IATA goes for e-freight

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 06 Nov 2007

The International Air Transport Association (IATA), working with seven cargo airlines and ground handling agents, has entered the paperless freight era with the start of six e-freight pilot projects.

"The paper-free era for air freight began yesterday," says IATA CEO and director-general Giovanni Bisignani.

"This first wave of pilots will pave the way for a global roll-out of e-freight that will eliminate the paper that costs this industry $1.2 billion every year. Combined, these documents could fill 39 Boeing 747 cargo freighters each year - making e-freight a win for the business and for the environment."

Cargo on key trade routes connecting Canada, Hong Kong, the Netherlands, Singapore, Sweden and the UK will now be processed electronically.

"E-freight is a revolution for an industry that is absolutely critical to modern life. For airlines it is a $55 billion business that generates 12% of their revenue. More broadly, air cargo transports 35% of the total value of goods traded across borders," says Bisignani. "The potential impact of greater efficiency in air cargo has very broad implications across the global economy."

E-freight pilots will systematically test common standards, processes, procedures and systems designed to replace paper documents that typically accompany air freight with electronic information.

During the initial phase, selected shipments will travel without a number of key documents that make up the majority of the paperwork, including the house and master airway bills. Results from the pilots will be used to expand e-freight to other territories.

Pilot preparation

IATA e-freight requires that business, technical and legal frameworks are in place to allow airlines, freight forwarders, customs administrations and governments to seamlessly exchange electronic information and e-documents. The six pilot locations were selected on their ability to meet these criteria, along with their network connectivity and sufficient cargo volumes.

At each location, cargo experts from participating airlines, freight forwarders, ground handling agents, local customs administrations and airport authorities worked together closely over the past 10 months to prepare the pilots.

"High oil prices and cumbersome processing requirements are handicapping air transport`s competitiveness with sea shipping," says Bisignani. "Sea shipping is expected to grow 6% annually over the next five years, compared to 4.8% for air cargo. E-freight makes a four-decade leap, bringing strengthened competitiveness by cutting costs and improving transparency and consistency throughout the supply chain. This is good news for the customer and will help shore-up air transport`s competitiveness with sea shipping and other modes of transport."

E-freight is one of five "Simplifying the Business" projects led by IATA to improve service and cut costs. The industry has set a deadline of the end of 2010 for the implementation of e-freight wherever feasible.