Strategic Trends in Air Cargo e-freight and growth
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1 Strategic Trends in Air Cargo e-freight and growth Fernando Fetter São Paulo, 10th December 2013 ICAO/ANAC Regional Symposium,
2 Air freight traffic development to/from Brazil projection SOURCE - ANAC/INFRAERO & DB Schenker estimate
3 Air freight paper traffic development to/from Brazil...almost 100 million pieces of paper handled per year SOURCE - DB Schenker estimate 3
4 What drives (and halts) air freight growth... efficiency services rules infra structure trade economy... trade and traffic hubs will emerge and prosper where they can be more efficient... air freight mode will become more attractive if more efficient 4
5 The progress cycle traffic growth has to come together with process improvement... the present document handling structures can not support much further growth in traffic efficiently, i.e. without increasing costs, 5
6 Traditional general cargo process Shippers Origin Freight Forwarders Export Customs Origin GHA Carrier Destination GHA Import Customs Destination Freight Forwarders Building and implementing an end-to-end paperless transportation process for the air cargo industry where paper documents are replaced with the exchange of electronic data A complex set of documents flows over a comprehensive chain of controls and slowing barriers Consignees AWB HWB invoice packing list security decl form A wh receipt customs entry consol manifest DGR road manif... 6
7 Today s operations high demand on document archiving and retrieval Paper based operation is costly and not efficient Real world airfreight department Real world document archiving One pouch per shipment travelling the world Real world document retrieval 7
8 Today s operations: Paper document issues in Brazil Paper based operation slows down the logistics chain Missing Documents Excessive Control Work Discrepancies Different Rules in Different Ports Outdated Documents Consequential Loss Delays Increased Warehouse Costs 8
9 What is e-freight? replacement of paper documents by electronic transactions in international trade facilitation solution developed jointly by industry since 2008 endorsed by FIATA Federation of International Freight Forwarders Adopted by IATA Cargo Services Conference (2009) as recommended practice Filed by Governments. Multilateral legal base between stakeholders Successfully implemented by many airlines and forwarders SOURCE: IATA 9
10 What does e-freight have to do with air cargo growth? e-freight is a powerful facilitator: to boost efficiency of cargo flow enhancing the image of a hub capacity multiplier opening opportunities for transit cargo (hub) reducing barriers to start of new business generally improving the attractiveness of air cargo 10
11 Some of the busiest and most efficient Hubs... international air cargo movement in 1000Tonnes (2012) Hong Kong 4062 Memphis 3917 Frankfurt 2066 Tokyo ? GRU 474 VCP 248 Shanghai 2939 Miami 1929 MAO 156 Seoul 2457 Singapore 1899 GIG 119 Anchorage 2450 Beijing 1787 Dubai 2267 Los Angeles 1688 Louisville 2188 Taipei 1578 Paris 2151 London 1556 e-freight enabled SOURCE: ACI Airports Council INternational and INFRAERO/ABV/GRU-Airport 11 Chicago 1512 Amsterdam 1511
12 How does e-freight work? Multilateral legal base (IATA) Electronic data interchange (EDI) between industry entities Standard protocols for electronic exchange (Cargo IMP, XML) P O R T A L 12
13 Moving towards e-shipments Shippers Incoming Invoice Origin Freight Forwarders + etruck manifest Export Customs Terminal e-chek-in Airports Import Customs ecustoms ebooking ecustoms eaccept ehawb ebooking Carrier emawb earchive emawb ehawb Customer Invoice Consignees...the eawb is the first core document in the transition towards comprehensive efreight
14 What is e-awb? replacement of paper Airwaybill by electronic messages between issuing forwarder, airline and other partners of the logistics chain IATA Resolution 672 (April 2013) system enabled by over 50 airlines, 400 forwarders in 140 countries, 2856 locations including BR, test-shipments from 15December go-live 2013 in Chile, Colombia, Peru, Mexico industry target: 70% by 2013; 100% by 2015 SOURCE: IATA 14
15 eawb Overview Future eawb Transactions Paper Air Waybill (Now) Front (600a) + Back (600b) eawb (Future) Electronic messages Reso Signed EDI agreement 15
16 Time savings through the eawb process process time - 50% document handling + 100% quality control - 90% information update - 95% customs entry - 90% warehouse entry - 90% document filing, SOURCE: IATA / Cathay Pacific Case Study Hong Kong 16
17 Today s operations: Paper document issues in Brazil Paper based operation slows down the logistics chain Missing Documents Online Documents Effective Control Traceability Excessive Control Work Consistency Discrepancies Automatic Update Outdated Documents Consequential Loss Reduced Claims Just in Time Delays Different Rules in Different Ports Reliable Standards Increased Plannable Costs Warehouse Costs 17
18 e-freight: benefits for all Cost Savings: Document processing Document production costs Archiving Airline: agile transaction cost savings load preview Reliability: Douments available online 24/7/365 Customer: Sending doc. instantly can reduce Transit times Benefits Terminal: cost savings traffic forecast Sustainability: Less paper is needed User friendly document mgmt Visibility: Easy online doc. track & tracing Customer Service Quality: No Incomplete or missing documents for transport Customs: data quality consistency integrity traceability 18
19 e-freight in Brazil: conclusion Brazil is ripe to introduce e-freight need to accelerate growth of the economy and trade modern and integrated customs system improving communications network increasing pax traffic and number of airlines privatization of airports: opportunities to change need to remove bureaucratic hurdles willing collaboration between industry stakeholders and officials available useful experience from other countries 19
20 Delivering solutions. Obrigado! Thank you!
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