The Columbus Electronic Freight Management system reduced total transit time of an air-freight supply chain from 96 hours to 82 hours (14 percent) and saved $5.94 per shipment in labor costs across the entire supply chain by reducing paper work.
The CEFM project covers the entire air cargo supply chain, from oversea suppliers in China to the shippers' distribution centers in Columbus, Ohio. Design and development of CEFM were completed during 2006 and early 2007, and the deployment test was conducted from May 29, 2007 to December 4, 2007. The evaluation included an analysis of the consignment supply chain data that was received and exchanged by CEFM and stored for each partner.
The evaluation report includes descriptions of CEFM and defines quantitative and qualitative benefits in the following four study areas:
1. CEFM System usefulness
2. The ability of CEFM to improve cargo visibility
3. The ability CEFM to improve supply chain and logistics performance
4. Assessment of deployment scalability
The evaluation involved analyzing test data collected during the deployment test, as well as perceptions from the various supply chain partners.
The quantitative benefits of CEFM data identified in this study area accrued primarily to the other partners in the supply chain rather than to the shipper. It should be emphasized that shipper benefits of improved data quality from CEFM-type data can only accrue if the data is integrated into the operations and existing systems at the company. CEFM would be good for small- to medium-sized shippers who have less supply chain sophistication.
One of the most important measures that the shipper uses on the supply chain is meeting a transit time standard. For the air supply chain from Hong Kong to Columbus, the transit time standard was 96 hours. During the six-month test period, the median transit time was 82.3 hours, which is a 14 percent drop compared to the standard transit time.
The following quantitative savings on labor costs were identified and calculated for the CEFM supply chain:
- Manufacturer data entry savings of 5 minutes per purchasing order.
- Hong Kong forwarder data entry savings for automating portions of the pre-alert (76 minutes per day).
- Columbus forwarder labor savings for reducing research to obtain airline data (28 minutes per day).
- Columbus container freight station (CFS) warehouse labor savings of $4 per error for less time spent researching missing data.
- Columbus CFS logistics staff labor savings of $3 per error for correcting electronic data interchange data
- Columbus shipper savings for reducing effort in monitoring priority shipments (27 minutes per day).
The estimated daily labor savings was $259. A total of 871 consignments were completed during the 180 days of the deployment test. This is equivalent to completing 48.3 consignments per day. Dividing $259 per day by the daily total shipment of 48.3 yields a per shipment savings of $5.94.
Author: K. Troup (North River), D. Newton (SAIC), M. Jensen (SAIC), C. Mitchell (SAIC), D. Stock (SAIC), M. Carter (SAIC), M. Wolfe (North River), and R. Schaefer (SAIC)
Published By: U.S. Department of Transportation, ITS Joint Program Office, Research and Innovative Technology Administration, 1200 Newe Jersey Ave. SE, Washington, D.C. 20590
See also, Public Roads Jan/Feb 2009 article by Randy Butler, http://www.tfhrc.gov/pubrds/ 09janfeb/06.htm "Electronic Freight Management"
Source Date: June 2008
EDL Number: 14442
Other Reference Number: DTFH61-02-C-00061URL: http://ntl.bts.gov/lib/31000/31500/31594/14442_files/14442.pdf
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