MASkargo has begun the first phase of its "six-pronged" E-commerce strategy with the implementation of e-Payment and invoicing for cargo via the Financial Process Exchange (FPX) gateway of Bank Negara.

Since June, MASkargo has been in collaboration with Deutsche Bank and Cargo Community Network (CCN) Pte Ltd, running a pilot project on an electronic bill presentment and payment system (EBPP) with four freight forwarders in Penang, namely Morrison Express, Trans Ocean Freight Services, UTI Worldwide (M) Sdn Bhd and H&M (M) Sdn Bhd.

"The FPX is a more flexible and secure gateway compared to traditional methods of payment," said Malaysia Airlines I.T. relationship manager (Cargo) David Chan.

"For the next few months, we will have a mix of FPX and the traditional cheque clearance methods."

"However by July 1, 2005, we will be looking at migrating everybody to this method of conducting transactions."

The FPX, which was conceived by Bank Negara more than two years ago, is an Internet-based electronic payment system entrusted to MEPS to manage and facilitate online payments for e-commerce transactions on a secure and multi-bank platform.

The invoices are sent electronically to the freight forwarders using the Electronic Payment and Invoicing for Cargo (EPIC) system operated by CCN. They are then uploaded through an interface to the db-eBill system of Deutsche Bank, which facilitates electronic bills settlement by freight forwarders to MASkargo via the FPX.

Users of the EBPP system can now retrieve and print invoices received from MASkargo, reconcile invoices against air waybill (AWB) records, dispute and/or make claims, view summary of bills and carry out payment preparation and authorisation as well as settlement of cargo bills.

MASkargo's "six-pronged" E-commerce strategy is as follows:

* To promote and implement usage of electronic business transactions
* To apply Internet technology to enhance global reach
* To set industry standards, operational policies & procedural requirements for specific E-commerce applications
* To standardise and transact end-to-end logistic processes on an integrated e-commerce platform
* To secure governmental ratification of Montreal Protocol 4 in implementing a paperless environment
* To enhance internal system functionality

"E-commerce is not the future. It is already here today. The logistics industry must ride on its wave in order not to be swept behind in the usage of technological advancements," said Chan.

He said the new electronic paperless system would have a significant impact on work productivity and cost reduction.

"There will definitely be a cost reduction involved as there will be a significantly smaller paper flow, meaning less man hours utilised for checking and validation."

"If we didn't have this electronic systems in place, our people would have to manually fill out around 1000 AWBs daily."

"Each AWB takes around 2-3 minutes to complete manually, and during peak periods the traffic is significantly increased, thereby escalating the chance of mistakes and incorrect data entry."

"However, with the electronic systems, there is heightened data security and integrity," he said.

However, said Chan, though they had gone paperless in Malaysia, in order to do it on an international scale, Malaysia would have to become a signatory to the Montreal Protocol 4.

"According to the protocol, a forwarder and an airline is allowed to trade electronically, without the issuance of a paper air waybill, instead using electronic storage systems to preserve a record of carriage."