METHODOLOGY

Testing the EFM Prototype
In 2007, the USDOT Intelligent Transportation Systems (ITS) Joint Program Office funded and helped launch phase 2 of the EFM research, an operational test of the prototype to evaluate the system in a real-world, international air-freight supply chain. The Federal Highway Administration’s (FHWA) Office of Freight Management and Operations, in conjunction with the ITS Joint Program Office, conducted the 6-month test in partnership with Limited Brands, located in Columbus, OH, and its supply chain partners in Columbus and Hong Kong.

During this testing period, the ITS Joint Program Office tracked more than 850 completed freight consignments using the EFM technologies. Early conclusions from the prototype testing indicate that the EFM system improved freight tracking across the board.

Value of the EFM System
Phase 3's independent evaluation assessed a series of factors:

• System usefulness. Will the system allow for improved tracking of goods?
• Cargo visibility. Will government agencies find value in the improved visibility — obtaining information on the number of containers coming into their community in advance — so they can use the information to improve transportation planning, safety, and security?
• Supply chain and logistics performance. Will the system improve productivity? Will it help measure or forecast congestion and pollution reduction?
• Deployment and scalability. Are the standards appropriate and supportive of industry requirements? What are the costs and benefits? How well does the system work when expanded to include additional users?

The independent evaluators have conducted a rigorous analysis of the EFM test to validate the benefits and also have cross-tabulated findings from other industry survey organizations, such as Capgemini and Aberdeen, to support the overall findings.

• The benefits of this system will include the following:
  Value to businesses and related decisionmakers. Companies can set up the nonproprietary system for a fraction of the traditional cost of proprietary or customized tracking systems. Companies enhance their reputation for reliability, security, and just-in-time service. Carriers do not put trucks on the road until cargo arrival and clearance are assured. Costs go down, efficiencies improve, unnecessary truck trips are avoided, and competition increases.
• Rick DeShone, president of Codeworks, LLC, says, "EFM offers supply chain partners increased shipment visibility by producing real-time status information by as much as 48 hours over current systems in place. Once the infrastructure is in place, the cost of adding visibility for new partners is a fraction of the cost of traditional systems."
• Improved security. For companies that order goods from around the world, more reliable tracking and tighter transfer will improve security conditions for freight coming into the country from abroad.

FINDINGS
The test showed that the EFM system:

• Reduced total travel time from Hong Kong to Columbus, OH, from 96 hours to 82 hours (14 percent) within the 6-month test period.
• Saved 10 hours and $259 per day in labor costs across the entire supply chain by reducing paperwork (more than 75 percent per shipment).
• Improved data accuracy at the container freight station by 25 percent, reducing the number of office trips to verify data or fill data gaps. Reduced data entry errors by eliminating manual data entry by multiple partners and thus reducing rekeying errors.
• Customs brokers could process 18 percent more shipments per week, in part due to earlier document processing because of data availability. Earlier access to data would speed the processing time of a shipment by an average of 16 percent.

The system provided the supply chain partners with an efficient, secure, and reliable tracking system without requiring changes in existing business processes or purchase of new technologies or systems. EFM is not a new standalone system but is integrated into existing legacy systems.

• Value to the economy. Shorter duration and more reliable shipping will stimulate freight productivity and enhance transportation efficiency. The EFM system will produce improved security, transparency, and reliability for the Nation’s supply chain, and increased cost savings and competitiveness to individual businesses.

This report, dated January/February 2009, conveys the value that publically accessible electronic freight management systems can add to the optimization of intermodal freight operations. These findings along with the benefits provide a valuable resource to those considering the implementation of advanced technology for the optimization of intermodal freight logistics.