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

2. 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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

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

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

5. 2008 - 18 locations and 25 airports live
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

6. IATA e-freight Basics: When?
Belgium
Switzerland
China
Japan
LIVE!
Malaysia
2009 – 5 more locations go-live
14 new airports in current live countries
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

7. 44 locations live accounting for approx 80% of international trade
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

8. IATA e-freight: Scope of Documents
Shippers
Origin-Destination
Carrier
Origin
Freight Forwarders
Import Goods Declaration
Customs Release Import
Export
Customs
Import
Customs
Invoice
Packing List
Certificate of Origin
Letter of Instruction
Dangerous Goods Declaration
Destination
Freight Forwarders
Master Air Waybill
House Waybill
House Manifest
Export Goods Declaration
Customs Release Export
Flight Manifest
Transfer Manifest
Export Cargo Declaration
Import Cargo Declaration
The remaining documents are not in scope, as they are not currently supported by international standards (not even on paper, as they are local documents). 
2009: 16 Documents in scope 2010: 20 documents in scope 64% of the paper in volume
Consignees
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

9. Standards defined are multimodal and interoperable
IATA e-freight: Scope of Documents
Shippers
Origin-Destination
Carrier
Origin
Freight Forwarders
Import Goods Declaration
Customs Release Import
Export
Customs
Import
Customs
Invoice
Packing List
Certificate of Origin
Letter of Instruction
Dangerous Goods Declaration
Destination
Freight Forwarders
Master Air Waybill
House Waybill
House Manifest
Export Goods Declaration
Customs Release Export
Flight Manifest
Transfer Manifest
Export Cargo Declaration
Import Cargo Declaration
·    IATA e-freight is taking a multimodal approach to its electronic messaging standards. Electronic messages that replace documents used in all types of transport – like the packing list, invoice or certificate of origin – work for air, sea and land shipments.
Interoperability is a key criteria in the development of IATA e-freight messaging standards. The 13 electronic documents standards developed – and the 3 more on the way in 2009 – already work for companies large and small and allow systems to communicate with each other, including systems operated by customs and civil aviation authorities.
Standards defined are multimodal and interoperable
Consignees
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

10. Expand with new locations: Global Implementation
IATA e-freight: Project Timeline Summary
2006
2007
2008
2009
2010
Initial scoping/
target definition/
planning
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
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

11. 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
1.7 bn
0.8 bn
1.7 bn
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

12. IATA e-freight: The Business Case for e-freight
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
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.
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

13. IATA e-freight: The Business Case for e-freight
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
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.
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

14. IATA e-freight: Specific Benefits
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

15. IATA e-freight: Specific Benefits
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 shipper’s savings of US$ 870 million per year
In Dubai, with no paper, there’s no need to queue at customs counters. Fees can be paid through electronic debit, saving time.
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.
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

16. IATA e-freight: Specific Benefits
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
Goods Sold
12% buffer stock
25% of this is due to the unreliability of the logistics chain
IATA e-freight will reduce this by 22%
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

17. IATA e-freight: Specific Benefits
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

18. IATA e-freight: Specific Benefits
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

19. IATA e-freight: Specific Benefits
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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

20. 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
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009

21. Thank you! http://www.iata.org/stbsupportportal/efreight
Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2009