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IATA%20e-freight

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Title: IATA%20e-freight


1
IATA e-freight
Simplifying the Business
2
IATA e-freight is a priority for the industry
  • IATAs 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
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
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 importersfor 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
The increasing pressure for e-freight
C2K
GHAs
6
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
So, are we entering a paperless era?
?
  • 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!

?
?
8
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
IATA e-freight business vision
2020
2010
Vision
2007
Scope / Objectives
  • 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

Scope / Objectives
  • 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)
  • All cargo (general special)
  • Air freight
  • Forwarder to consignee
  • Eliminating the need to produce and transport
    typical paper documents

Quality Management System
10
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 16 000
    stakeholders including
  • 270 carriers
  • 200 customs authorities
  •  Well over 15 000 freight forwarders
  • At least 20 industry bodies
  • Ground Handlers

11
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
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
  • 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
Process Data primary docs identified
Key
15
Process Data to-be data flows mapped
16
IATA e-freight identifying pilot countries
  • Smart pilots survey conducted Q4 2005
  • 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

17
IATA e-freight customs surveyed
  • 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
  • Chosen on the basis of-
  • WCO recommendations
  • Global cargo volume
  • Geographical split

18
IATA e-freight forwarders surveyed
  • Total number of Freight Forwarder locations (16
    countries) 96
  • Total number of Freight Forwarder companies 58
  • FFI members 8
  • Others forwarders 50

Involving the wider community of freight
forwarders will be key
19
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
Legal Assess Treaties May 06
Analyzing Horizontal and Vertical Surveys
Government and Customs Audit
Assess Impact of Treaties
Obtain Commitment Local Clusters
Obtain Commitment
From Early Adopter Airlines
  • 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.
  • Obtain MOUs from all other stakeholders involved
    in Local Clusters Airlines, Freight Forwarders,
    and Customs Authorities.
  • 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.
  • During Cargo Week, Obtain commitment from Cargo
    Committee Airlines.
  • Obtain commitment from other participating
    non-Cargo Committee Airlines (Air Canada,
    Iberia).

20
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
    authoritys 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 authoritys
    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 governments 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
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
    governments e-freight air cargo supply chain
    have ownership issues attached at the
    international, national, local, or private level

22
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
Treaties status of smart pilot governments
24
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
e-freight implementation capability roadmap
Shipper
Forwarder 1
Customs 1
Customs 2
Forwarder 2
Shipper
e
e
e
Customs 3
Forwarder 3
Customs 4
Shipper
Forwarder 4
Customs 5
Shipper
Forwarder 5
Customs 6
Shipper infrastructure in place
Forwarder 6
Carrier infrastructure in place
Customs SW roll-out
Forwarder infrastructure in place
26
IATA e-freight pilot clusters
CA
SE
GB
DE
NL
US
CN
HK
ES
JP
UAE
KR
MP4
MY
SG
MC99
MC99?
Both
CL
AU
ZA
Neither
27
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 OD 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
IATA e-freight business implementation plans
Handshakes Mar 06
Plan Feb 06
Agenda Feb 06
Organize Feb 06
Workshops May 06 gtgt
Develop Global Implementation Plan
Complete Global Agenda
Meet with StB Reps
Organize Local Workshops
Workshops
  • 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
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
    countrys 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
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
Technical Stream
Industry Audit Jul 05
Technical Solutions Nov 05
Supplier Coordination June 06
Delivery Jul 07
Current Technical capabilities
Technical direction
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 / MoUs
  • Develop
  • Test
  • Technical accreditation
  • Pilot Implementation

32
Technology options to support delivery
  • 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

33
Milestones
2005
2006
2007
Pilots
Scope
Process
Vision, Scope Objectives
Process alignment
Pilot preparation
Pilot Implementation
Business
Legal Country
Legal Framework Development
Carriage
Treaties / limitations
Government Customs
Cluster commitment
Legal solutions
Legal
Technical Solutions
Supplier Coordination
Industry Audit
Current Technical capabilities
Technical direction
Alignment
Implementation
Technical
34
Gathering Momentum
16 x Customs
World Customs Organization (WCO)
HongKong TradeVision
50 Freight Forwarders
Singapore TradeXchange
IATA e-freight
6 x Airlines
9 x Forwarders
14 x Airlines
E-customs
CEFACT UN e-docs
United Nations
ASW ASEAN
35
IATA e-freight How to stay connected!
http//www.iata.org/whatwedo/simplibiz1

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