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IATA e-freight

Simplifying the Business. IATA e-freight. 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

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IATA e-freight

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  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 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 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? 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!   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. All cargo (general & special) Air freight Forwarder to consignee Eliminating the need to produce and transport typical paper documents 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) 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 16 000 stakeholders including: • 270 carriers • 200 customs authorities • Well over 15 000 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. ScopeJune 05 ProcessSep 05 PilotsApr 06 DeliveryJun 07 Business Stream 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: identifyingpilot 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. 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 Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

  19. IATA e-freight:plan for pilot country selection Systems/BusinessJan 06 Legal - MOUs Early Adopters Feb 06 Legal – Government Audit Mar 06 – May 06 Legal – Assess TreatiesMay 06 Legal - MOUs Local ClustersMay 06 Obtain Commitment From Early Adopter Airlines Analyzing Horizontal and Vertical Surveys Government and Customs Audit Assess Impact of Treaties Obtain Commitment Local Clusters • 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. • 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. • During Cargo Week, Obtain commitment from Cargo Committee Airlines. • Obtain commitment from other participating non-Cargo Committee Airlines (Air Canada, Iberia). Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

  20. Governmental, Customs, and RegulatoryIssues • 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 RegulatoryIssues • 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 Forwarder 4 Shipper 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 clusters CA 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. IATA e-freight:businessimplementation plans HandshakesMar 06 PlanFeb 06 AgendaFeb 06 OrganizeFeb 06 WorkshopsMay 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 IndustryAuditJul 05 Technical SolutionsNov 05 Supplier CoordinationJune 06 Delivery Jul 07 Current Technicalcapabilities Technicaldirection 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. Milestones 2005 2006 2007 Pilots Scope Process Vision, Scope &Objectives Process alignment Pilot preparation Pilot Implementation Business LegalCountry LegalFrameworkDevelopment Carriage Treaties /limitations Government & Customs Cluster commitment Legal solutions Legal TechnicalSolutions SupplierCoordination IndustryAudit Current Technicalcapabilities Technicaldirection Alignment Implementation Technical Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

  34. C2K Gathering Momentum 16 x Customs World CustomsOrganization (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 UnitedNations ASW ASEAN Simplifying the Business Ó INTERNATIONAL AIR TRANSPORT ASSOCIATION 2005

  35. IATA e-freight:How to stay connected! http://www.iata.org/whatwedo/simplibiz1 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

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