International Air Transport Association

 

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December 2008

 

IATA E-FREIGHT REVISES BUSINESS CASE, INCREASES BENEFITS ACROSS AIR CARGO SUPPLY CHAIN

The 188th IATA Board of Governors meeting concluded in Geneva on December 5th, 2008. The board confirmed the vital importance of IATA e-freight in the deteriorating economic environment, approving a revised business case that dramatically increases savings to the air cargo industry.

The supply chain will benefit from annual savings of up to US$4.9 billion, including:

  • Up to US$1.7 billion in reduced document processing costs
  • Up to US$1.7 billion in inventory savings for shippers
  • Up to US$1.8 billion in savings due to increased market share from sea-freight

These figures are based on the industry achieving 100% e-freight, replacing 16 documents with electronic messages, and organic growth of freight volumes. Were the industry to achieve 80% e-freight, the supply chain savings would be US$3.1 billion annually.

Other benefits include:

  • Faster shipments: the ability to send shipment documentation before the cargo itself can reduce the industry cycle time by an average of 24 hours.
  • Greater accuracy: Electronic document 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 are also less likely to be misplaced, so shipments will not be delayed because of missing documentation.
  • 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.

The complete business case is in the IATA e-freight Handbook. The handbook is the comprehensive guide to implementation and is available free of charge on the IATA e-freight website.

Built by the supply chain, for the supply chain

Facilitated by IATA, the project is an industry-wide initiative involving carriers, freight forwarders, ground handlers, shippers and customs authorities. “We are committed to getting everyone involved,” said Steve Smith, IATA e-freight Project Director. “Our ability to deliver this kind of industry change is based on developing a product that works for everyone.”

To date, 31 freight forwarders are involved in IATA e-freight. Several shippers and freight forwarders are members of the e-freight Advisory Group (eAG), which sets out project strategy, processes, and required standards.

Picking up speed: more locations, more volume and more documents in ‘09

In one year, the number of IATA e-freight locations has tripled, from six in 2007 to 18 in 2008. “This is a significant achievement, particularly given the fact that countries must pass two levels of assessments – the first of which involves ratification of international treaties – to be endorsed as ready for IATA e-freight,” added Steve Smith.

In 2009 five more locations – Belgium, China, Japan, Malaysia and Switzerland – will become e-freight live. Belgium, China and Malaysia will need to first complete LAPs (Local Action Plans that meet the assessment criteria). Fourteen more airports will also become e-freight live. Half of these airports will be in the USA. Three more documents – the Dangerous Goods Shipper’s Declaration, Transfer Manifest and Shipper’s Letter of Instruction – will be replaced by electronic messages, bringing the total number of messages to 16. Finally, the project will focus on adding additional stakeholders in locations already live – through the use of the handbook.

By the end of 2010, locations that account for 81% of all international freight will be e-freight capable, paving the way for the supply chain to realise these savings.

How to get involved

  • The IATA e-freight homepage provides up-to-date information on the e-freight status of countries around the world. Find out which locations are live and which airlines and freight forwarders are participating.
  • In 2009 IATA e-freight will host a series of workshops around the world, offering stakeholders the opportunity to interact with subject matter experts. A list of workshops will be made available on the website in early 2009.
  • To provide feedback or for further information, please contact us at IATAe-freight@iata.org.

The StB Global Team

 

 

IATA
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