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IATA e-freight
Simplifying the Business
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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:
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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
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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
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UN/CEFACT
WCO
Stakeholders
World Trade Harmonization GATT
UN/ECE TF Recommendtions including Single
Window UNeDocs
BP & Data Models
UMM & CCTS Methodologies
UNECE
EU Customs - TAXUD
World Customs
IATA e-freight
Airlines
Freight Forwarder
Integrators
Single Window Data Model v2
e-Customs
EDIFACT & UN XML
World Trade
ISOISO7372 ISO 15000
ISO TC154
IATA
US DoT
ASEAN ASW
C2K
GHA’s
The increasing pressure for e-freight
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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
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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!
So, are we entering a paperless era?
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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
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2007
2010
2020
All cargo (general & special) Air freight Forwarder to consignee Eliminating the need to
produce and transport typical paper documents
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)
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
Quality Management System
Scope / Objectives
Scope / Objectives
Vision
IATA e-freight: business vision
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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
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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
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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
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Business Stream
ScopeJune 05
ProcessSep 05
PilotsApr 06
DeliveryJun 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
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PRIMARY Documents
Shippers Letter of Instruction House Air Waybill Master Air Waybill (Consolidation) Air Waybill (Single) Commercial Invoice Packing List Proforma Invoice Flight Manifest House Manifest Import Goods Declaration Import Cargo Declaration Export Goods Declaration Export Cargo Declaration Customs Release Airline Delivery Note Forwarder Delivery Note Forwarder Pickup Note
Process & Data : primary docs identified
Document Raised By Document Viewed By
Key
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Process & Data: “to-be” data flows mappedHigh level e-freight data-flows (draft) ver. 0.2 08/02/06 < Responsible Roles >
Import Customs (goods
clearance)Import forwarderExport Forwarder
Create House AirWaybill
message (FHL)
Create House AirWaybill
message (FHL)
Consignee
Import Customs(security)
Import BrokerCarrierExport CustomsExport BrokerShipper
Create “Cargo”information
Message- Shipper details- Consignee details- Pieces- Weight- Dimensions- Marks/numbers- Gen. description- Payment method- Dep/Arr airports- Routing (optional)- Value – carriage- Insurance requested- Handling info/remarks- Date / signature
Create “Goods”information
Message- Detailed description of goods- Commodity codes- Value for CustomsEtc…..
Create House AirWaybill
message (FZB)
Create Master Air Waybill
message (FWB)
Create Export Goods Declaration message(may be done by shipper, forwarder or separate broker)
Receive & “accept” FWB
Fwdr / carrier contract
Create Flight Manifest
message (FFM)
Post flight confirmation of departure
Create “post flight”
confirmation of departure” message
Flight departed
Goods cleared for export
Clear Export Goods
Create “export goods release”
message
yes
Goods cleared?
Create Import Goods Declaration message (part)
Complete Import goods
declaration message
Clear Import Goods
Clear import cargo
(security)
Create “goods released import”
message
Goods ok to release to forwarder
Goods ok to collect from carrier
Create Consolidation
List (FHL)
Create Consolidation
List (FHL)
Create Consolidation
List (FHL)
Create Consolidation
List (FHL)
Goods cleared for export
Requires one FHL per HAWB since shipper/consignee details are required by Import customs (security)
Shipper /fwdr
Contract
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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
IATA e-freight: identifying pilot countries
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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
IATA e-freight: customs surveyed
Chosen on the basis of:-
•WCO recommendations
•Global cargo volume
•Geographical split
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Total number of Freight Forwarder locations (16 countries): 96
Total number of Freight Forwarder companies: 58
FFI members 8
Others forwarders 50
IATA e-freight: forwarders surveyed
Involving the wider community of freight forwarders will be key
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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
Analyzing Horizontal and Vertical
Surveys
Government and Customs
Audit
Assess Impact of
Treaties
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.
During Cargo Week, Obtain commitment from Cargo Committee Airlines.
Obtain commitment from other participating non-Cargo Committee Airlines (Air Canada, Iberia).
Obtain MOUs from all other stakeholders involved in Local Clusters: Airlines, Freight Forwarders, and Customs Authorities.
Obtain Commitment
Local Clusters
Legal – Assess Treaties
May 06
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 Commitment From Early Adopter Airlines
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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
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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
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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
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Treaties: status of “smart pilot” governments
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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
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e-freight implementation: capability roadmap
Shipper
Shipper
Shipper
Shipper
Forwarder
1
Forwarder
3
Forwarder
5
Customs 1
Customs 3
Customs 2
Customs 4
Forwarder
2
Forwarder
4
Forwarder
6
Customs 5
Customs 6
e e
Forwarder infrastructure in placeCarrier infrastructure
in place Customs SW roll-out
e
Shipper infrastructure
in place
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CA
US
CL
GBSE
DE
ES
NL
ZA
UAE KR
SG
JP
MY
AU
CN
IATA e-freight: pilot clusters
HK
MP4
Both
MC99
Neither
MC99?
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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
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Develop Global
Implementation Plan
Complete Global Agenda
Meet with StB Reps
Organize Local
Workshops Workshops
PlanFeb 06
AgendaFeb 06
OrganizeFeb 06
WorkshopsMay 06 >>
HandshakesMar 06
IATA e-freight: business implementation plans
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
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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
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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
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Technical Stream
Current Technicalcapabilities
Technicaldirection
IndustryAudit
Jul 05
Technical Solutions
Nov 05
Supplier Coordination
June 06
DeliveryJul 07
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
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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
Technology: options to support delivery
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Milestones
Legal Country
Legal FrameworkDevelopment
2005 2006 2007
Current Technicalcapabilities
Technicaldirection
IndustryAudit
Technical Solutions
Alignment Implementation
Supplier Coordination
Technical
Treaties /limitations
Government & Customs
Carriage
Cluster commitment
Legal solutions
Legal
Vision, Scope &Objectives
Process alignment
Pilot preparation
Pilot Implementation
Scope Process Pilots
Business
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Gathering Momentum
CEFACTUN e-docs
UnitedNations
50+ FreightForwarders
IATA e-freight
16 x Customs
9 x Forwarders
6 x Airlines
World CustomsOrganization
(WCO)
14 x Airlines
C2K
E-customs
ASWASEAN
SingaporeTradeXchange
HongKongTradeVision
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IATA e-freight: How to stay connected! http://www.iata.org/whatwedo/simplibiz1
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