Does the supply chain industry have room to maneuver to optimize work time, reduce its environmental impact and at the same time move in the direction of digital logistics?
Based on a proposal from the European Commission, the European Parliament and the Council of the European Union have approved the new EU Regulation 2020/1056 eFTI on Electronic Freight Transport Information on road and other routes, which will come into force in August 2024 and moves decisively in the direction of Logistics 4.0.
The European Commission estimates the benefits to be around €1.3 billion per year due to the reduction of administrative burdens, and foreshadows both economic and environmental benefits due to the large paper savings resulting from the digitization process of transport documents.
Member States will then have until August 2024 to create digital platforms for information exchange.
What does the new eFTI regulation say?
The eFTI Regulation 2020/1056 establishes a legal framework for economic operators to share information in electronic format with judicial authorities regarding the transport of goods by road, rail, inland waterway or air in the European Union. The regulation entered into force on August 20, 2020, and applies as of August 21, 2024.
This is intended to encourage the digitization of freight transport and related logistics in order to reduce administrative costs, improve enforcement capabilities of competent authorities, and enhance the efficiency and sustainability of road and other transport.
Interested economic operators will be able to make international transport-related documents available to competent authorities in electronic format, provided they use data processed on a certified eFTI platform.
Companies will have to comply with two main requirements:
- Make use of data processed on a certified eFTI platform and, if applicable, by a certified eFTI service provider;
- Make such data available in a format that can be read by either an automated device, via an authenticated and secured connection to the data source of an eFTI platform, or by humans, on the screen of the operator's electronic device.
The relevant authorities shall:
- Accept regulatory information made available in electronic format by economic operators;
- Accept regulatory information on waste shipments without the agreement in Regulation (EC) No. 1013/2006;
- Be able to electronically access and process eFTI data made available by operators;
- Provide official validation, such as a stamp or certificate, electronically.
“IeFTI Regulation 2020/1056 encourages digitization of freight transport and logistics, reduces administrative costs, improves efficiency and sustainability of road transport, and moves decisively in the direction of logistics 4.0”
Regulation 2020/1056: what benefits it can bring
The movement of goods, including waste, is accompanied by a large flow of information still exchanged in paper format between two or more companies or between companies and competent authorities. The use of paper documents is a significant administrative burden for logistics operators and an additional cost for logistics operators and related sectors (such as trade and manufacturing), particularly SMEs, and has a negative impact on the environment.
European Commission estimates point to economic benefits of up to €27 billion over the next 20 years, thanks to the reduction in administrative burdens made possible by setting up widespread digital logistics, resulting in savings of between 75 and 102 million man-hours per year1.
Shipping goods across EU borders and between transport modes is expected to become easier and cheaper. This could translate into faster delivery times and lower prices for consumers. For road and other route transport operators, operational cost savings would amount to about €12 billion over the period 2018-20402.
Positive environmental impacts are expected, in line with the results generally brought by logistics 4.0 best practices, due to the decrease in the modal share of road transport. In cumulative terms, CO2 emission savings are estimated to amount to more than 1,300 thousand tons over the 2018-2040 period, equivalent to 74 million euros in external cost savings. Congestion costs are expected to be reduced by nearly 300 million euros over the same period. In addition, no longer printing an average of 1-5 copies of each document per shipment would save about 2-8 billion sheets of paper, or the equivalent of 180-900 thousand trees per year3.
“European Commission estimates show benefits of up to €27 billion over the next 20 years”
Implementing the eFTI regulation: digitizing information and making it available
The European Commission will develop technical specifications for eFTI platforms by 2022. Member States will then have 30 months to establish digital logistics platforms for information exchange. By August 2024, road and other transport operators will be able to submit electronic information using a harmonized format in all EU member States.
The European Commission must adopt delegated or implementing acts no later than Feb. 21, 2023 in order to define the common datasets and eFTI subsets so that they reflect the regulatory information requirements, specify the definition and technical characteristics of each data element, and aim to ensure interoperability with relevant internationally accepted data models, in accordance with the Logistics 4.0 paradigm.
The eFTI platforms used to process regulatory data must provide functionalities to ensure that:
- Personal data is processed in accordance with data protection laws, maintaining confidentiality on business data;
- Competent authorities can access and process the data in accordance with the adopted specifications;
- Operators can make the information available to the competent authorities;
- A unique electronic identification link can be established between a shipment and its data elements;
- Data can be processed only on the basis of authorized and authenticated access;
- Data processing activities are recorded in records of operations;
- Data can be archived and remain accessible;
- Data are protected from damage and theft.
eFTI service providers must ensure that:
- Data are processed only by authorized users;
- Data are stored and remain accessible in accordance with European Union law and national law;
- Competent authorities have immediate access to regulatory information without charge or fees;
- Data are adequately protected from unauthorized or unlawful processing and from accidental loss, destruction, or damage.
“The Commission will adopt no later than August 21, 2023, the first implementing act covering these requirements for eFTI platforms and eFTI service providers.”
Conformity assessment bodies will be accredited by national accreditation bodies in EU member states to certify eFTI platforms and eFTI service providers.
Conclusions
With this Regulation, the European Commission will create a digital logistics environment for information exchange in road transport and other routes, replacing paper documentation in the sector. Moving toward the logistics 4.0 paradigm, focusing on sustainability and digitization, will bring economic and social benefits to all supply chain actors. All that remains is to work hard to disseminate the message that digital platforms can help an entire economic system reach a high level of technological maturity and capture all the benefits this brings.
Notes
1. European Commission Staff Working Document: Executive Summary of the Impact Assessment (SWD(2018) 184 final).Savings are calculated against a scenario in which no policy action is taken at the EU level.
2. Ibidem
3. Savings are calculated against a scenario in which no policy action is taken at the EU level.