1. Simplifying the Business
IATA e-freight

2. 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:
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Background on the implementation of the Single Window or Integrated Logistics Platform (SW).
Who/what were the business drivers?
What problem had to be solved?
Which agendas/policies were addressed?
Role of technology and standards.
Requirements of cross border trade.
Who are the main participants in the Single Window - i.e. which government Departments, business and other agencies participate?
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 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 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
Brief introduction into your company.
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

5. The increasing pressure for e-freight
C2K
GHA’s
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

7.    So, are we entering a paperless era? Paperless? Paper-Free?
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!  
Brief introduction into your company.
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

9. Quality Management System
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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 stakeholders including:
270 carriers
200 customs authorities
 Well over freight forwarders
At least 20 industry bodies
Ground Handlers
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

13. Vision, Scope & Objectives
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

14. Process & Data : primary docs identified
Key
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

15. Process & Data: “to-be” data flows mapped
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

18. Involving the wider community of freight forwarders will be key
IATA e-freight: forwarders surveyed
Total number of Freight Forwarder locations (16 countries): 96
Total number of Freight Forwarder companies: 58
FFI members
Others forwarders
Involving the wider community of freight forwarders will be key
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

19. IATA e-freight: plan for pilot country selection
Systems/Business Jan 06
Legal - MOUs Early Adopters Feb 06
Legal – Government Audit Mar 06 – May 06
Legal – Assess Treaties May 06
Legal - MOUs Local Clusters May 06
Analyzing
Horizontal
and Vertical
Surveys
Obtain
Commitment
From Early
Adopter
Airlines
Government
and Customs
Audit
Assess
Impact of
Treaties
Obtain
Commitment
Local
Clusters
Analyze airline response.
Analyze Vertical response.
Initial Selection Smart Pilot Countries.
During Cargo Week, Obtain commitment from Cargo Committee Airlines.
Obtain commitment from other participating non-Cargo Committee Airlines (Air Canada, Iberia).
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.
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 MOUs from all other stakeholders involved in Local Clusters: Airlines, Freight Forwarders, and Customs Authorities.
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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 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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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 government’s e-freight air cargo supply chain have ownership issues attached at the international, national, local, or private level
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

23. Treaties: status of “smart pilot” governments
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

25. e-freight implementation: capability roadmap
Shipper
Forwarder 1
Customs 1
Forwarder 2
Customs 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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

26. IATA e-freight: pilot clustersCA SE GB DE NL US CN HK ES JP
UAE KR
MP4 MY SG
MC99
MC99?
Both CL AU ZA
Neither
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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 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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

28. Workshops May 06 >>
IATA e-freight: business implementation plans
Plan Feb 06
Agenda Feb 06
Organize Feb 06
Handshakes Mar 06
Workshops May 06 >>
Develop
Global
Implementation
Plan
Complete
Global
Agenda
Organize
Local
Workshops
Meet with
StB Reps
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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 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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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 / MoU’s
Develop
Test
Technical accreditation
Pilot Implementation
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

33. Legal Framework Development Supplier Coordination
Milestones
2005
2006
2007
Scope
Process
Pilots
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
Industry Audit
Technical Solutions
Supplier Coordination
Current Technical capabilities
Technical direction
Alignment
Implementation
Technical
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

34. World Customs Organization
Gathering Momentum
16 x Customs
World Customs Organization
(WCO)
HongKong
TradeVision
C2K
Singapore
TradeXchange
50+ Freight
Forwarders
IATA e-freight
6 x Airlines
9 x
Forwarders
14 x Airlines
E-customs
CEFACT
UN e-docs
United Nations
ASW
ASEAN
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

35. IATA e-freight: How to stay connected!
Click on the StB Support Portal button
Updates
FAQs
Materials
Log request for follow up
StB eNewsletter
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005