Adobe Success Story

Dramatic reduction in errors
Historically, the port logistics and shipping industry has relied on error-prone, inefficient paper processes to manage its complex administrative process. However, increasing pressures from rising shipping volumes, expanding globalization, and more government and international regulation on importers and exporters are forcing the industry to find smarter ways of working.

Innovative port authorities, such as the Port of Hamburg, are leading the evolution towards more efficient business processes using automated document workflows. In cooperation with DAKOSY AG, a leading provider of IT services for the German transport and logistics sector, shipping professionals are automating documentation throughout the logistic supply chain, from producers to customers. DAKOSY has long recognized these challenges and has worked with leading port authorities and shipping companies to address the problems. Adobe LiveCycle solutions are instrumental in improving the critical processes.

The most significant challenges in the shipping supply chain focus on:

• The movement of goods is accelerating and modern containerized traffic can outrun the paper-based documentation, even if it is sent by fast courier services.
• Delays in moving freight from docks create inconveniences for freight forwarders, end customers, port authorities, and dockside freight handlers.
• Perishable goods transported in refrigerated containers create particular problems for shippers and port authorities when delayed.
• Increased standing time adds cost, and delays almost certainly result in dissatisfied customers.
• Businesses are increasingly reliant on dynamic, just-in-time inventories of goods. Streamlined shipping and customs processes can directly impact profitability.

Reducing labor costs by reducing error rework
In 1999, DAKOSY introduced an electronic interface for transmissions of Bills of Lading (B/L). While the initial introduction of the B/L offered significant progress in terms of speed and reduction in paperwork, there remained an element of paper form submittal and associated issues with quality of data collection. In fact, 50% of submitted B/L contained errors which often required a complete rework of the document. The most common errors were missing or incorrect data, ambiguous descriptions, and incorrect shipping details. Substantial amounts of staff time was used up in the error correction procedure adding significant delays to transportation times.

Each error requires forms to be faxed back to the customer, corrected, and then refaxed to the Port. Because the average freight forwarder submits between 10,000 and 40,000 B/L per year the ability to address this issue was challenging. In the spring of 2004, DAKOSY began searching for a way to take its investment in electronic documentation to the next level.

Benefits

• Achieved an almost 100% reduction in errors on shipping forms saving labor costs of €22.5 million per year
• Accelerated customs clearance for freight carriers
• Integrated front-end forms and processes with key back-end systems
• Reduced document processing costs for Port and for shipping companies
• Achieved compatibility with UN and UNECE standards

Project Details

Complex and diverse customer technical infrastructures and know-how
Although larger freight handlers have generally deployed their own sophisticated technical infrastructures, many of the smaller companies have yet to make this investment. DAKOSY’s solution needed to satisfy the huge range of customers and their diverse freight requirements. The solution had to be built in universally available software and be available at no- or low-cost to customers.

The complexity of the freight handled is diverse; shipments vary greatly in value, size, shape, how perishable, and handling sensitivity. Consequently, each producer or manufacturer tends to have its own specific needs and requirements. International trade also involves varying levels of risk for the parties involved. Non-repudiation authentication and encryption mechanisms are required for documents that often entitle legal ownership of goods in transit.

DAKOSY’s solution had to accommodate these diverse needs in the most effective manner possible to reduce delays and meet customer expectations simply, flexibly, quickly, and cost effectively.

Supporting compliant, predictable export clearance processes
After considering several solutions, DAKOSY selected Adobe LiveCycle software. Instrumental in this decision were the crucial features that the Adobe solution provided:

• Electronic documents in Adobe Portable Document Format (PDF) that exactly simulate paper-based documentation.
• Built-in business logic in document workflows, including support for electronic signatures, automated time restrictions and reminders, different permission levels, and automatic 2D barcode generation.
• Support for industry standards, such as XML, streamline the exchange of data to and from databases already in use by DAKOSY and its customers for processing customs clearance, audit, quality control, and archiving.
• The ability to quickly and easily update form templates in response to changes in requirement, new legislation, or procedural changes.
• Digital signature capabilities within Adobe PDF files that can provide document validation and signer authentication. Adobe PDF security features can provide document encryption, content protection, and document rights management.
• Adobe PDF documents that can be sent electronically, outpacing physical shipments and providing readily available shipping status and process data during transportation.

Adobe Professional Services worked with DAKOSY to roll out the automated forms project, called eDocs, at the end of 2004. eDocs has greatly simplified the export clearance process, giving customers the reassurance that their shipments, paperwork, compliance, and delivery schedules are predictable, handled professionally, and error-free. The innovative Adobe solution is built into the DAKOSY-Direct application portal, not only for the larger freight exporters but for all businesses that use Hamburg Port to export.

Huge labor and process cost savings revealed
Using eDocs, Dakosy’s customers could save €22.5 million simply by reducing labor costs associated with correcting errors. An average Dakosy customer will save 9 person years by reducing a typical error rate of 50% to virtually zero, assuming an average of 10 minutes of staff time required to correct each mistake in the paper-based process. Therefore, on one million B/Ls processed each year in Germany, this reduction in error rework equates to a savings of 450 person years per year. The €22.5 million savings assumes the average cost to employ a person in Germany is €50,000 annually.

eDocs delivers several other critical benefits to shippers and port authorities, including:

• Reducing errors on clearance documents; the error rate on more than 40,000 documents processed monthly dropped from 50% to almost zero.
• Saving substantial indirect costs by:
• reducing rework and errors
• faster transportation times
• fewer transit delays
• no lost paperwork
• increased customer satisfaction
• improved trust and confidence in the electronic process
• Expanding the adaptability and flexibility for the variety of freight forwarders using the Port of Hamburg thereby lowering the cost of entry for transportation companies.
• eDocs is compatible with the UNeDocs standard developed by Adobe in conjunction with the United Nations to standardize international trade documentation to reduce administration costs and increase security.

A proof of concept
With an increasing emphasis on security in international trade and reducing administrative burden, the UN has been undertaking developments to move the International Trade forms and documents from a paper format to an electronic version. Adobe has played a key role in this transition working with the UN on a proof of concept. (For more information go to http://www.unece.org/etrades/unedocs/referenceimplac.htm). As a result, the UN is now recommending Adobe solutions for trade documents. In addition, the United Nations Economic Commission for Europe (UNECE) is spearheading the use of similar solutions with governments, trade facilitators, and other UN commissions. The UNECE produced the first results from the UNeDocs in early 2003.

The Adobe proof of concept (PoC) is published on UNECE’s website and referenced by UN staff at various trade conferences for Governments in Geneva. Adobe was commissioned for this DAKOSY documentation project, for the Port of Hamburg.

Focus on higher value activities
For DAKOSY’s 1,300 customers, the solution provides electronic pre-populated forms that contain the customers’ standard data such as customer details, class of goods, and shipping schedule. It also provides appropriate data input field options through drop down lists that help maximize accuracy and reduce the time spent filling out forms.

For the Customs service, the eDocs system provides the required information to allow freight export clearance applications to be processed faster. For DAKOSY, eDocs provides management with data on export volumes, type of goods, and help in the tracking of freight. Updating eDocs is also now a much simpler process. For example, changing forms in response to new legislation is done in a single procedure within the portal.

More efficiency for all Port of Hamburg Exporters
The new eDocs system, created in cooperation with Adobe, has quickly become an accepted DAKOSY service, producing an intelligent, integrated document solution for all transportation, logistics and shipping tasks. The solution delivers a more efficient documentation system through process simplification, often combining previous multiple process steps into single transactions.

The service is universally available as a web application using Adobe Reader® software and is completely integrated with the existing EDI (Electronic Document Interface) System at the port of Hamburg.

The intelligent, electronic documents prevent users from submitting erroneous data, thanks to automatically pre-filled known data and built-in controls to manage answer types. Now, for instance, some freight and perishable shipments can be processed and cleared almost instantly and often in advance of the goods themselves arriving at Port.

Freight companies without sophisticated technical infrastructures can conduct all their export compliance work through a web browser using free Adobe Reader software, again contributing to lowering the cost of transaction for SMEs. Currently, more than 700 of DAKOSY’s customers have the ability to access eDocs through Application Service Providers (ASPs) to keep costs visible and ensure that they are always using the latest versions of eDocs forms.

A viable industry standard
As a consequence of the initial implementation the Adobe LiveCycle platform will be deployed as a common interface providing a consistent look and feel for customers facing touch points where forms are required.

Adobe continues to work with DAKOSY to automate additional forms processes. Electronic documents in various stages of development include:

• Export Declaration, Invoicing, and Supplier Confirmation—The Export Declaration is an eDoc solution. Forms are automatically filled with the correct customs tariffs for the type of product being shipped, the country of origin, and final destination. The electronic Export Declaration is to become compulsory within the EU on January 1st, 2008.
• Invoicing, billing, and supplier confirmation—Enhancements to the system are being scoped. These system extensions can be integrated into eDocs and will reuse core data to further improve efficiencies throughout the logistics supply chain.

  The system will also be able to pick-up additional data from the customer’s own database (XML standard) to further accelerate the process. Data stored in SAP, for example, can be integrated.

• Formal standardization for UNeDocs—UN/CEFACT (UN’s standardardization organization—UN Center for Trade Facilitation and Electronic Business) has started to move UNeDocs into a formal standardization process.

UNeDocs will become the base-standard for Aligned Trade Documents, such as the Single Administrative document from the EU, the Air Waybill from the International Air Transport Association (IATA) and the Bill of Lading from the International Maritime Organization (IMO). It is expected that the UNECE will open up more to other international organizations as well as industry through joint projects and public-private partnerships.

"Adobe’s software has enabled DAKOSY to optimize services to our customers by creating a fully integrated paperless solution for all the process steps in logistics and shipping," says Dirk Gladiator, head of EDI Services-Dakosy. "Our ability to consolidate customer, shipping, and goods data with regulatory requirements leads to comprehensive and accurate documentation from order to invoice. DAKOSY’s all electronic system will simplify the documentation process while minimizing errors. Our customers therefore obtain a high-quality, cost-effective solution and simultaneously minimize their administrative requirements."

For additional information on the UN’s project, visit http://unece.unog.ch/etrade/tk3.aspx for training materials and videos or http://unece.unog.ch/etrade/tkhome.aspx for a toolkit for creating trade documents.

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