6% New Zealand67.2% Spain50.4%

7. 7 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Current penetration by airlines (May R41 report)

8. 8 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Top Forwarders by e-freight volume (May 2011)

9. 9 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Actions to increase penetration - 2011 eCAG recommendation (Istanbul March 2011) was to focus on a set of key locations and to ‘deep-dive’ in those locations Task Force activities are accordingly initiated or planned in Top prioritized airports

10. 10 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Prioritized airports (eCAG March 2011)  AMS  CDG  DXB  FRA  HKG  ICN  JFK  LHR  MAD  SIN Close to 75% of total e-freight trade lanes potential

11. 11 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Task Force – What does it do?  Heightened energy and resources in selected live locations to accelerate momentum and drive increased volumes of e-freight shipments  Two types of actions, according to the needs of the Location:  Bi-Lateral interaction with Stakeholders  Group Activity

12. 12 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Task Force deployment plan

13. 13 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Initial learnings from London Task Force  Not all airlines technically set up for e-freight  GHA-Airline interface in particular is an issue  Sales staff from airlines not always comfortable selling e-freight  Specific briefing of sales staff needed  Limited awareness of e-freight among forwarders (apart from those involved in the past)  Technical readiness of SME forwarders might be an issue  Survey will be sent to top 100 forwarders in London => CHANGE MANAGEMENT INITIATIVES ARE KEY IN THE SUCCES OF E-FREIGHT

14. 14 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Recommendations for eCAG members  Participate to Task Forces wherever possible  Good response so far  Implement more airports (focusing on the 10 airports as priority) – (see following slide for current number of airports where airlines had shipments in May)  Engage with your partners locally (handlers/forwarders)  Train/brief your own staff including sales force (if not done already)

15. 15 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 AF63 CI73 QF93 AC42 CV22 UA72 IB21 LX71 MP11 OZ11 LA10 Average8.63.5 Average w/o LH, EK 5.42.8 Most airlines still having e-freight shipments in limited number of airports (May 2011 data) AirlineTotal # airports with shipments # priority airports with shipments* LH4010 EK359 KE96 BA75 CX65 KL94 BR54 SQ103 AA43 *airports prioritized by eCAG in March/April

16. 16 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Update on network expansion – Russia, India, China  Russia  Government agency has been nominated to lead e-freight initiative  IATA will deliver 3 days of training/briefing in August  Lack of treaty (MC99/MP4)  No timeframe for go live but encouraged by level of engagement  India  Lack of goods declaration e-Customs  Not a governmental or customs priority at the moment  Will seek more engagement via all possible canals  China  Government agency has set up Task Force for e-Customs  Too early to judge deliverables  No progress expected during work of Task Force

17. 17 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Update on live locations issues  US:  Freeze of expansion until review is completed by CBP (triggered by Contraband team – CET)  Hoping for completion within weeks  IATA to recirculate list of allowed participants (participants before freeze) per location  Dubai  Pilot initiated by authorities to accept electronic supporting documents (if submitted as such originally)  Looking for participation from some airlines and forwarders  Egypt  Currently engaging to clarify requirements from Egyptian customs regarding messages and data

18. 18 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Technology and Matchmaker  Technology  Developing technology matrix to assess 3 rd party technology solutions for e-freight  Initial review with Vendor Action Group completed  Matchmaker  First version of the Matchmaker tool expected to be delivered by mid- August  Will allow better access to information on who is doing e-freight where, and will allow forwarders and airlines to manage their own data

19. 19 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Feedback from eCAG  Does eCAG support current activities?  Can we have your participation in as many task forces as possible?  Any other suggestion for accelerating e-freight adoption in 2011?

20. Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 II. e-freight 2012 and beyond

21. 21 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Content  Proposed project priorities for 2012 for the key areas:  e-Customs/ e-Government  FF-Airline-GHA interface  Shipper-Forwarder and Forwarder-Forwarder interface  Other  Update on possible governance changes

22. 22 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Successful implementation of e-freight requires three components: 1)e-Customs (and generally e-Government) procedures, and regulations, at export, import and transit locations that are conducive to e-freight 2)FF-Airline-GHA interfaces at origin, destination, and transit points that are conducive to e-freight 3) Shipper to Forwarder, and Forwarder to Forwarder interfaces that are conducive to e-freight (e-Pouch/e-Doc) (NOTE: these three components are further described in the appendix of this document)

23. 23 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Main challenges observed (1/2) e-freight ComponentKey challenges I. e-Customs (and e-Government)1. Required treaties not in place in all countries (MC99/MP4) 2. e-Customs procedures not in place in all countries 3. Where e-Customs exist, they are not always aligned with desired international standards (WCO) 4.Even where e-Customs exists, there are still, in some locations, requirements for accompanying documents in original paper form from Customs or other administrative bodies II. FF-Airline-GHA interface1.No or limited industry connectivity in some locations (absence of CCS) 2.No or insufficient EDI capability by individual airlines, forwarders or handlers (includes using old versions of the Cargo-IMP messages that are not sufficient for current e-freight needs) 3.Data flows between forwarder, airline and GHAs inconsistent with e-freight (and e-AWB). Airline-GHA data flow in particular. 4.Insufficient data quality (as shown by MIP) 5.Lack of a clear process for freight acceptance at origin when paper MAWB, HAWB and House manifests are not present (in some locations)

24. 24 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Main challenges observed (2/2) e-freight ComponentKey challenges III. Shipper to forwarder and forwarder to forwarder interface (e-Commercial Docs, e-Pouch) 1.Not all forwarders able to receive electronic docs from shippers or send electronic docs to destination (whether EDI or scanned) 2.e-freight perceived as creating more work than it delivers benefits (additional scanning of docs) 3.Few network forwarders have internal business processes that support e- freight (ie e-Doc Management Platforms coupled with high speed scanning, internal e-HAWB procedures, EDI interfaces with customers for commercial docs, etc.) 4.For SMEs, e-Pouch solutions are now on the market but are not known to many forwarders, and it is unclear if they meet the needs and are cost- competitive 5.Customs (or other governmental institutions), as well as consignees, may still require original paper docs at destination, even in e-freight locations 6.Customs may require access to e-Pouch to access e-Docs, which may or may not be possible with current e-Doc platforms (and may not be accepted by forwarders)

25. 25 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Additional issues observed Other areasKey challenges Awareness and understanding1.e-freight is not understood and its benefits not clear (in particular to forwarders) 2.It is still often perceived as an IATA initiative for airlines rather than an industry initiative for the whole industry

26. 26 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Priorities 2012  The priorities for 2012 should address the key issues observed  This document proposes a first set of proposed priorities for discussion at July 21 st call  These will then be further refined and proposed to the eCAG fir final decision at the at the September 6-7, 2011 meeting

27. 27 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Proposed priority for 2012: I. e-Customs/ e-Government  Expansion of e-freight network in new locations and airports: 1.Continue to lobby for treaty adoption (MC99/MP4) where not in force 2.Continue to lobby for e-Customs procedures aligned with WCO where not present 3.Continue to lobby for acceptance of electronic accompanying documents by Customs and other governmental institutions => Particular focus for the above actions on priority countries where e-freight is not yet live (or partially live): BRIC countries (Brazil, China, India, Russia) + US  Improvement of e-freight process in existing live countries: 1.Continue to identify, monitor and draw action plans to fix issues identified in live e-freight countries (DXB, Egypt, others)

28. 28 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Proposed priority for 2012: II. FF-Airline-GHA interface (1/2)  New focus: drive improvements in Forwarder-Airline-GHA connectivity, with particular focus on the Airline-GHA component – 2 proposals (non mutually exclusive) Proposal 1:  Measure Airline-GHA e-freight capability at airport level  This is defined as capability of an airline to do e-freight in a given airport, including having proper connectivity with the local GHA used  Initial baseline would be measured via survey in 2010 and then tracked on on- going basis via Matchmaker tool in 2012  A target for increasing overall capability could be set for 2012  This target would be based on individual commitments by airlines

29. 29 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Proposed priority for 2012: II. FF-Airline-GHA interface (2/2) Proposal 2:  Enhance MIP to better track airline-GHA and airline-Forwarder connectivity  Currently, it is not possible to identify if messages reported in MIP originate with forwarders or handlers  This limits to ability to use MIP as an indicator of penetration and quality for the forwarder-airline-GHA interface data flow Note: These activities would come in addition to the drive for e-AWB penetration which will continue towards the 100% target by end 2014

30. 30 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Proposed priority for 2012: III. e-Commercial docs/e-Pouch  Assess existing market solutions from vendors to help SMEs adopt e- freight (via survey of vendors)  Investigate giving local customs authority access to commercial docs via e-Pouch solutions to solve the issue of ‘print-on-demand’

31. 31 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 IV. Other priorities 2012 Other areasPotential priorities Special documents – e- Security Declaration and e- SDDG 1.Complete proofs of concepts for both (if not in 2011) 2.Assess adoption/acceptance of these electronic document standards by regulators in a set of countries Awareness and communication 1.Continue to develop the matchmaker tool to improve communication of who is live where and with what capabilities (first delivery expected early August 2011) 2.Use experience of Task Forces to develop benefits statements for all key stakeholders (in particular forwarders)

32. 32 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 eCAG feedback  Feedback will be requested from eCAG members on these proposed priorities during the July 21 st call

33. Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Governance update

34. 34 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Role of GACAG  GACAG includes FIATA, TIACA, IATA and GSF (+ associates WCO where relevant)  It is a vehicle by which these associations can align and agree to drive joint priorities and positions for better results  e-freight is one of the priorities agreed to by GACAG so far  A GACAG e-Commerce Task Force has been created (but has not met yet) to specifically focus on e-Commerce industry issues, including e-freight  William Gottlieb (FIATA) will be Chair of that GACAG TF from IATA and Guillaume Drucy IATA representative in the e-Commerce Task Force

35. 35 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Role of eCAG  Until the GACAG e-Commerce TF members have had a chance to meet, the eCAG shall continue to be the project stakeholder guidance group  When it meets, it is expected that the Task Force will ask the eCAG to continue to serve as the project’s stakeholder steering group, but may have suggestions on how to develop and possibly evolve the group  An important change is that while previously the eCAG guidance provided input primarily to IATA and IATA Cargo Committee, now this guidance shall be provided to and used by the GACAG as a whole  GACAG partners may also have views that would influence the proposed priorities for 2012, and this would be discussed with eCAG members  IATA will update eCAG of evolution in this regard

36. 36 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 eCAG feedback  Any comment or feedback regarding the governance, role of GACAG or of eCAG?

37. Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Appendix

38. 38 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 e-Customs (and e-Government) Shipper Export Customs Import Customs Origin FwR CarrierConsignee Dest. FwR GHA I. e-Customs -Ability to make customs declarations electronically (export and import) - No requirement to show original paper documents for invoice and packing lists during or after transportation (post flight audits) - Instead, electronic docs (invoice/packing list) should be accepted in electronic original format or as scanned (PDF) docs

39. 39 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 Shipper Origin FwR CarrierConsignee Dest. FwR GHA II. FF-Airline-GHA interface - Ability to communicate FWB and FHL information between FF-Airline-GHA - e-AWB capability (mandatory for e-freight as of end 2012) - Procedures defined between FF-Airline-GHA to accept freight at acceptance counter (origin) and for freight delivery (destination) without original paper docs (may require use of a shippers delivery note or warehouse receipt as interim step) - Electronic flight manifest (handler to airline) e-Communication between forwarders, airlines and handlers (note: arrows above represent the typical flow of goods, not of data)

40. 40 Simplifying the Business  INTERNATIONAL AIR TRANSPORT ASSOCIATION 2008 III. Shipper to forwarder and forwarder to forwarder interfaces (‘e-Commercial docs’ or ‘e-Pouch’) - Ability of origin forwarder to communicate key documents to destination forwarder, broker and optionally shipper electronically (house air waybill, invoice, packing list) - No commercial documents handed over to, and transported by airlines (house, invoice, packing list) - Customs access to docs via the forwarder if need be (VIA REPOSITORY) - e-Communication between origin shipper and forwarder (currently optional) Shipper Origin FwR CarrierConsignee Dest. FwR GHA e-Communication between forwarders, shippers and consignees