Benefit

An evaluation study conducted in Taiwan showed that approximately 70 percent of the paperwork required for international air cargo shipments included redundant data entry that could have been handled by automated Electronic Supply Chain Manifest (ESCM) systems.


22-26 January 2006
Taiwan


Summary Information

Air cargo operation procedures are complicated, with various parties involved. To clarify the duties of transport and custom clearance, documentation is necessary at each step. Information flow is one bottleneck to the total time of cargo processing, which is critical to the performance of global logistics. To meet the requirement of air cargo efficiency, and to reduce the role of human labor in documentation, information technology offers some solutions towards a paperless working environment. The Federal Aviation Administration (FAA) took the first step by authorizing the American Truck Association Foundation (ATAF) to develop an Electronic Supply Chain Manifest (ESCM) system in 1997 to improve the labor intensive and low efficiency telephone calls in processing US air cargos. The objective of the system is to create a platform of interchanging electronic files among various parties instead of paper documents delivered by human labor. A smart card system is also integrated to enhance the convenience of retrieving cargo information at receiving and delivering by ground transporters (1).

RESULTS

One data processing company in Taiwan found a major factor of information delay: paper documents with redundant data. According to their investigation, there is about 70 percent data redundancy in air cargo documents which are still made and delivered by human labor (2).
    In the US, $1.50 to $3.50 was predicted to be saved with each transaction by using ESCM (3). This study analyzed the cost savings of introducing a similar ESCM system in Taiwan. The cost saving of forwarders, the airlines, the cargo terminals, and the customs were all estimated. Integrated computer-aided manufacturing definition was selected as the tool to decompose the air cargo export process in Taiwan. One typical export case was analyzed, and the cost saving after introducing ESCM in the case was calculated. It showed the following benefits.
    • The forwarder would save 546 New Taiwan (NT) Dollars for each transaction, while the airline would save 66 NT Dollars.
    • The cargo terminal would save 6.26 NT Dollars, and the customs function would save 3.94 NT Dollars.

    References

    1. ATA Foundation. O’Hare Cargo Security Access System: Testing the Effectiveness of Biometric Smart Card Security. June, 2000.

    2. Trade-Van Information Service Co., The Initiator of Convenient Trade and Automatic Custom Clearance, Briefing Notes, 2004

    3. U.S Department of Transportation Office of Affairs. U.S Secretary of Transportation Mineta Announces Successful ITS Operational Test for Intermodal Freight, February, 2003. http://www.dot.gov/affairs/briefing.htm

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    Source

    Measuring the Cost Savings of Applying Electronic Supply Chain Manifest in Air Cargo Terminals

    Author: Shon, Zhengyi, Jinn-Tsai Wong, and Teng-Wei Wang

    Published By: Paper Presented at the 85th Annual Meeting of the Transportation Research Board

    Source Date: 22-26 January 2006


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    Benefit ID: 2008-00566