11 November 2012

Ethiopia: Airlines to Provide Paperless Cargo Service

Ethiopian Airlines is hoping to start e-freight service to certain cargo destinations by December 2012, in order to reduce paperwork and save time when processing airway bills and other travel documents for cargo shipments, Fortune learned.

The e-freight initiative was launched in 2004 by the International Air Transport Association (IATA), an industry wide trade group headquartered inCanada, which has 240 Airlines accounting for 84pc of the current global air traffic as members worldwide, aiming to eliminate paperwork from the international air cargo supply chain.

As many as 30 documents may be needed for one cargo shipment, creating a lot of paperwork and delays, according to the IATA website. Eliminating paper documents will save 1.2 billion dollars industry-wide, IATA claims and envisions to have a 100pc e-freight penetration in the industry by 2015.

Ethiopiajoined the initiative and started the process of implementing e-freight for cargo flights in March this year.

The national carrier, which has hauled 42,000tns of cargo in 2011, usually issues airway bills to cargoes that are around twelve pages long and incorporates travel, trade and customs information. All these can now be processed online once Ethiopian starts the airway system. To do so, however, it must first fulfil IATA's several requirements for implementing e-freight. One of the requirements is for the Airlines to pass a High Level Assessment (HLA) and a Detailed Level Assessment (DLA).

Ethiopian has already passed HLA and is finishing with the DLA, according to an official in the cargo department involved in the project. In addition, if a country is to send cargo using e-freight system, it needs to be a signatory of an international agreement that the destination country is a participant of.

There are two major international agreements relating to airway carriage, the Montreal Protocol (MP4), which was signed in 1975 and entered into force in 1998 and the Montreal Convention (MC99) signed in 1999 and which entered into force in 2003.

While Ethiopian has signed the MP4 protocol gaining access to major export locations likeLiege,Belgium, should it use e-freight, it is not a signatory of the Montreal Convention.

"This means we cannot implement e-freight in emerging markets likeChina" the official from the cargo department told Fortune.

In order to rectify this, the Airlines had written a letter to concerned government offices including the Ethiopian Civil Aviation Authority (ECAA), Ethiopian Revenues & Customs Authority (ERCA), the Ministry of Finance and Economic Development (MoFED) and the Ministry of Trade (MoT).

"We received a request four months back, but since the issue also concerns customs, we have notified the Airline's officials to talk with them first," Bochu Sintayehu, senior legal expert at MOFED told Fortune.

Ethiopian is now conducting a study on the MC99 protocol and its cost and benefits to a country likeEthiopia.

Another requirement for country to launch e-freight is a streamlined customs law that can accommodate electronic documents when clearing Cargo.

"We need customs to recognize electronic information as valid customs document and set a system to accommodate it" the cargo official told Fortune.

ERCA has tried to incorporate this request in a draft amendment of the current customs law. The Authority had been working on this law since March 2011 and plans to present it to parliament soon.

The Airlines is now waiting on this law to start e-freight system to MP4 signatory countries.

No new technology is going to be installed to launch this system, as the Airlines believes that the current CHAMP cargo systems software it uses contains features which can handle e-freight, according to the cargo official.

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