e-freight
The Benefits of e-freight for a
Network Freight Forwarder
Kuehne + Nagel Case Study
Background
 Air cargo supply chain stakeholders have interest in
understanding how e-freight benefits can be realized
 In 2012, IATA published a study of benefits realized by a
leading airline (Cathay Pacific) in 100% e-AWB scenario
 This study shows benefits for a multinational freight forwarder
(Kuehne + Nagel)
 A final study focused on benefits for independent (SME)
forwarders is to be commissioned
Key findings
 e-freight implementation brings between 8% and 44% manpower
savings for the analyzed processes of a multinational freight
forwarder (Kuehne + Nagel), depending on implementation
scenarios
 Implementation of e-AWB (with e-House Manifest) is a natural
first step with cost benefits between 8% and 19% (and even
higher if e-Customs and implementation of internal e-processes
within the forwarder organization- i.e. e-HAWB- are factored in)
 Additional, non-monetary benefits include speed, quality, visibility,
simplicity and regulatory compliance, making the overall case for
e-freight extremely compelling
GACAG roadmap to paperless
In December 2012, the Global Air Cargo Advisory Group (GACAG*)
published the industry Roadmap to 100% paperless with a Three-Pillar
approach:
 Pillar I: Engaging regulators and governments worldwide to create an ‘efreight route network’ with fully electronic customs procedures and
where regulations support paperless shipments
 Pillar II: Working collaboratively within the cargo supply chain to digitize
the core industry transport documents, starting with the air waybill
 Pillar III: Developing a plan to digitize the commercial and special cargo
documents typically accompanying airfreight today, in or outside of
the ‘Cargo pouch’
For more information please visit www.GACAG.org
* International Federation of Freight Forwarders Associations (FIATA), Global Shippers' Forum (GSF), International Air
Transport Association (IATA), The International Air Cargo Association (TIACA)
GACAG e-freight Roadmap
Main constrains in paper environment
 Handling of paper is time consuming
 Freight Forwarder reduced
 Risk of wrong data

 Multiple re-capture of data
 Must transport both freight and paper
 Risk of rejection of documentation at any
stage
 Risk of overlooking special cargo
requirements

Impact




efficiency
Potential incorrect billing by
Airlines
Risk of customs hold cargo and
delay delivery to consignee
Data capture redundancy (same
data-many time)
Increase of workload
Extra time and space required to
store and archive paper
documents
May lead to low customer
(Consignee) satisfaction
Benefits by implementing e-document
procedures


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Cost: decrease in document processing & document transportation
Speed: ability to receive and send relevant shipment information in advance of the
cargo itself. This is expected to reduce the total cycle time by up to 24 hours
Quality and Reliability:
 Electronic documents auto population – receiving the shippers data directly
into the Forwarder’s system- allows one time electronic data entry at point of
origin reducing and delays to shipments due to inaccurate or inconsistent data
reentry
 Electronic documents are more easily archived and retrieved, reducing delays
due to missing information
Visibility: electronic documentation and processes facilitate electronic track and trace
functionality and real time visibility of freight movement.
Simplicity & Regulatory compliance: as supply chain stakeholders adopt electronic
processes and messages, the air cargo movement will be simpler to execute and
regulatory compliance will be facilitated.
What are the cost benefits of
e-freight for a multinational
forwarder?
e-freight brings benefits in export,
import and archive processes
Export
process
Receive
freight and
documents
Sort collected
documents
& consolidate
Import
process
Repatriate
documents
Prepare
invoice &
pouch
Archive
process
Archive
documents
Destroy /
Filing
documents
Prepare
documents
& pouch
Deliver freight
& documents
to consignee
Deliver
freight only
to airport
Build the
pouch &
deliver to
airport
The study focuses specifically on
export processes
Receive
freight and
documents
Sort collected
documents
& consolidate
Import
process
Repatriate
documents
Prepare
invoice &
pouch
Archive
process
Archive
documents
Destroy /
Filing
documents
Export
process
Prepare
documents
& pouch
Deliver
freight only
to airport
Deliver freight
& documents
to consignee
Build the
pouch &
deliver to
airport
FOCUS OF
THIS CASE
STUDY
Not analyzed in detail (due to
time/resource constraints), however
expected to yield comparable benefits
to export process
Benefits of e-Archiving already analyzed
in previous case study (see
www.iata.org/e-freight)
For forwarders, benefits come from
data integration with key partners
Shipper-Forwarder
integration: electronic
Commercial invoice and
electronic Packing List
between Shipper and
forwarder at origin
Airline- Ground HandlerForwarder integration:
electronic AWB and
electronic House manifest
between airline forwarder
and ground handler at origin
Forwarder-Forwarder
integration: integration
between origin forwarder and
destination forwarder,
materialized by the removal
of the document pouch
traditionally accompanying
the freight
e-freight leads to elimination or reduction
of tasks from paper process
e-freight benefits for a Multinational
Forwarder – Kuehne + Nagel HKG case
Benefits (i.e. labour
hours saved) range
from 8% to 44%
depending on
implementation
scenario
* Includes 14 % from Shipper integration and 6% from e-Pouch
**Includes 14% from Shipper integration and 12% from e-Pouch
Additional benefits
Other cost
and time
savings
Improved
customer
service
and
quality
Sustainable
development
 Saved time for tracking shipment status
 Reduce storage cost by eliminating paper document and free up
valuable office space
 Eliminate costs of paper destruction and recycling in e-freight
environment
 Save cost of blank paper air waybills and house air waybills








Fewer lost documents
Less discrepancies due to missing documents
Better shipper asset protection due to reduced information access
Better handling of urgent shipments
Reduced end-to-end transit times
Faster answer to customer via digital information
Faster, more reliable customs clearance and goods delivery
Supply chain partners Communicate using standard Electronic Data
Interchange regulations
 Eco- friendly
 Boost company status in the community by helping part of green
revolution
Conclusion
 e-freight implementation brings between 8% and 44%
manpower savings for the analyzed processes of a
multinational freight forwarder (Kuehne + Nagel), depending on
implementation scenarios
 Implementation of e-AWB (with e-House Manifest) is a natural
first step with cost benefits between 8% and 19% (and higher
if e-Customs and implementation of internal e-processes within
the forwarder organization- i.e. e-HAWB- are factored in)
 Additional, non-monetary benefits include speed, quality,
visibility, simplicity and regulatory compliance, making the
overall case for e-freight even more compelling
What made this implementation possible?
Favorable regulatory
Environment
(e-Customs procedures
in place)
Process
optimization
e-freight
Investment
in
Technology*
Stakeholder
involvement
*Includes implementation of paperless process within the forwarder organization, i.e. internal e-House Air
Waybill (e-HAWB) process
Appendix 1: History of e-freight program
• In 2005 and 2006 e-freight program feasibility and scoping studies
were carried out
• In 2007 and 2008 pilots were conducted.
• In 2009 and 2011 an initial network of e-freight routes was developed
and standards supporting the defined business process were created
• In 2012, IATA worked with its partners in the Global Air Cargo
Advisory Group (GACAG), to develop an industry roadmap to
achieve the vision of paperless air cargo transportation. The
roadmap was formally endorsed by all GACAG members and
published in December 2012.
Appendix 2: Pre-Requisites for e-freight
implementation by a forwarder
There are two important additional components to be considered while
implementing paperless procedures:
 e-House Airway Bill (e-HAWB): the ability of a forwarder to exchange
internal documents electronically. The case study assumes that the forwarder,
when implementing e-freight with its airline, GHA and shipper partners, has
already implemented internal paperless procedures (e-HAWB).
 e-Customs procedures: the ability to perform electronic customs
declarations and get electronic release. In the case of Hong-Kong, electronic
procedures existed before the implementation of the other e-freight
components . The case study focuses solely on the impact of non-customs
components.
For a freight forwarder without internal paperless procedure and for a location
without e-customs procedure in place, the total case for e-freight is even more
compelling.
e-freight: Find out more
Tools provided by IATA to support you:
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e-Cargo Matchmaker: who does e-freight where
e-freight complete Case Studies
e-freight Handbook: implementation guide
e-freight self-assessment questionnaire
e-freight Model EDI agreement (for e-AWB)
Capability Matrix of IT Providers
www.iata.org/e-freight and www.iata.org/e-AWB