1. EARLY ADOPTION OF IATA E-FREIGHT
The 3rd Annual Middle East Aviation IT Forum 2005
Niranjan Navaratnarajah
Manager Cargo Systems & Revenue Planning
Emirates Airline
22nd November 2005

2. TODAYS REALITY….
Average of 38 documents per shipment at a cost of US$30
Early adopter implementation (end 2007) will generate savings of US$800 million per year.
Industry savings will be US$1.2 billion per year when fully implemented (2010).
Paper used in processing shipments every year could fill 39 B or 81 A-300F4-600R freighters.
20 years ago it took 6.5 days on average to send a shipment internationally, today it still takes
6.0 days - 1 day to fly, 5 days to wait for the paper.

3. INDUSTRY ACTION GROUP
IATA has formed a preliminary Industry Action Group representing air cargo stakeholders made up of British Airways, Cargolux, Emirates, Fedex, Lufthansa Cargo, Singapore Airlines, World Customs Organisation and Freight Forward International.

4. GATHERING MOMENTUM

5. HOW WILL E-FREIGHT HELP YOUR BUSINESS?
Reduce costs by eliminating duplication.
Speed up processing.
Improving overall data quality.
Expedite security and customs compliance.
As customs are increasingly demanding electronic information in advance will also help avoid fines and other costs associated with non-compliance.
Better transparency and reduced shipping times for your clients.

6. BENEFITS Expedited movement of goods, improved quality of service.
Shipper:
Expedited movement of goods, improved quality of service.
Forwarder:
Process efficiency, reduced cost of compliance.
Airline:
Process efficiency, cost reduction, improved competitiveness of air freight.
Customs:
Faster, more accurate information for security screening & clearance.
Consignee:
Reduced transit times.

7. TARGET
Eliminate the need to produce and transport paper documents for air cargo shipments by moving to an industry-wide, simpler, electronic, paper-free environment.
Early adopter implementation by end 2007, full industry implementation by end 2010

8. ACTION PLAN
Develop governance to effectively represent early adopter forwarders, carriers, shippers, customs and also ensure effective engagement with key industry bodies.
Harmonise current industry data and communication standards.
Define user requirements and system functionality to support a potential technical solution RFP process.
Identify roadblocks to the elimination of paper, and develop a plan to remove them.
Develop a legal framework to operate a paper free end-to-end process.

9. ACHIEVEMENTS IN FIRST 6 MONTHS
Roadblocks identified
Process & Standards, Stakeholder Mgt, Legal & Regulatory, Technology.
Business Process and Data Standards set
Detailed “As-Is” and “To-Be” business processes and documents mapped out.
Engagement and alignment underway
Inc: Industry Action Group, FFI, FIATA, WCO, Cargo 2000, Cargo Committee, UN, EU.
Legal and Regulatory challenges mapped out
Scale of challenge understood to achieve MC99 and MP4 treaty ratification.
Technology options under evaluation
Technical options under evaluation to support IATA e-freight Business Change.

10. World Trade Harmonization Forwarders Integrators
E-FREIGHT IS ABOUT
ALIGNMENT
World Trade Organisation
WTO
World Trade Harmonization
DOHA
UNECE
UN/ECE TF
Recommendtions
including Single
Window
EDIFACT &
UN XML
BP & Data
Models
UMM & CCTS
Methodologies
UN/CEFACT
UNeDocs
ISO
ISO TC 154
ISO 15000
(ebXML)
ISO 7372
(UNTDED)
WORLD CUSTOMS
Framework of
Standards
Data Model v2
WCO
EU Customs - TAXUD
e-Customs 2007
IATA
e-freight
STAKEHOLDERS
Airlines
Forwarders Integrators
Agents

11. BUSINESS VISION DEC 2015 DEC 2010 DEC 2007
 MULTI-MODAL Cargo
 Buyer to Seller
 Piece level
 Enabling IT
DEC 2010
 AIR CARGO Industry
 Shipper to Consignee
 Eliminate ALL DOCS
 95% E-freight penetration
 Enabling IT (inc. RFID)
DEC 2007
 AIR CARGO Early Adopters
 Forwarder to Forwarder
including Customs
 Eliminate PRIMARY DOCS
 E-freight on major trade-lanes
 Enabling IT (inc. RFID)
Quality Mgt Systems (Cargo 2000)

12. PILOTS Surveys being completed. covers all Airlines globally
targets specific Customs and Freight Forwarders.
Campaign for countries targeted as "Smart" Pilots.
Based on volume and technology for customs, carrier, forwarder.

13. BUSINESS STREAM SCOPE PROCESS PILOTS DELIVERY Vision, Scope &
Jun 2005
PROCESS
Sep 2005
PILOTS
Jan 2006
DELIVERY
Jun 2007
Vision, Scope &
Objectives
Process
Alignment
Global
Harmonisation
Implementation
 Business workshops
Document analysis
Multi model / end-to-end
 early adopters
 % air
 > 2010 full multi-modal
 Customs (WCO)
Industry (C2K)
Standard Docs (UN
CEFACT)
 Standards
 Smart pilots agreed
Local delivery plans
Commitment (MoU)
 Top 20 Gateways
Local cluster
workshops

14. LEGAL STREAM Carriage Treaties / limitations Customs regulations
Country
Dec 2005
Legal Framework
Development
Mar 2006
Carriage
Oct 2005
Delivery
Jun 2007
Treaties /
limitations
Customs
regulations
Accreditation /
commitment
Implementation
Solitions
 MP 4 & MC 99
Solution generation
Remove obstacles
 Local agreements
Document ownership  Solution generation
Remove obstacles
 Technical contracts
Local cluster MoU’s
Legal strategy & plan
 Treaty resolution
Regulation resolution

15. TECHNICAL STREAM Current Technical capabilities Technical direction
Industry
Audit
Jul 2005
Technical
Solutions
Nov 2005
Supplier
Coordination
Jun 2006
Delivery
Jun 2007
Current Technical
capabilities
Technical
direction
Alignment
Implementation
 Air freight industry
Airlines
Freight Forwarders
Related industries
Technical workshops
 BP 1
BP 2
Supplier workshops
 WCO data model v2/ 3
UN CEFACT
C2K / WCO Process
E-freight timelines
Contracts / MoU’s
 Develop
Test
Accredit
Implement

16. OPTIONS TO SUPPORT E-FREIGHT DELIVERY
Three potential directions for technical solutions
Those Who Can, Do
Independent Body
Commercial Solution
Directions not exclusive
Multiple providers
Combinations possible

17. NEXT STEPS THROUGH TO DEC 2005
Business
Construct “Smart Pilots” of O&Ds, customs, carriers, forwarders
Develop Implementation strategy (local clusters)
Technical
Finalize technical direction / and preferred suppliers
Legal and Regulatory
Evaluate customs regulatory environment
Develop “global e-freight index”
Develop plan to accelerate MP4 / MC99 ratification

18. DOCUMENTS IN CONTENTION FOR EFREIGHT1
Forwarder reserves space with airline/airline confirms 2
Shipper Booking with Forwarder and route map initiation 3
Forwarder receives shipment and information from Shipper 4
Forwarder due diligence on shipment 5
Forwarder declares goods for export 6
Customs performs risk assessment goods export 7
Customs grants goods for export 8
Freight and information prepared fro transit to carrier (consolidation) 9
Freight and information are transferred to carrier 10
Carrier goods acceptance, pre-manifesting & notification to customer 11
Customs performs risk assessment cargo departure 12
Customs grants cargo release departure 13
Flight loading and final information check 14
Flight Departure 15
Carrier advises origin Customs of cargo departure

19. PROCESSES 16
Carrier ensures destination Customs is pre-advised prior to arrival, where necessary
16a
Forwarder ensures destination Customs is pre-advised of goods, where necessary 17
Destination Customs performs risk assessment cargo arrival 18
Aircraft arrival at destination airport 19
Report manifest to customs & appropriate regulatory agencies 20
Offload of freight and transfer to warehouse 21
Check freight and information against manifest 22
Report to forwarder 23
Report discrepancies to customs 24
Forwarder collects & verifies information 25
Customs grants in bond movement of cargo to Forwarder 26
Forwarder receives freight from carrier (in bond) 27
Forwarder declares goods for import 28
Customs performs risk assessment goods import 29
Customs grants good release import

20. PROCESSES 30 Forwarder notifies consignee 31 Arrange pick up/delivery32
Consignee receives freights and information and performs freight check 33
Proof of delivery

21. QUOTES
" Simplifying the Business is a platform for much-needed industry change. Strip out the complexity and the cost. Air freight is too important to be left behind. This industry needs the improved service, competitive edge and $1.2 billion in annual savings IATA
e-freight offers."
Giovanni Bisignani, Director General & CEO, IATA

22. QUOTES
" There is growing demand to conduct business in the same language used by much of the business world -- and that language is increasingly electronic. Customers are demanding it. Regulatory authorities are demanding it. Business partners are demanding it. The time for E-Freight is now."
David J. Bronczek, President and CEO, FedEx Express

23. QUOTES
“ The only way we can combat costs is to bring in better efficiencies that will enhance productivity. Electronic transactions will not just save the world from inefficiencies of physical paper pushing and associated red tape, but will also create better transparency and speedy real-time processing spanning the entire supply chain. IATA e-freight is the way forward, those who are reluctant to adopt this change will be left out in the cold.”
Ram Menen, Senior Vice President Cargo, Emirates

24. IN SUMMARY….
What does e-freight aim to do?
Eliminate need to produce and transport all paper documents for air cargo shipments.
What is e-freight worth?
1.2b US$ cost savings (reduce cost of paper issue and process by 80%, and shipment time by 25%).
When will e-freight benefits be delivered?
Dec 2010 onwards, with early adoption Dec 2007.
What is our e-freight approach?
Business Change, driving Process and Standards, enabled by Technology.
Align and mobilize all air cargo supply chain participants, led by IATA.
Use critical mass to address current government and regulatory obstacles

25. THANK YOU