U.S. Department of Transportation Federal Highway Administration

U.S. Department of Transportation • Federal Highway Administration

The Ele ctr onic Freight

Management Initiative
Quality Assurance Statement

The Federal Highway

Administration (FHWA) provides high-quality information

to serve Government, industry, and the public in a manner

that promotes public understanding. Standards and policies are used to ensure and

maximize the quality, objectivity, utility, and integrity of its

information. FHWA periodically reviews quality issues and

adjusts its programs and

processes to ensure continuous quality improvement.
The Electronic Freight

Management Initiative
The Electronic Freight

Management Initiative




6

capacity constraints, finding ways to improve the operational efficiency of moving this freight into, out of, and

throughout the United States is critical to our economic vitality. Freight movement, particularly international freight

movement, involves a complex set of parallel processes related to the exchange of information between multiple

entities (governmental and commercial) and the concomitant transfer of goods within and between modes of

transportation.

To better understand these exchanges and where potential opportunities exist for improvement, DOT worked

extensively with its private sector partners in the Intermodal Freight Technology Working

Group (IFTWG) to create a freight process map that illustrates the physical movement of a

container through a domestic supply chain along with its attendant information flow.

Evaluation of this freight process map with industry partners helped DOT determine that

the information transfer of a freight exchange is an area where improvements in speed,

accuracy, and visibility could result in large rewards for the freight transportation industry.

The EFM initiative directly targets that information exchange.

Information processing is key to business operations. Most large carriers and shippers use

electronic technologies to catalog and track cargo within their systems and to transmit

cargo information outside their systems to U.S. and foreign government agencies. Some

shippers also establish electronic inventory management systems with their largest suppliers and supply chain partners. However, not all businesses transfer shipment information

electronically to each other across an open supply chain. In fact, the majority does not

communicate electronically with all of their supply chain partners. In recent years, increasing competition and disruptions to the transportation network, such as the 2004 labor

strike at the Ports of Los Angeles and Long Beach and Hurricane Katrina, cause companies

to revisit their approaches to supply chain management, including the productivity of the

transportation system on which they rely. 

FedEx and UPS are two U.S. companies that use the electronic transfer of information to improve the productivity

of their supply chains. Because overall system productivity is a major concern for these two companies, the transfer

of information from origin to destination across modes is tightly scripted and very efficient, and each transaction is

viewed as an origin-to-destination pair.

EFM seeks to provide this same level of efficiency to a broader user community by way of an open system that provides information transfer opportunities similar to a closed system. The EFM team works directly with the freight

transportation industry to identify opportunities for implementing the EFM initiative. 

U.S. Department of Transportation Federal Highway Administration

INTERNATIONAL TRADE GROWTH

FACTS AND FIGURES:

• U.S. foreign trade rose

from $1.2 trillion to $2.6

trillion between 1990 and

2003

• Over the past two

decades, U.S. foreign trade

in goods by value has

quadrupled

• The volume of trade

moved on the U.S. transportation system is projected to increase 65 to 70

percent by 2020 from

1998 levels

SOURCE: U.S. Department of

Transportation, Federal Highway

Administration, Freight Facts and

Figures 2005, Washington,

DC:2005.
6

capacity constraints, finding ways to improve the operational efficiency of moving this freight into, out of, and

throughout the United States is critical to our economic vitality. Freight movement, particularly international freight

movement, involves a complex set of parallel processes related to the exchange of information between multiple

entities (governmental and commercial) and the concomitant transfer of goods within and between modes of

transportation.

To better understand these exchanges and where potential opportunities exist for improvement, DOT worked

extensively with its private sector partners in the Intermodal Freight Technology Working

Group (IFTWG) to create a freight process map that illustrates the physical movement of a

container through a domestic supply chain along with its attendant information flow.

Evaluation of this freight process map with industry partners helped DOT determine that

the information transfer of a freight exchange is an area where improvements in speed,

accuracy, and visibility could result in large rewards for the freight transportation industry.

The EFM initiative directly targets that information exchange.

Information processing is key to business operations. Most large carriers and shippers use

electronic technologies to catalog and track cargo within their systems and to transmit

cargo information outside their systems to U.S. and foreign government agencies. Some

shippers also establish electronic inventory management systems with their largest suppliers and supply chain partners. However, not all businesses transfer shipment information

electronically to each other across an open supply chain. In fact, the majority does not

communicate electronically with all of their supply chain partners. In recent years, increasing competition and disruptions to the transportation network, such as the 2004 labor

strike at the Ports of Los Angeles and Long Beach and Hurricane Katrina, cause companies

to revisit their approaches to supply chain management, including the productivity of the

transportation system on which they rely. 

FedEx and UPS are two U.S. companies that use the electronic transfer of information to improve the productivity

of their supply chains. Because overall system productivity is a major concern for these two companies, the transfer

of information from origin to destination across modes is tightly scripted and very efficient, and each transaction is

viewed as an origin-to-destination pair.

EFM seeks to provide this same level of efficiency to a broader user community by way of an open system that provides information transfer opportunities similar to a closed system. The EFM team works directly with the freight

transportation industry to identify opportunities for implementing the EFM initiative. 

U.S. Department of Transportation Federal Highway Administration

INTERNATIONAL TRADE GROWTH

FACTS AND FIGURES:

• U.S. foreign trade rose

from $1.2 trillion to $2.6

trillion between 1990 and

2003

• Over the past two

decades, U.S. foreign trade

in goods by value has

quadrupled

• The volume of trade

moved on the U.S. transportation system is projected to increase 65 to 70

percent by 2020 from

1998 levels

SOURCE: U.S. Department of

Transportation, Federal Highway

Administration, Freight Facts and

Figures 2005, Washington,

DC:2005.
8

The second project expanded the O’Hare project by leveraging the same security technologies to create a secure

multimodal electronic cargo manifest and provide for automated data transfer across transportation modes and

political jurisdictions. This project, called the Electronic Supply Chain Manifest,1

was sponsored by DOT’s

Intelligent Transportation Systems (ITS) Joint Program Office and managed by the Federal Highway Administration

(FHWA). The ITS Joint Program Office supports the overall advancement of ITS

through strategic investments in promising initiatives. Although the test

demonstrated some system integration issues, it did show estimated cost savings per transaction, based on a comparison of processing time and costs

between manual processing and test-specific transactions. In complete end-toend transactions, cost savings were shown to exceed $16.20 per transaction.2

Additional information regarding this project is described in the sidebar. 

The EFM initiative further expands the use of electronic data exchange through

an ongoing joint partnership with industry. Sponsored by DOT’s ITS Joint

Program Office, the initiative demonstrates the sharing of complete end-to-end

transaction information for Limited Brands, a U.S.- based apparel and personal

care items retailer, based in Columbus, Ohio, with its international supply chain

members. The initiative focuses on truck-air-truck supply chains. A demonstration test will be designed in 2006 and conducted and evaluated in 2007. The

goal is to design and evaluate a more complete system built on an SOA platform that incorporates Web services and data exchange standards. Using a single manufacturer’s supply chain, the research team manages and evaluates system inputs and outputs and incorporates freight data transaction standards to

support international efforts to standardize freight information and support

national freight policy.

U.S. Department of Transportation Federal Highway Administration

EFM Definition

The EFM initiative, whose goal is to extend mature technologies and standards to industry and government, is not

an entirely new concept. Many other organizations are involved in similar activities, and various elements of what

constitutes EFM are in development, demonstration, or production elsewhere. EFM is trying to accelerate and help

organize the e-business environment in transportation by: 

• Developing a specification for the use of Web services technologies and a true SOA as the means for exchanging information. 

PHASE II ELECTRONIC SUPPLY CHAIN MANIFEST

(ESCM) PROJECT FACTS AND FIGURES:

• $2.0 billion—potential annual ESCM

savings to industry

• 32—number of ESCM participants

• 3—types of supply chain participants— manufacturers, motor carriers, and airlines

• 81.8—percentage of participants who

said ESCM improved on their current

methods and could save time and

effort

• 91—percentage of participants who

said ESCM could allow for better or

easier scheduling of shipments under

a wide-scale deployment scenario

• 54—percentage of participants who

recommended developing a “critical

mass” of ESCM users to reduce or

eliminate the need for duplicate

efforts

• 100—percentage of participants who

indicated ESCM met or exceeded

their expectations

SOURCE: U.S. Department of Transportation,

Federal Highway Administration, Office of

Freight Management and Operations.

1

U.S. Department of Transportation, Electronic Intermodal Supply Chain Manifest, Freight ITS Operational Test Evaluation, Final Report, December 2002 

(http://www.itsdocs.fhwa.dot.gov//JPODOCS/REPTS_TE//13769.html).

2

This figure comprises two components: 1) measured cost savings based on data collected for the pick-up side of the supply chain ($11.77), and 2) estimated cost savings for the delivery side of the supply chain ($4.43).
8

The second project expanded the O’Hare project by leveraging the same security technologies to create a secure

multimodal electronic cargo manifest and provide for automated data transfer across transportation modes and

political jurisdictions. This project, called the Electronic Supply Chain Manifest,1

was sponsored by DOT’s

Intelligent Transportation Systems (ITS) Joint Program Office and managed by the Federal Highway Administration

(FHWA). The ITS Joint Program Office supports the overall advancement of ITS

through strategic investments in promising initiatives. Although the test

demonstrated some system integration issues, it did show estimated cost savings per transaction, based on a comparison of processing time and costs

between manual processing and test-specific transactions. In complete end-toend transactions, cost savings were shown to exceed $16.20 per transaction.2

Additional information regarding this project is described in the sidebar. 

The EFM initiative further expands the use of electronic data exchange through

an ongoing joint partnership with industry. Sponsored by DOT’s ITS Joint

Program Office, the initiative demonstrates the sharing of complete end-to-end

transaction information for Limited Brands, a U.S.- based apparel and personal

care items retailer, based in Columbus, Ohio, with its international supply chain

members. The initiative focuses on truck-air-truck supply chains. A demonstration test will be designed in 2006 and conducted and evaluated in 2007. The

goal is to design and evaluate a more complete system built on an SOA platform that incorporates Web services and data exchange standards. Using a single manufacturer’s supply chain, the research team manages and evaluates system inputs and outputs and incorporates freight data transaction standards to

support international efforts to standardize freight information and support

national freight policy.

U.S. Department of Transportation Federal Highway Administration

EFM Definition

The EFM initiative, whose goal is to extend mature technologies and standards to industry and government, is not

an entirely new concept. Many other organizations are involved in similar activities, and various elements of what

constitutes EFM are in development, demonstration, or production elsewhere. EFM is trying to accelerate and help

organize the e-business environment in transportation by: 

• Developing a specification for the use of Web services technologies and a true SOA as the means for exchanging information. 

PHASE II ELECTRONIC SUPPLY CHAIN MANIFEST

(ESCM) PROJECT FACTS AND FIGURES:

• $2.0 billion—potential annual ESCM

savings to industry

• 32—number of ESCM participants

• 3—types of supply chain participants— manufacturers, motor carriers, and airlines

• 81.8—percentage of participants who

said ESCM improved on their current

methods and could save time and

effort

• 91—percentage of participants who

said ESCM could allow for better or

easier scheduling of shipments under

a wide-scale deployment scenario

• 54—percentage of participants who

recommended developing a “critical

mass” of ESCM users to reduce or

eliminate the need for duplicate

efforts

• 100—percentage of participants who

indicated ESCM met or exceeded

their expectations

SOURCE: U.S. Department of Transportation,

Federal Highway Administration, Office of

Freight Management and Operations.

1

U.S. Department of Transportation, Electronic Intermodal Supply Chain Manifest, Freight ITS Operational Test Evaluation, Final Report, December 2002 

(http://www.itsdocs.fhwa.dot.gov//JPODOCS/REPTS_TE//13769.html).

2

This figure comprises two components: 1) measured cost savings based on data collected for the pick-up side of the supply chain ($11.77), and 2) estimated cost savings for the delivery side of the supply chain ($4.43).
10

The EFM must provide specific benefits for companies to be willing to adopt it. Given the fast-paced nature of supply chain management practices and the disparate nature of automated capabilities, it is unlikely that all potential

adopters of EFM would see the same level of cost savings. It is important to discuss other

types of potential benefits and, even more important, whether these benefits will attract

future adopters of EFM.

Potential benefits of adopting the EFM include:

• Improved efficiency in the supply chain, and potential cost savings

• Reduced paperwork associated with the movement of goods and related services

• Improved cycle times

• Reduced complexity to access information by authorized parties

• A view across the supply chain that provides full cargo and asset visibility and the ability

to identify opportunities for increased efficiencies and improved security.

Because these benefits are not exclusive to EFM, the value proposition must identify the

unique contributions of EFM. Commercial entities already have created and implemented tools similar in concept to EFM. FedEx and UPS, for example, have long deployed EFMlike capabilities for their internal supply chain management functions as well as for their

customers. In fact, these automated capabilities provide data to the government on international transactions and provide end users with a “single window” portal. However, as discussed earlier, these are

proprietary systems, and when UPS or FedEx go outside their system to communicate with potential partners they

may also need EFM capabilities.

In addition, EFM is based on an open architecture and is intended for use by all industries, whereas some commercially available products are industry specific, or specific to components of the supply chain. EFM is being designed

and developed as an industry and technology tool that can be used by all members of a given supply chain.

Instead of the point-to-point, well-defined information interactions between specific supply chain partners that are

the norm in today’s environment, an SOA approach fosters interactions among multiple partners. The SOA

approach also eliminates batch information exchanges and allows for real-time information exchange.

The extent to which partners along various supply chains can take advantage of EFM varies according to their level

of technological sophistication. Small- and medium-sized enterprises (SME) with rudimentary computing access

(for example, those companies with little more than personal computing platforms and browser access to the

World Wide Web) should be able to use EFM. 

U.S. Department of Transportation Federal Highway Administration

“The pressure is always on

reducing rates. Everyone is

looking for increased efficiency to get lower costs per

unit. The only way you can

stay profitable is to reduce

costs. One way to do that is

to minimize the huge manual

input of information.”

Jorge Estevez, Vice President of

Pricing and Yield Management,

Crowley Liner Services, “Oceans

Away,” Kathleen Reidy, Line 56,

December 2003.
10

The EFM must provide specific benefits for companies to be willing to adopt it. Given the fast-paced nature of supply chain management practices and the disparate nature of automated capabilities, it is unlikely that all potential

adopters of EFM would see the same level of cost savings. It is important to discuss other

types of potential benefits and, even more important, whether these benefits will attract

future adopters of EFM.

Potential benefits of adopting the EFM include:

• Improved efficiency in the supply chain, and potential cost savings

• Reduced paperwork associated with the movement of goods and related services

• Improved cycle times

• Reduced complexity to access information by authorized parties

• A view across the supply chain that provides full cargo and asset visibility and the ability

to identify opportunities for increased efficiencies and improved security.

Because these benefits are not exclusive to EFM, the value proposition must identify the

unique contributions of EFM. Commercial entities already have created and implemented tools similar in concept to EFM. FedEx and UPS, for example, have long deployed EFMlike capabilities for their internal supply chain management functions as well as for their

customers. In fact, these automated capabilities provide data to the government on international transactions and provide end users with a “single window” portal. However, as discussed earlier, these are

proprietary systems, and when UPS or FedEx go outside their system to communicate with potential partners they

may also need EFM capabilities.

In addition, EFM is based on an open architecture and is intended for use by all industries, whereas some commercially available products are industry specific, or specific to components of the supply chain. EFM is being designed

and developed as an industry and technology tool that can be used by all members of a given supply chain.

Instead of the point-to-point, well-defined information interactions between specific supply chain partners that are

the norm in today’s environment, an SOA approach fosters interactions among multiple partners. The SOA

approach also eliminates batch information exchanges and allows for real-time information exchange.

The extent to which partners along various supply chains can take advantage of EFM varies according to their level

of technological sophistication. Small- and medium-sized enterprises (SME) with rudimentary computing access

(for example, those companies with little more than personal computing platforms and browser access to the

World Wide Web) should be able to use EFM. 

U.S. Department of Transportation Federal Highway Administration

“The pressure is always on

reducing rates. Everyone is

looking for increased efficiency to get lower costs per

unit. The only way you can

stay profitable is to reduce

costs. One way to do that is

to minimize the huge manual

input of information.”

Jorge Estevez, Vice President of

Pricing and Yield Management,

Crowley Liner Services, “Oceans

Away,” Kathleen Reidy, Line 56,

December 2003.
interactions and streamline business processes. Web services are not hardwired connections, thus allowing supply chain partners to implement a

robust business service environment. SOA environments also provide businesses with an infrastructure that will be the building blocks for the development and integration of multiple supply chain applications. This feature will

allow supply chain partners to react to dynamic business conditions and

relationships and not experience a break in interaction. Even diverse technology assets can communicate with one another in an SOA environment.

Furthermore, Web services can be implemented incrementally and can

leverage existing information technology (IT) assets to attain both flexibility

for a quick build of new applications and reusability of technology investments. These applications work together to allow information to flow up and

down a specified supply chain, providing not only visibility of goods (either in

transit or in stock) but also timely communications and proactive notification of the status of exceptions.

Figure 1 shows the Publish–Subscribe–Discover model that is at the core of

SOA. Other important features of SOA technology include:

• Reusable technology and information that streamline operations

• Platform independent and standards-based services that can communicate with one another

• Loosely coupled services that minimize dependencies existing between 

systems

• Real-time data accessibility to increase business agility.

U.S. Department of Transportation Federal Highway Administration

BENEFITS AND IMPACTS OF A SERVICEORIENTED ARCHITECTURE:

• Implementation of IT as a business

process rather than a traditional

stovepipe application

• Reusability of IT assets

• Faster delivery cycles

• Openness and vendor independence

• Reduction in total cost of ownership

(TCO)

• Faster decision cycles

• Development using open technology

standards, such as those from the

World Wide Web Consortium (W3C) and

OASIS

• Easier interoperability with other systems or trading partners because of

SOA loose coupling

• Prevention of system change as a constraint on business change

• Greater enterprise agility and responsiveness to business needs

• Lower maintenance costs as a result of

fewer “instances” of a function and

fewer software licenses

• Ability to invoke a service over the web

without knowing or caring where the

service is physically hosted

SOURCE: Booz Allen Hamilton, 2005.

TECHNICAL BENEFITS OF SOA IMPLEMENTATION:

• 40–50-percent reduction in the number

of interfaces required

• 25–50-percent reduction in interface

development costs

• 50–75-percent reduction in interface

maintenance costs

• 50-percent reduction in costs associated with changes to customized displays

• 30-percent reduction in cost of changing underlying applications

• 33–50-percent savings through reduction of application instances due to

removal of redundant instances across

different business units

Source: Butler Group: “SOA Gathers Pace in

Enterprise Space,” June 2005.

12
interactions and streamline business processes. Web services are not hardwired connections, thus allowing supply chain partners to implement a

robust business service environment. SOA environments also provide businesses with an infrastructure that will be the building blocks for the development and integration of multiple supply chain applications. This feature will

allow supply chain partners to react to dynamic business conditions and

relationships and not experience a break in interaction. Even diverse technology assets can communicate with one another in an SOA environment.

Furthermore, Web services can be implemented incrementally and can

leverage existing information technology (IT) assets to attain both flexibility

for a quick build of new applications and reusability of technology investments. These applications work together to allow information to flow up and

down a specified supply chain, providing not only visibility of goods (either in

transit or in stock) but also timely communications and proactive notification of the status of exceptions.

Figure 1 shows the Publish–Subscribe–Discover model that is at the core of

SOA. Other important features of SOA technology include:

• Reusable technology and information that streamline operations

• Platform independent and standards-based services that can communicate with one another

• Loosely coupled services that minimize dependencies existing between 

systems

• Real-time data accessibility to increase business agility.

U.S. Department of Transportation Federal Highway Administration

BENEFITS AND IMPACTS OF A SERVICEORIENTED ARCHITECTURE:

• Implementation of IT as a business

process rather than a traditional

stovepipe application

• Reusability of IT assets

• Faster delivery cycles

• Openness and vendor independence

• Reduction in total cost of ownership

(TCO)

• Faster decision cycles

• Development using open technology

standards, such as those from the

World Wide Web Consortium (W3C) and

OASIS

• Easier interoperability with other systems or trading partners because of

SOA loose coupling

• Prevention of system change as a constraint on business change

• Greater enterprise agility and responsiveness to business needs

• Lower maintenance costs as a result of

fewer “instances” of a function and

fewer software licenses

• Ability to invoke a service over the web

without knowing or caring where the

service is physically hosted

SOURCE: Booz Allen Hamilton, 2005.

TECHNICAL BENEFITS OF SOA IMPLEMENTATION:

• 40–50-percent reduction in the number

of interfaces required

• 25–50-percent reduction in interface

development costs

• 50–75-percent reduction in interface

maintenance costs

• 50-percent reduction in costs associated with changes to customized displays

• 30-percent reduction in cost of changing underlying applications

• 33–50-percent savings through reduction of application instances due to

removal of redundant instances across

different business units

Source: Butler Group: “SOA Gathers Pace in

Enterprise Space,” June 2005.

12
These components will enable each organization to deploy tools, at its own pace, for retrieving data from other

supply chain partners and automatically populate needed forms.

A Business Process Perspective

DOT and its partners are not focused on business process changes in the EFM demonstration test. Ultimately, it is

up to the business community to change and standardize their business processes. However, as a subset of EFM

activity, process changes may need to be addressed as part of replacing paper with electronic information. In a

paper environment, human and other resources are dedicated to manually processing paper between entities. In

an electronic environment, humans and other resources are also dedicated to processing data, but the task is done electronically between entities. This eliminates

manual data entry. Instead of processing in a one-to-one environment, the task can

be done in a one-to-many environments. Data captured once can be shared by

many entities.

Thus, in the EFM environment, business process changes may be minimal, involving

adjustments in procedures to accommodate the replacement of paper with electrons. Or, it may be more complex, involving changes in business operating procedures that may be outmoded as a result of using a new technology.

Standards Development

The success of global supply chain partner communities (beyond regulated government environments) in implementing EFM concepts hinges on the successful definition and adoption of various standards published in open and accessible forums.

The EFM concept will leverage and influence several types of standards that are

evolving under different imperatives, such as data, message syntax, IT architecture,

and technology (discussed in the Technology Approach section). Because growth in

EFM deployment will likely be incremental, supply chain partners must have

defined standards to provide a common “language” to connect with other partners.

Standards are needed to guide the EFM initiative.

To illustrate this need, a hypothetical example of a supply chain, which involves a foreign consumer products manufacturer selling its product in the U.S. market, is presented in the sidebar on page 15. This example also demonstrates that the state of data standardization is best described as individual groups of partners, individual geographU.S. Department of Transportation Federal Highway Administration

“The main barrier to digital supply

chain collaboration is complexity

and high costs associated with

extensibility of business processes

throughout the network of suppliers

and customers. Business process

extensibility is the ability of an

enterprise to conduct digital collaboration with its partners, by extending processes throughout the supply chain to increase visibility and

streamline the information flow.”

“Successful Application of ServiceOriented Architecture Across the

Enterprise and Beyond,” Intel Technology

Journal, November 17, 2004.

14
These components will enable each organization to deploy tools, at its own pace, for retrieving data from other

supply chain partners and automatically populate needed forms.

A Business Process Perspective

DOT and its partners are not focused on business process changes in the EFM demonstration test. Ultimately, it is

up to the business community to change and standardize their business processes. However, as a subset of EFM

activity, process changes may need to be addressed as part of replacing paper with electronic information. In a

paper environment, human and other resources are dedicated to manually processing paper between entities. In

an electronic environment, humans and other resources are also dedicated to processing data, but the task is done electronically between entities. This eliminates

manual data entry. Instead of processing in a one-to-one environment, the task can

be done in a one-to-many environments. Data captured once can be shared by

many entities.

Thus, in the EFM environment, business process changes may be minimal, involving

adjustments in procedures to accommodate the replacement of paper with electrons. Or, it may be more complex, involving changes in business operating procedures that may be outmoded as a result of using a new technology.

Standards Development

The success of global supply chain partner communities (beyond regulated government environments) in implementing EFM concepts hinges on the successful definition and adoption of various standards published in open and accessible forums.

The EFM concept will leverage and influence several types of standards that are

evolving under different imperatives, such as data, message syntax, IT architecture,

and technology (discussed in the Technology Approach section). Because growth in

EFM deployment will likely be incremental, supply chain partners must have

defined standards to provide a common “language” to connect with other partners.

Standards are needed to guide the EFM initiative.

To illustrate this need, a hypothetical example of a supply chain, which involves a foreign consumer products manufacturer selling its product in the U.S. market, is presented in the sidebar on page 15. This example also demonstrates that the state of data standardization is best described as individual groups of partners, individual geographU.S. Department of Transportation Federal Highway Administration

“The main barrier to digital supply

chain collaboration is complexity

and high costs associated with

extensibility of business processes

throughout the network of suppliers

and customers. Business process

extensibility is the ability of an

enterprise to conduct digital collaboration with its partners, by extending processes throughout the supply chain to increase visibility and

streamline the information flow.”

“Successful Application of ServiceOriented Architecture Across the

Enterprise and Beyond,” Intel Technology

Journal, November 17, 2004.

14
16

EFM Demonstration Test

As previously mentioned, the EFM initiative is launching a demonstration test of component capabilities in 2007.

The U.S.-based retailer Limited Brands, a Fortune 250 company, is participating in the test on some of its air shipments from China to its distribution centers in Ohio. Figure 2 shows how this test contributes to the overall

advancement of the EFM concept.

The demonstration test, and the positive results achieved from it, will contribute to EFM’s overall vision. The test,

however, should not be expected to serve as the only source for constructing the vision nor should it limit the

potential scope of the vision. In addition, the test should not lose sight of overall EFM objectives, including stimulating freight productivity, developing international standards, enhancing transportation efficiency, and promoting supply chain security. Focusing on these objectives, supported by performance metrics demonstrating achievement of

these objectives, will also provide data to estimate investment returns.

U.S. Department of Transportation Federal Highway Administration

The test will demonstrate that Web services technologies built in an SOA environment will allow common sharing

of information between supply chain and government partners. For the demonstration test, the Web services SOA

will be referred to as the freight information highway (FIH), a mechanism for sharing supply chain freight information. The FIH will validate that XML translations used in the test will benefit users in the same manner as the data

they were using before the test. It will also alleviate any concerns about the security of shared data. 

Additional testing needs to focus on system capacity and the ability to handle ever-increasing amounts of data. The

relatively small number of transactions that will move through the system should allow the test to be operated in a

controlled state. In an uncontrolled industry-wide operation, the volume and flow of information will be more difficult to predict; thus, the system must demonstrate flexibility in processing information without disruptive effects.

Asia-to-U.S.

supply chain

One retail apparel buyer, with some 

generalizations to that industry segment

Truck-Air-Truck supply chain, with

partial involvement of Import Customs

Harmonized

Data

Standards

Applied

Messaging

Schemas

Related to One

Supply Chain

Web Services

Demonstration

Minimal

Business

Process

Change

Figure 2. Components of the EFM Test
16

EFM Demonstration Test

As previously mentioned, the EFM initiative is launching a demonstration test of component capabilities in 2007.

The U.S.-based retailer Limited Brands, a Fortune 250 company, is participating in the test on some of its air shipments from China to its distribution centers in Ohio. Figure 2 shows how this test contributes to the overall

advancement of the EFM concept.

The demonstration test, and the positive results achieved from it, will contribute to EFM’s overall vision. The test,

however, should not be expected to serve as the only source for constructing the vision nor should it limit the

potential scope of the vision. In addition, the test should not lose sight of overall EFM objectives, including stimulating freight productivity, developing international standards, enhancing transportation efficiency, and promoting supply chain security. Focusing on these objectives, supported by performance metrics demonstrating achievement of

these objectives, will also provide data to estimate investment returns.

U.S. Department of Transportation Federal Highway Administration

The test will demonstrate that Web services technologies built in an SOA environment will allow common sharing

of information between supply chain and government partners. For the demonstration test, the Web services SOA

will be referred to as the freight information highway (FIH), a mechanism for sharing supply chain freight information. The FIH will validate that XML translations used in the test will benefit users in the same manner as the data

they were using before the test. It will also alleviate any concerns about the security of shared data. 

Additional testing needs to focus on system capacity and the ability to handle ever-increasing amounts of data. The

relatively small number of transactions that will move through the system should allow the test to be operated in a

controlled state. In an uncontrolled industry-wide operation, the volume and flow of information will be more difficult to predict; thus, the system must demonstrate flexibility in processing information without disruptive effects.

Asia-to-U.S.

supply chain

One retail apparel buyer, with some 

generalizations to that industry segment

Truck-Air-Truck supply chain, with

partial involvement of Import Customs

Harmonized

Data

Standards

Applied

Messaging

Schemas

Related to One

Supply Chain

Web Services

Demonstration

Minimal

Business

Process

Change

Figure 2. Components of the EFM Test
18

sion and clarity. Through basic business rules, the filer responsible for sending currently required information to government agencies can establish

what entities receive the data and specify precisely what data are sent.

Response messages (for example, edit and validation messages) from government entities also could be routed back to the appropriate recipients as

designated by the filer.

A lack of effective information sharing leads to inefficiency, increased operating costs, congestion at cargo transfer points, errors in data transfer, and a

decrease in economic competitiveness. The federal role is clearing institutional barriers and demonstrating the way ahead through standardizing

datasets, building public-private partnerships that showcase operational improvements, identifying criteria that move the industry toward implementation of freight

technologies employed in EFM, and developing associated operational best practices. Although it is through the private sector that the EFM will be implemented,

governmental barriers must also be addressed, such as replacing paperwork now

required of the trucking industry with electronic data exchange when transferring

freight to an airline, through bills of lading, and so forth.

DOT perceives EFM as an initiative that could help advance its mission. For example, the Federal Motor Carrier Safety Administration (FMCSA) as a government

stakeholder could use the Web services feature of EFM or the FIH to facilitate paperless compliance with federal motor carrier safety regulations. With connectivity to

FMCSA’s Commercial Vehicle Information Systems and Networks (CVISN), EFM

could be used not only to track freight movement but also to determine whether a

vehicle assigned to move freight is unsafe. In particular, EFM could be used to check

a vehicle against a list of out-of-service vehicles or a list of vehicles cited for equipment violations. Checking would be performed before the freight is moved, saving

time and effort on the part of commercial vehicle enforcement officers as well as

the carrier and shipper. Dispatchers may have privileges to view such lists, be alerted to updates, and request changes, but not to change the list. Removing a vehicle

from service for safety reasons delays freight movement for hours, if not days. 

There is also a disconnect between private transportation data and FHWA infrastructure planning that places the government at a disadvantage in getting needed information to appropriately plan for infrastructure investments. FHWA is responsible for

ensuring that the nation’s highway network is adequate to handle current as well as

U.S. Department of Transportation Federal Highway Administration

CVISN inspector conducts a safety Inspection using a

wireless hand-held technology.

Source: FHWA

“This is a daunting challenge given

the number of traders in the global

supply chain, not to mention the

number of regulatory authorities

with an interest in the solution—

each, perhaps, with their own point

of view. I believe shippers, carriers,

and other supply chain partners

want to do everything necessary to

be secure and compliant, but they

will not invest in a solution unless

they are certain it will satisfy the

future requirements of regulatory

agencies. A consensus view on

requirements from U.S. Customs,

TSA, Homeland Security (and perhaps international authorities, since

this should be addressed with a

global perspective) will be an

important element of commercializing EFM as a long term solution.”

Michael Sherman, VP Logistics, Limited

Brands, DOT Air-Surface Cargo Security

and Productivity Forum, September 2003.
18

sion and clarity. Through basic business rules, the filer responsible for sending currently required information to government agencies can establish

what entities receive the data and specify precisely what data are sent.

Response messages (for example, edit and validation messages) from government entities also could be routed back to the appropriate recipients as

designated by the filer.

A lack of effective information sharing leads to inefficiency, increased operating costs, congestion at cargo transfer points, errors in data transfer, and a

decrease in economic competitiveness. The federal role is clearing institutional barriers and demonstrating the way ahead through standardizing

datasets, building public-private partnerships that showcase operational improvements, identifying criteria that move the industry toward implementation of freight

technologies employed in EFM, and developing associated operational best practices. Although it is through the private sector that the EFM will be implemented,

governmental barriers must also be addressed, such as replacing paperwork now

required of the trucking industry with electronic data exchange when transferring

freight to an airline, through bills of lading, and so forth.

DOT perceives EFM as an initiative that could help advance its mission. For example, the Federal Motor Carrier Safety Administration (FMCSA) as a government

stakeholder could use the Web services feature of EFM or the FIH to facilitate paperless compliance with federal motor carrier safety regulations. With connectivity to

FMCSA’s Commercial Vehicle Information Systems and Networks (CVISN), EFM

could be used not only to track freight movement but also to determine whether a

vehicle assigned to move freight is unsafe. In particular, EFM could be used to check

a vehicle against a list of out-of-service vehicles or a list of vehicles cited for equipment violations. Checking would be performed before the freight is moved, saving

time and effort on the part of commercial vehicle enforcement officers as well as

the carrier and shipper. Dispatchers may have privileges to view such lists, be alerted to updates, and request changes, but not to change the list. Removing a vehicle

from service for safety reasons delays freight movement for hours, if not days. 

There is also a disconnect between private transportation data and FHWA infrastructure planning that places the government at a disadvantage in getting needed information to appropriately plan for infrastructure investments. FHWA is responsible for

ensuring that the nation’s highway network is adequate to handle current as well as

U.S. Department of Transportation Federal Highway Administration

CVISN inspector conducts a safety Inspection using a

wireless hand-held technology.

Source: FHWA

“This is a daunting challenge given

the number of traders in the global

supply chain, not to mention the

number of regulatory authorities

with an interest in the solution—

each, perhaps, with their own point

of view. I believe shippers, carriers,

and other supply chain partners

want to do everything necessary to

be secure and compliant, but they

will not invest in a solution unless

they are certain it will satisfy the

future requirements of regulatory

agencies. A consensus view on

requirements from U.S. Customs,

TSA, Homeland Security (and perhaps international authorities, since

this should be addressed with a

global perspective) will be an

important element of commercializing EFM as a long term solution.”

Michael Sherman, VP Logistics, Limited

Brands, DOT Air-Surface Cargo Security

and Productivity Forum, September 2003.
20

Although EFM is being engineered to be robustly useful in intermodal supply chains and for organizations with

cross-modal activities, initial efforts are focused on line-haul segments involving air cargo movement. The air cargo

industry has invested significantly in electronic capabilities to support operations management functions with its

partners along its supply chains. These investments have been sponsored by individual carriers; ad hoc groups of

industry stakeholders, including carriers, asset-based integrators, and non-asset based forwarders; and formal working groups through the IATA (see sidebar). The initiatives featured use information technologies and supporting

process definitions to make the operations more efficient, particularly those of airlines and their primary operations partners, including forwarders and government authorities with which data is exchanged. These industry initiatives are generally adopted for competitive positioning, cost reduction, revenue

enhancement, and/or customer service.

For EFM concepts to be successfully adopted by the commercial sector, they must

harmonize with, and not disrupt, existing programs and initiatives (such as those

described in this section for the airfreight industry). There are several ways EFM can

do this for industry:

• Industry can bolster existing initiatives by adopting best practices that have been

derived from the EFM demonstration test. 

• Industry can take advantage of the standards being developed within EFM, given

that all efforts are being conducted in the open domain, and in conjunction with

open, public standards development and implementing organizations.

• Industry can choose to internalize portions or all of the EFM deployment test, perhaps testing or piloting initiatives in conjunction with internal development efforts.

• Industry can leverage EFM as a rallying point and demonstrate that the industry-wide benefits are possible.

EFM overcomes implementation barriers by not adversely affecting investments in proprietary or other legacy systems that commercial concerns use to operate their businesses. There are some unknowns as to the connection

methods, but the test should help identify the various ways that businesses can interact with web services and

other business partners.

U.S. Department of Transportation Federal Highway Administration

“Communicating with airlines is a

challenge. The underlying problem

is that no single system or thirdparty portal allows us to communicate with all our airline partners.”

Chris Coppersmith, President and CEO

Target Logistics Services, quoted in

CargoVision, December 2004.
20

Although EFM is being engineered to be robustly useful in intermodal supply chains and for organizations with

cross-modal activities, initial efforts are focused on line-haul segments involving air cargo movement. The air cargo

industry has invested significantly in electronic capabilities to support operations management functions with its

partners along its supply chains. These investments have been sponsored by individual carriers; ad hoc groups of

industry stakeholders, including carriers, asset-based integrators, and non-asset based forwarders; and formal working groups through the IATA (see sidebar). The initiatives featured use information technologies and supporting

process definitions to make the operations more efficient, particularly those of airlines and their primary operations partners, including forwarders and government authorities with which data is exchanged. These industry initiatives are generally adopted for competitive positioning, cost reduction, revenue

enhancement, and/or customer service.

For EFM concepts to be successfully adopted by the commercial sector, they must

harmonize with, and not disrupt, existing programs and initiatives (such as those

described in this section for the airfreight industry). There are several ways EFM can

do this for industry:

• Industry can bolster existing initiatives by adopting best practices that have been

derived from the EFM demonstration test. 

• Industry can take advantage of the standards being developed within EFM, given

that all efforts are being conducted in the open domain, and in conjunction with

open, public standards development and implementing organizations.

• Industry can choose to internalize portions or all of the EFM deployment test, perhaps testing or piloting initiatives in conjunction with internal development efforts.

• Industry can leverage EFM as a rallying point and demonstrate that the industry-wide benefits are possible.

EFM overcomes implementation barriers by not adversely affecting investments in proprietary or other legacy systems that commercial concerns use to operate their businesses. There are some unknowns as to the connection

methods, but the test should help identify the various ways that businesses can interact with web services and

other business partners.

U.S. Department of Transportation Federal Highway Administration

“Communicating with airlines is a

challenge. The underlying problem

is that no single system or thirdparty portal allows us to communicate with all our airline partners.”

Chris Coppersmith, President and CEO

Target Logistics Services, quoted in

CargoVision, December 2004.
20

element in the process of preparing business plans and budgets. Part of the awareness process will include sharing

documentation on the EFM concept of operation and detail design. Following the awareness activity, FHWA will

share implementation guidance documentation, developed as part of the demonstration test, to facilitate the rollout of EFM. Industries with a strong interest in reviewing implementation guidance in other air cargo supply chains

are likely candidates for adoption of EFM’s best practices. FHWA is also willing to support industry as it moves forward to adopt best practices. This collaboration between government and industry could enable the ready adoption of EFM information transfer techniques and could signify a fundamental change in how intermodal freight

would be handled domestically and globally in the future.

Successful adoption of EFM best practices in air cargo supply chains may be a catalyst for their adoption in other

modes of transportation, such as water and rail. FHWA will use assessment measures, such as industry focus

groups, to determine the practicality of expanding demonstration tests to other modes. These assessments will be

done in 2007 and 2008. •

U.S. Department of Transportation Federal Highway Administration

22
20

element in the process of preparing business plans and budgets. Part of the awareness process will include sharing

documentation on the EFM concept of operation and detail design. Following the awareness activity, FHWA will

share implementation guidance documentation, developed as part of the demonstration test, to facilitate the rollout of EFM. Industries with a strong interest in reviewing implementation guidance in other air cargo supply chains

are likely candidates for adoption of EFM’s best practices. FHWA is also willing to support industry as it moves forward to adopt best practices. This collaboration between government and industry could enable the ready adoption of EFM information transfer techniques and could signify a fundamental change in how intermodal freight

would be handled domestically and globally in the future.

Successful adoption of EFM best practices in air cargo supply chains may be a catalyst for their adoption in other

modes of transportation, such as water and rail. FHWA will use assessment measures, such as industry focus

groups, to determine the practicality of expanding demonstration tests to other modes. These assessments will be

done in 2007 and 2008. •

U.S. Department of Transportation Federal Highway Administration

22
U.S. Department of Transportation Federal Highway Administration

Technical Report Documentation Page

1. Report No. 2. Government Accession No. 3. Recipient’s Catalog No.

FHWA-HOP-06-085

4. Title and Subtitle 5. Report Date

The Electronic Freight Management Initiative April 2006

6. Performing Organization Code

7. Author(s) 8. Performing Organization Report No.

David Fitzpatrick and Daniel Dreyfus, Booz Allen Hamilton

Michael Onder and Joanne Sedor, FHWA

9. Performing Organization Name and Address 10. Work Unit No. (TRAIS)

Booz Allen Hamilton

8283 Greensboro Drive, McLean, VA 22102-3838

11. Contract or Grant No. 12. Sponsoring Agency Name and Address

U.S. Department of Transportation

Federal Highway Administration

Office of Freight Management and Operations and 

ITS Joint Program Office

400 7th Street, SW, Washington, DC 20590

13. Type of Report and Period Covered 14. Sponsoring Agency Code 15. Supplementary Notes

16. Abstract

This report discusses the Electronic Freight Management initiative, a U.S. Department of Transportation (DOT) sponsored research effort that

partners with industry to improve the operating efficiencies, safety, and security of goods movement. The EFM initiative uses Web technologies 

to improve data and message transmissions and facilitate business transactions among supply chain partners. A service-oriented architecture 

leverages the Web technologies and supports them by setting data standards. 

The potential benefits of using Web technologies include 1) improving shipment visibility throughout the supply chain, 2) reducing the amount 

of repetitive data entry required, 3) augmenting the diagnostic tracking abilities that come from greater supply chain visibility, 4) simplifying

interfaces with government agencies, and 5) providing additional data on shipment status that can make supply chains more secure. A serviceoriented architecture leverages Web technologies

The paper provides the context for developing the EFM initiative and describes its approach, components, and products. It also discusses the 

benefits of using EFM concepts and the importance of adopting data standards to improve communication among supply chain partners. The

paper identifies opportunities for implementation in both the private and public sectors and discusses approaches to achieve broad adoption.

17. Key Word 18. Distribution Statement

electronic freight management, Web technologies, service-oriented architecture, 

supply chain, intelligent transportation systems, electronic data exchange, data standards

19. Security Classif. (of this report) 20. Security Classif. (of this page) 21. No. of Pages 22. Price

Unclassified Unclassified 24

Form DOT F 1700.7 (8-72) Reproduction of completed page authorized
U.S. Department of Transportation Federal Highway Administration

Technical Report Documentation Page

1. Report No. 2. Government Accession No. 3. Recipient’s Catalog No.

FHWA-HOP-06-085

4. Title and Subtitle 5. Report Date

The Electronic Freight Management Initiative April 2006

6. Performing Organization Code

7. Author(s) 8. Performing Organization Report No.

David Fitzpatrick and Daniel Dreyfus, Booz Allen Hamilton

Michael Onder and Joanne Sedor, FHWA

9. Performing Organization Name and Address 10. Work Unit No. (TRAIS)

Booz Allen Hamilton

8283 Greensboro Drive, McLean, VA 22102-3838

11. Contract or Grant No. 12. Sponsoring Agency Name and Address

U.S. Department of Transportation

Federal Highway Administration

Office of Freight Management and Operations and 

ITS Joint Program Office

400 7th Street, SW, Washington, DC 20590

13. Type of Report and Period Covered 14. Sponsoring Agency Code 15. Supplementary Notes

16. Abstract

This report discusses the Electronic Freight Management initiative, a U.S. Department of Transportation (DOT) sponsored research effort that

partners with industry to improve the operating efficiencies, safety, and security of goods movement. The EFM initiative uses Web technologies 

to improve data and message transmissions and facilitate business transactions among supply chain partners. A service-oriented architecture 

leverages the Web technologies and supports them by setting data standards. 

The potential benefits of using Web technologies include 1) improving shipment visibility throughout the supply chain, 2) reducing the amount 

of repetitive data entry required, 3) augmenting the diagnostic tracking abilities that come from greater supply chain visibility, 4) simplifying

interfaces with government agencies, and 5) providing additional data on shipment status that can make supply chains more secure. A serviceoriented architecture leverages Web technologies

The paper provides the context for developing the EFM initiative and describes its approach, components, and products. It also discusses the 

benefits of using EFM concepts and the importance of adopting data standards to improve communication among supply chain partners. The

paper identifies opportunities for implementation in both the private and public sectors and discusses approaches to achieve broad adoption.

17. Key Word 18. Distribution Statement

electronic freight management, Web technologies, service-oriented architecture, 

supply chain, intelligent transportation systems, electronic data exchange, data standards

19. Security Classif. (of this report) 20. Security Classif. (of this page) 21. No. of Pages 22. Price

Unclassified Unclassified 24

Form DOT F 1700.7 (8-72) Reproduction of completed page authorized

U.S. Department of Transportation

Federal Highway Administration

Office of Freight Management and Operations

400 Seventh Street, SW

Washington, DC 20590

Phone: 202-366-9210

Fax: 202-366-3302

Web site: http://www.ops.fhwa.dot.gov/freight

U.S. Department of Transportation

Federal Highway Administration

ITS Joint Program Office

400 Seventh Street, SW

Washington, DC 20590

Phone: 202-366-2742

Fax: 202-493-2027

Web site: http://www.its.dot.gov

April 2006

FHWA-HOP-05-085

EDL 14246