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Utilizing Green Supply Chains

By: Simon Kaye, CEO, Jaguar Freight
Posted: July 27, 2010, from the August 2010 issue of GCI Magazine.

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Electronic tracking also eliminates inefficiency from physical keying or writing of routing numbers and freight identification. Not only is manual documentation slow and inefficient, but it also leads to high levels of human error. Every time a person has to manually key in a product code, there is the chance that they will make a mistake, and then the products will cease to exist along the rest of the supply chain, forcing a company to stop everything and search—typically wasting fuel in the process.

The E-freight Initiative

There is another subtle sustainability advantage from electronic tracking. The availability of information online and in real time can largely eliminate the need to print out reams of reports and forms that waste paper and all the other resources that go into making it. This is the major concern behind the e-freight initiative facilitated by the International Air Transport Association (IATA). An industry-wide initiative involving carriers, freight forwarders, ground handlers, shippers and customs authorities, the IATA e-freight project aims to take the paper out of air cargo. Each air cargo shipment carries with it as many as 30 paper documents—equivalent to 7,800 tons of paper a year, enough to fill 80 Boeing 747 freighters. As of 2010 IATA e-freight replaces 20 of these documents with electronic documentation.

The IATA estimates that the e-freight initiative can save up to almost $5 billion a year for the logistics industry, depending on the level of adoption. It will also result in faster supply chain transit times, given that the ability to send shipment documentation electronically before the cargo itself arrives can reduce the industry cycle time by an average of 24 hours. Add the greater accuracy of electronic documentation, and the sustainability advantages are substantial.

IATA e-freight meets all international regulations relating to the provision of electronic documents and data required by customs, civil aviation and other regulatory authorities. To participate in IATA e-freight, a location (country or territory) must pass high-level and detailed-level assessments to be certified as ready. Implementation requires local stakeholders (ground handlers, airlines, freight forwarders, shippers and customs officials) to define an e-freight operational procedure (E-FOP) for that location. Once an E-FOP is in place, the location is ready to go live. Freight forwarders who use electronic tracking as integral to their logistics operations will be best prepared to secure the efficiencies of e-freight in any jurisdiction.

The Rotterdam Rules

Customs and border protection officials are increasingly going to electronic processing systems for clearing import shipments. The direct interface provided by electronic tracking on the shipper and forwarder end is energy efficient, resource efficient and process efficient when dealing with such customs regimes. It also is fundamental to addressing the latest regulatory innovations involving one of the most paper-intensive parts of the logistics process. No globally sourced material can be shipped without a bill of lading, which shows where and from whom the goods were received, describes the shipment, and defines the liability of the carrier. It is not unusual for carrier bill of lading agreements to have voluminous terms and conditions, in particularly relating to insurance clauses—all of which typically have been documented and printed in great detail.