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Report Contents
	Introduction and Background Information
	Feasibility Study Solution - Option A
	Option C
	Anticipated Solution Costs
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This Regional Cargo Tracking System Business Plan is the result of consulting efforts sponsored by the U.S. Government's Agency for International Development (USAID). The principle beneficiaries of this plan are the regional stakeholders and their established Steering Committee.

1.1 Background

The East and Central African countries using the port of Mombasa, Kenya and Dar -Es-Salaam, Tanzania for their international trade face exceptional costs of transport. Areas of operation through the two ports have been categorized into regional transportation corridors with Mombasa being the principle port for the Northern Corridor and Dar-Es-Salaam for the Central Corridor. These countries, and particularly the most landlocked of them (Burundi, Rwanda, Uganda, Eastern DR Congo) would like to reduce the high costs of transportation of their exports and imports. Several factors contribute to high transportation costs, including the deficiency of information at various levels of users in the transport chain along the corridors.

Therefore, it is desirable that the stakeholders and other members of the regional supply chain community (transport operators, shippers and other corridor users) take advantage of the use of the new information technologies. In this regard, a Regional Cargo Tracking System (RCTS) could be useful to members of the Trade and Transport Community, as it would facilitate information exchange. Additionally, an RCTS solution could be a source of such information for policy makers and planners on various aspects and infrastructure development and future inter-governmental discussions.

Over the past few years, the Transit Transport Co-ordination Authority (TTCA) of the Northern Corridor has been evaluating the potential introduction of a Cargo Tracking system to facilitate trade, speed up transit movements and release capital tied up in high premium insurance rates. TTCA, in collaboration with the Port Management Association of Eastern and Southern Africa (PMAESA) and with the financial support of the Eastern Africa Sub-Regional Office (EA-SRO) of the Economic Commission for Africa (UN-ECA) has completed a Feasibility Study (the Study) for the implementation of regional cargo tracking systems for the Northern (Mombasa) and Central (Dar-Es-Salaam) transport corridors.

The Study findings and recommendations were presented to a stakeholders' workshop held in Nairobi, Kenya in October 2003. The stakeholders' workshop established a Technical Committee to further examine the user requirements, as well as the functional/system specifications, with a view to agreeing on a way forward for implementation and ongoing operations of an RCTS.

The Technical Committee agreed and finalized the system and functional specifications as well as a way forward. As part of the way forward, the Technical Committee called for the preparation of a business plan that will detail the implementation mechanisms, funding and sustainability of the corridor based tracking systems for the two corridors. The technical committee agreed that each corridor should implement independent centralized systems that would then be linked through an Internet portal (or another integration mechanism) to form a regional tracking system covering the two corridors.

1.2 Stakeholder Community

The participating stakeholders of the resulting RCTS are those entities who play a significant role in the movement of cargo along the supply chain within each corridor. It is envisioned that these stakeholders will be the major data contributors, or "data donators" providing consignment information populating the centralized databases of the RCTS. The envisioned stakeholder community includes:

• Customs Authorities
• Private Road Transport Companies
• Railway Companies
• Weighbridges
• Ports and Terminal Operators
• Inland Container Depots
• Governmental Partners
• Shippers
• Clearing and Forwarding Agents
• Shipping Lines

1.3 Committees

1.3.1 Steering Committee

Three organizations have jointly formed a steering committee to organize the facilitation of activities and communications relative to the RCTS with various stakeholder communities. The three primary organizations are:

• Transit Transport Coordination Authority of the Northern Corridor - TTCA
• Port Management Association of Eastern and Southern Africa - PMAESA
• United Nations Economic Commission for Africa (Eastern Africa Office) - UN-ECA

1.3.2 Technical Committee

A committee of technical representatives was organized with the responsibility of working in concert with the Steering Committee in providing technical information relative to existing stakeholder systems that are identified as potential data donators. Additionally, the Technical Committee was expected to review and accept the technical design elements to enable a smooth implementation of RCTS.

1.4 ECA Trade Hub

The U.S. Government's Trade for African Development and Enterprise (TRADE) Initiative seeks to mobilize U.S. and African partners from the public and private sectors to support specific trade capacity building needs. Three regional Global Competitiveness Hubs have been established in Accra, Ghana; Gaborone, Botswana; and Nairobi, Kenya. The TRADE Initiative has six themes:

• Enhance the competitiveness of African products and services;
• Expand the role that trade can play in African poverty reduction strategies;
• Promote U.S.- African business linkages;
• Improve the delivery of public services supporting trade;
• Strengthen African capacity for trade policy formulation and implementation;
• Strengthen the enabling environment for African businesses.

The Nairobi-based ECA Trade Hub has provided for the development of this business plan. It could also, if needed, provide further independent technical support to the RCTS implementation as those needs relate to broader trade and competitiveness issues.

1.5 USAID/ REDSO

The Regional Economic Development Services Office for East and Southern Africa (REDSO/ESA), which is based in Nairobi, Kenya, has provided the funding used to develop this RCTS Implementation and Business Plan. USAID/REDSO sponsored and funded the consultants' efforts through the ECA Trade Hub, and provided guidance to its focus and content.

1.6 Feasibility Study

Understanding that a cargo tracking system would facilitate information exchange and enhance efficiency along the two transport corridors, the UN-ECA, TTCA, and PMAESA, jointly carried out this feasibility study on a regional cargo tracking system.

Overall, the Feasibility Study, as agreed to by the stakeholder community, is a very comprehensive document that portrays the current system and business landscape and even provides additional insight to political situations and objectives of different stakeholder communities. The organization of the information is logical and is broken down into three volumes:

a. Volume I - Executive Summary

b. Volume II - Main Report

c. Volume III - System Specifications/Functional Specifications

The information contained throughout the documents is generally sufficient enough to affect a final design and begin development. As a significant part of the Business Plan Consulting Team's efforts, this report detailing a Regional Cargo Tracking System solution architecture contains a significant portion of the Study' technical information.

1.7 Scope of Business Plan Consulting Team Efforts

To further investigate and expand on insights and recommended approaches provided by the feasibility study, USAID/REDSO contracted technical consultants through the ECA Trade Hub. The consultants' performance was based on guidance provided through an agreed upon USAID/REDSO Statement of Work (SOW).

As guided by the SOW and subsequent discussions with USAID/REDSO, it is important to clearly define the intended use of this plan and highlight the limitations of the consultants' responsibilities in developing this plan.

It is noted that the Steering Committee did provide the consultants with a set of Terms of Reference (TOR) which in many cases, differed from the USAID/REDSO SOW. In many cases, the consultants were able to incorporate the essence of the TOR. However, several TOR terms requested analysis and effort beyond that of, or out of scope of the SOW. In these cases, the Consultant requested guidance from USAID/REDSO ECA Trade Hub and the Steering Committee and provided at a minimum, a methodology framework that the Steering Committee can use. An example is the evaluation of potential candidates for hosting the corridor-based or single centralized database.

As the evaluation and selection of the hosting service provider is not the responsibility of the consultants, the methodology walks through the activities and processes the Steering Committee should take to effect an appropriate result.

According to the SOW, in preparing this document, the Business Plan Consulting team was asked to address the following:

• Comments and recommendations on the Concept Paper prepared by the Cargo Tracking Technical Committee. A detailed concept paper has been developed to provide a clear picture of the way a cargo tracking system would operate along the Northern Corridor and identify the roles to be played by the different stakeholders and their responsibilities in implementing the System. The consultant will provide comments and recommendations on the concept paper.

• Provide a technical paper detailing the various types of Cargo Tracking Systems available. The consultant will identify the types of tracking systems that are available and give comments and make recommendations on the suitability of each type. In each case he will cost out the system to both install and maintain. The purpose of this will be to guide the stakeholders in the ways that the implementation can be funded and ways to meet the ongoing running costs.

• Provide a Business Plan. The consultant will prepare a costed business plan with a reasoned needs analysis and an implementation plan. The plan will clearly demonstrate the cost options that have been used in the Sub Saharan Region and make recommendations as to the preferred option for the Northern Corridor.

1.7.1 Relationship to the Feasibility Study

This Implementation and Business Plan is an independent analysis conducted by consultants through the ECA Trade Hub. The consultants were asked to review the Feasibility Study and use it as a source of information about the region's business and technical landscape. As this is a comprehensive document agreed upon by the Steering Committee, and containing the requisite technical information needed, the Feasibility Study has been the primary source for technical, business process, and other intangible details.

This document therefore should not be considered an annex to, a compliment to, or otherwise associated with the previously and independently developed Feasibility Study. The two documents are separate and distinct from one another.

In performing their analysis, the consultants used the feasibility study as the definition of the current state of information technology including details surrounding languages, protocols, business processes, strengths and weaknesses, as well as near term and long range stakeholder community plans.

1.7.2 Input from the Steering Committee

Several helpful discussions were held with various members of the Steering Committee. These discussions further explored the details surrounding needs and objectives, as well as individual stakeholder agendas and situations. This information was indeed pertinent in gaining an accurate portrait of the region.

1.7.3 Input from other Stakeholders

Independent of the information contained within the Feasibility Study, which interviewed a significant number of varied stakeholder representatives, soliciting mostly the same information that was needed, the consultants did entertain discussions with other stakeholders during our efforts. We undertook these discussions in parallel with other USAID/REDSO project efforts involving the same entities. Namely we solicited comments from:

• Kenya Revenue Authority,
• Uganda Revenue Authority,
• Uganda Railway Company,
• Agencies at the Kenya border (Immigration, Police, Health Dept…) and
• Agencies at the Uganda border (Immigration, Police, Health Dept…)

1.7.4 Use of this Regional Cargo Tracking System Implementation and Business Plan

This plan provides information that can be used by the Steering Committee and others to seek buy-in and commitment from the stakeholder community in order to move forward with implementation of a Regional Cargo Tracking System. USAID/REDSO, nor the ECA Trade Hub, nor the consultants will be implementing RCTS. The Steering Committee will select and approve an appropriate party to do so. This plan presents options that the Steering Committee can review, modify if necessary, select, and discuss with stakeholders to achieve a final go-forward position.

1.8 Resulting Objectives of the Regional Cargo Tracking System

An important item to note is that considered RCTS is NOT a transaction processing system. RCTS is based on cargo and transportation data as supplied by various donators and its primary business value is to aggregate data from different sources into a single view for those parties desiring this result, hence providing additional benefits to the stakeholders and acting as a supplement to the existing stakeholder information systems and business tools.

The availability of timely and relevant management information provided by the RCTS will be an important component to address the inefficiencies of the transport systems in the region. Namely:

• Efficient transport operations require proper planning at modal level (road and rail) and nodal level (ports, inland depots and border posts), which can only be achieved if the necessary information is available and used. RCTS will help to collect this data and provide it in a manner that is useable by the various intended users.

• Multimodal transport operations require the co-operation of several actors, which can only be achieved if a proper mechanism to facilitate exchange of information is available. RCTS will establish a more effective way of exchanging this information.

• Streamlining the documentation with a view to reduce delays requires the proper knowledge of the total time taken by the various nodes, in order to direct the efforts on the abnormal delays and assess the impact of the measures adopted. RCTS will provide visibility into the timeframes taken to accomplish various steps of each shipment. However, since RCTS is not a transaction processing system, status will be limited to a point in time at a pre-identified physical location.

1.8.1 Challenge Areas of the Program

Independent of securing suitable funding, the Business Plan Consulting Team sees the following areas that could present challenges to the successful implementation and use of the Regional Cargo Tracking System:

• Complex coordination of resources within the Stakeholder Community, Corridor Authorities, PMAESA, UN-ECA, and potential funding sources,
• Privacy considerations of data being collected,
• Lack of current infrastructure across all potential users,
• Perception of fairness,
• Uniformity of operation and
• Sustainability

Solid program management and open communications with all communities of interest will support minimizing the potential disruptions caused by the above elements.

The functional/system specification as identified in the Feasibility Study broadly spells out what the system should be able to do, as well as the desirable system architecture. However, there are specific issues to be addressed. These additional challenges include: data capture processes, integration issues, risks requiring contingency plans, and the adoption of perceived new or emerging technologies to address the question of missing links.

1.9 Organization of Business Plan

The Business Plan is the key outreach document to communicate to the Stakeholders, the envisioned ownership and operations of the Regional Cargo Tracking System, as well as provide a framework from which to align ongoing initiatives. This plan addresses the implementation mechanisms, rough order of funding magnitudes (ROM), and sustainability of the corridor based tracking systems for the two corridors and must be comprehensive to provide the mechanism for securing agreement and commitment from Stakeholders and the envisioned user community. The Business Plan will be comprised of the following key elements:

1. Introduction and Background
2. Participants and Legacy Systems
3. Solution Operational Concepts
4. Implementation
5. Overarching Business Considerations
6. Institutional Framework
7. Anticipated Costs
8. Funding Strategies

Through this Draft Implementation and Business Plan, the following questions will be addressed to the extent possible at this level of program maturity. In some cases, it is inappropriate to define specific activity level tasks and/or associated costs as many strategic Steering Committee decisions that impact those items have not been made. Similarly, associated implementation activities such as Business Process Reengineering, Technology Insertion Strategies, Organization Change Mobilization, as well as gaining agreement and commitment from the entire stakeholder community are left at the discretion of the steering committee. However this plan will attempt to provide some representative answers to these questions:

1. Who does what? - An assignment of responsibility for accomplishments associated with implementing a solution.
2. What is it that needs to be done? - A series of sequenced accomplishments performed by those identified as responsible.
3. How will it be done? - This question is difficult to completely answer without a complete system design or development plan.
4. What will be the cost? - Rough order of Magnitude (ROM) costs will be estimated.
5. How long would all that take? - An estimate of the amount of calendar time is provided.
6. How will the system be sustained? - A relatively thorough discussion is provided within the Institutional Framework portion of this document.

2 Participants and Legacy Systems

There are several types of organizations performing needed functions throughout the lifecycle of a consignment movement throughout the region.

2.1 Service Provider

In this hypothetical business model, the Service Provider role could be played by a number of organizations. These include terminal operators or, shipping companies, logistics companies, technology companies, or new ventures created solely to operate the network. Key success factors will likely include an international presence, detailed knowledge regarding the mechanics of international trade, and sufficient capital to build a robust, multi-port, multi-terminal network capable of capturing and making data accessible to the variety of stakeholder and envisioned users.

2.2 Shippers

Any company that ships consignments along both the Northern and Central Corridors could be a user of RCTS. Shippers would pay to place RFID tags on containers and monitor the containers' movements through the supply chain. Shippers would pay for the following value components:

• Improved visibility from better predictability and timeliness of cargo shipments,

• Cost avoidance related to emerging trade security measures,

• Reductions in safety stock and inventory carrying costs from improvements in trade compliance and in-transit visibility,

• Improvement in customer service to sales channels and resellers,

• Revenue increases from improved in-stock rates,

• Reductions of theft & pilferage incidents and direct costs.

During Development and Implementation, shippers should be motivated to implement RFID technology to track assets and consignments. This is especially true if the shipper manages the use of shipping containers used to transport cargo. Although it is not necessarily required for shippers to institute an entire RFID solution to their own operation, more up to date visibility into their consignments could provide numerous benefits.

2.3 Port and Terminal Operators

It is envisioned that Ports will most likely be an initiation point for establishing Master Consignment Records in RCTS (along with Customs and potentially shippers). Ports are the first participants in the consignment's movement in the corridor and will therefore be most likely responsible for associating consignments with their respective conveyance assets.

Those elements of the ports that maintain the PortTracker system components will be required to develop an electronic message that can be exported to RCTS modules residing on the PortTracker platform. Additionally, the Ports would be required to provide adequate memory to install and maintain the RCTS interface mechanisms on the ACIS platform. Ports will also be required to ensure there is Internet or other network connectivity in order for the RCTS modules to connect with the centralized system.

2.4 Trucking Companies

The companies that actually move the consignments from point to point potentially are likely the most impacted stakeholder type due to the number of potential data donation platforms (trucks). Several of the carriers in the region already subscribe to Global Positioning System (GPS) services that attempt to track consignments in-transit within the Corridors. The RCTS solution tracks consignments across a multi-modal environment and throughout the entire transportation process. Through Radio Frequency Identification technology (RFID), the location of assets owned or leased by a carrier can be managed independently and those assets involved with transporting a consignment can be related on a Master Consignment Record and tracked as a group. With the introduction of wide spread RFID technology, those Carriers competing solely on the basis of GPS-enabled services might lose some market power and, perhaps, pricing power. Additionally, if customers insist that the carriers only use transshipping points equipped with RFID technology, the carriers' operating flexibility would be further restrained. However, the benefit of inserting RFID technology into the region would enhance the overall control and management of consignments moving throughout.

2.5 Customs Authorities

Customs authorities throughout the region currently use a variety of independent systems to process consignments as they move across borders. While RCTS will not process consignments as part of normal transactions, RCTS will provide an avenue by which customs authorities can share information about consignments that are moving from one country to the other to verify consistency of the declared cargo data.

As opposed to the recommendations within the Feasibility Study, exchanging information will be accomplished, not by installing Data Collecting and Data Mapping software modules on each country's resident customs system platform, but through the exchange of formatted data files through available network or other means. There are two primary systems in use by customs authorities within the region. Most countries use, or will soon use ASYCUDA, while Kenya has been using Boffin but is in the process to converting it into a more open system, Gainde, being used in Senegal. Each authority will need to develop electronic data file messages (XML) within their independent systems.

2.6 Weighbridges

Weighbridges, relating to the RCTS context, can be considered consignment status update points that remain static (not mobile). The objective of RCTS relative to weighbridges is limited to establishing that in fact a consignment passed that location and at what time that occurred. As the MCR should be established within RCTS when a consignment passes a weighbridge, the need for extensive information related to the cargo can be minimized.

An effective approach to identifying that a consignment has passed a weighbridge is through radio frequency identification (RFID). RFID is quickly becoming widely used throughout the world as an effective and affordable method of tracking cargo and other assets. RFID 'tags' should be 'attached' to the container or the vehicle hauling the cargo. RFID tags are used to electronically identify assets such containers or trucks and are then associated with a specific consignment when that asset is used to transport the cargo. As a tag is attached, the tag identification number is recorded and included as part of the container or vehicle data set. As the RFID tag passes through or very near the weighbridge, a stationary electronic 'reader' picks up the signal from tag, and then transmits tag number, location, and data-time combination to RCTS.

The remote location of weighbridges and often their lack of connectivity present several challenges. As computerized networking using electrically powered equipment is the preferred method of integration, other alternatives exist such as cellular communications and solar power. Therefore, although weighbridges provide a logical location checkpoint, RFID technology offers the flexibility to establish checkpoints at the corridor's discretion.

2.7 Railways

RailTracker is widely used throughout the TRC network. It is operational on the KRC and the URC networks but it is not used to its full potential. Each railway corporation will be required to develop an electronic XML message capable of exporting requisite data sets to the RCTS modules residing on the same platform. As RailTracker receives an update in it's database, an associated XML message should be transmitted to RCTS.

Additionally, Railways could take advantage of new RFID technology for use in tracking rail wagons across the region. This would provide added visibility to those containers with RFID tags that are traversing the region. Of course this would require the installation of signpost readers at logical points along the railtracks.

2.8 Inland Container Depots

Inland Container Depots (ICDs) will not necessarily be networked to the RCTS if an RFID solution is implemented. Otherwise ICDs would have to be networked to capture the change in trucks if transshipped. If an overall RFID solution is adopted, readers and signposts could be installed in the ICD that would record what containers are currently located in the depot's area. This data, when transmitted to the RCTS will associate that container update with the Master Consignment Record, providing an updated status. A key issue that remains is how to address the removal and repacking of containers with potentially different cargo. This would require the installation of RCTS at the ICDs and manual input of updated consignment information. ICDs would have to be networked to close out the cargo tracking process so that containers and conveyances can be reused on other consignments.

2.9 Sub-Regional Organizations (SROs)

There are several Sub-Regional Organizations that can benefit from RCTS. The principle benefits are derived from an aggregation of traffic information and analysis to identify problem areas and potential bottlenecks. RCTS can provide this data in the form of management reports that can be used to help support an initiative designed to alleviate the problems, enhancing trade and transit in the area, thereby making their area more marketable.

3 Solution Operational Concepts

There are numerous possible technical solutions to meet the User Requirements as outlined in the Feasibility Study. Additionally, the technology is evolving at an extremely rapid pace and changes in availability and various vendor offerings have changed since this effort was undertaken.

3.1 Regional Business Process Concepts

As with the implementation of any business system, processes will be effected. It is most appropriate to have business process changes drive the decisions of IT system design. In the case of regional cargo tracking, new business processes are being developed that will execute the data sharing and status updates through the use of RCTS.

• A member of the regional cargo tracking system who first handles that particular consignment will enter the details of the consignment into the system. At this stage, the details will include as much information as can be made available to the system. A unique consignment code is generated for that consignment.

• Among the details entered in the above step will include details about the container number that the consignment has been stuffed into. If it is general cargo then these details will include the vehicle details (wagon/truck no.) on which the goods have been loaded. Another important detail to be captured should be the C63/COMESA-CD number for that particular consignment.

• Each stakeholder who handles the cargo thereafter will update the status of the consignment while it is en-route until it reaches its destination. These updates can be done by retrieving the consignment record using a number of possible "handles" and posting the updates. These updates will include as much details as can be possibly captured at that stage including any trans-shipment details.

3.1.1 Establishing a Master Consignment Record

Ports are the primary MCR establishers using data from shipping lines and shipping agents. Shipping lines or shipping agents may establish the MCR, but more than likely, the Ports or Customs will originate the system record. Therefore it will be necessary for Ports or Terminal Operators to create a data set for each different consignment coming through its jurisdiction, formatted in XML, and then export that data set to the installed Data Collecting module on the Port Community System platform.

In a solution where there is not a centralized database, an MCR will not be needed to associate disparate data. However, there must be some method of associated data within different systems. In this option, all stakeholders must agree on either a manifest or consignment identification that would be recognized within each system to be used as the primary key for further association.

3.1.2 Updating a Consignment Movement

There are a variety of methods of capturing the data associated with a physical location of a conveyance. For more simplified solutions (without RFID enabling), a physical read or inspection of the conveyance and accompanying information (manifest) is necessary. As stated in the Feasibility Study, this data, once read by human intervention, can be recorded in paper form for subsequent keying, or communicated via cell phone to a data entry function, highlighting the time and location of the read. For RFID enabled solutions, the system can attain a cargo tracking update through a series of signposts and readers that receive and transmit signals from the RFID tags. The way the system operates is essentially the same along either a rail route or a road route.

3.1.3 Closing a Consignment Movement

When a consignment has completed it's journey and has been delivered, an update to RCTS will be made. This update however will use a different set of codes to indicate the closing of the consignment movement, disassociate the consignment from the conveyance asset, and indicate that the conveyance asset is again available for another consignment. Most likely the shipper or importer will be responsible for updating RCTS with some type of movement closing update.

3.1.4 Application with Containerized Cargo

When a consignment is shipped within a container, the consignment information is associated with the unique Container ID. Through RFID enabled solutions, each container will begin to be recognized by the RFID tag installed on that container. As the container tag is read along the routes, the conveyance position will be updated, and therefore the associated consignment's position will be noted as well. Otherwise, with non-RFID enabled solutions, the original process applies with a manual recording either via direct keying into an RCTS terminal or communicating data via cell phone.

3.1.5 Application with Bulk Cargo

When consignments are shipped in bulk, a slightly different application of the cargo tracking technology must be used. The central idea behind tracking bulk cargo lies in the association of data to the conveyance. If it is known where the conveyance is at any given time, then the associated consignment should be at the same location. Therefore the truck or rail wagon status must be tracked.

This plan considered three optional solutions. These options differ primarily in level of technical complexity and to the degree in which future cargo tracking can be done automatically.

Non RFID Enabled:

• Option A - Basic information technology interfacing with common access at the presentation level (portal) but integration at the data level via the data donation exchange mechanism. This Option is the focus of the Feasibility Study and provides the primary solution definition for this effort. It is a realizable concept that the Consulting Team has modified to provide an alternative method of data interchange.

RFID Enabled:

• Option B - Increased incorporation of current physical tracking technology integrated with the IT architecture. This Option can be a workable solution in the ECA Region, but will require consistent commitment from those parties wishing to participate. The premise is based on tagging conveyance assets with electronic tags and seals to provide for easier, quicker, and more accurate reading of conveyance and cargo information. Option B is based on handheld, portable reading devices used by human intervention as the conveyance moves around the Region.

• Option C - Full breadth of automated physical tracking. This Option incorporates a full suite of RFID reading stations and more permanent hardware offering the capability to capture conveyance location while remaining in motion.

The table below highlights the core characteristics and key differentiators among the three options.