Role of ICT in Trade Facilitation

Report
ICT in Trade Facilitation:
Expediting Cargo Movement & Customs Clearance
February 2014
The Trident Group, LLC
Imperative for Action:
Sub-Saharan Africa could boost its annual GDP by $15 billion
if time spent in Customs clearance is cut by 50%.
Additional $20 billion could be realized each year by
improving transport infrastructure, getting goods into/out ports
in half the time it currently takes.
If implemented, the combined effect would be even larger.
Source: International Trade Centre (ITC)
Inefficiencies in the Supply Chain:
Entry/Exit Points:
• High incidence of physical inspection by Customs
(limited data to support admissibility decisions )
+ Seaports
+ Airports
+ Borders
• Poor cargo arrival, discharge & release planning
• Manual handling of import/export processes
• Limited regional cooperation & border mngmt
Inland
Transportation &
Logistic Systems
• Inadequate transport network... poor state where
exist (road, rail, waterways)
• Poor cargo & asset transit monitoring
• Underdeveloped regional transport corridors
• Transportation providers are not well organized
Regulatory
Environment &
Compliance
• Inadequate/inconsistent policy regime (e.g. ETLS)
• Limited enforcement of trade regulations/practices
• High incidence of sharp practices & non-compliance
Enablers: Factors & Impact
Rate of
Change
Community
Fast
Technology
Governance
Governance
Economy
Existing
Trade & Infrastructure
Logistics
Organization
Environment
Environment
Policy
Infrastructure
Adapted from: “Understanding Smart Cities: A Integrative Framework,” Chourabi, et al. (2012)
Surging
Slow
Improving Trade & Logistic Efficiency
…one component at a time
Electronic Exchanges (Single Window)
• Port Community System
• Cargo Community System
Freight Traffic Management System
• Truck Control System
• Inland Transport/Corridor Management
+ Process Trade Documents
+ Improve Visibility
+ Improve Trade Services
+ Eliminate Congestion
+ Manage & Control Assets
+ Manage, Track Cargo Movement
Risk Targeting & Import Compliance Systems
+ Improve Security
• Customs Screening System
• Transit Access Monitoring
+ Enhance Import Compliance
+ Expedite Trade & Cargo
Clearance
Freight Traffic Management:
Port Access Control: Congestion Mitigation
Truck Parking, Gating & Movement Systems
Cargo Movement: Transit Tracking & Monitoring
Border Transit & Regional Corridor Management
Infrastructure Realities:
NAFITH : National Freight Information & Transportation Hub
 Began operation in late 2005
 Proven intermodal solution designed to optimize landside
movement of cargo to/from ports and border crossings
 Enable port to “organize the chaos” around terminals & port gates
– creating a more efficient movement of cargo
 Interfaced with Customs, Terminals, Ministry of Transport etc
 TCS now mission-critical for logistics and trade communities
 The Freight Traffic Management System leverages the available
information from multiple port stakeholders to:




Capture cargo status & truck movements/schedules
Perform validations for logistic data
Automate decisions such as truck dispatch & terminal access
Provide cargo tracking & chain-of-custody
 Capital investment $20m; annual operating cost $4m
 Operated under a PPP Agreement with ASEZA
Port Access & Border Transit Control System (Jordan)
 Manages 24-hour freight transport operations for
ports, terminals & Free Trade Zone
 Controls movement of trucks from 5 entry points
on road network reaching 39 specific destinations
including 13 terminals
 Over 200 trucking companies and more than
15,000 trucks use the system daily
 Several truck parks with capacities varying from
150 to 500 trucks
 Thousands of concurrent users requesting permits
& receive instructions from the system
 Extends use of existing infrastructure at terminals
(APM) & other destinations incorporated into TCS
 Uses low-cost RFID/GPS to collect data & monitor
truck/rail movement
 Improved regional border transit & monitoring
through document harmonization: Jordan-Syria,
Jordan-Saudi, Iraq-Kuwait
‫ساحة رقم (!) الرابية‬
‫) الخروج‬4( ‫ساحة رقم‬
‫)الرئيسية‬2( ‫ساحة رقم‬
‫)الجنوبية‬3( ‫ساحة رقم‬
Stakeholder Integration & Information Exchange
Trucking
Companies
Ministry of
Transport
1
• Provide registry of trucks
and trailers by company
and cargo type (XML)
Jordan
Customs
(ASYCUDA)
2
3
• Provide other releases
for cargo pickup, e.g.
fuel, bulk
4
Truck Drivers
Nafith TCS
7
• Provide Cargo releases
(XML)
ASEZA
• Apply for permits
(equipment, cargo,
operation, route,
driver, and other data)
• Receive approval
5
• Validate data
• Approve permits
• Capture events
• Manage capacity
• Provide reporting
and alerts
• Support invoicing
Container
Terminal
Operators
• Use TCS to validate &
schedule container
pickup operations
• Receives entry ticket
from trucking company
• Receive permit with all
details on operation
Gate
Operations
8
• Oversee movement of
trucks through ASEZ
• Receive instructions
from TCS
• Provide event data to
TCS
6
NAFITH: Efficiency Gains
Improved Efficiency/Productivity:
 Eliminate congesting around port, terminals & access roads
 Minimizing wait times for trucks and drivers
 Increased truck turns and cargo carried/truck/year
 Increased rail asset utilization
 Reduced pollution and wasted diesel
Better Managed Activities:
 Providing terminal and yard operators with advanced information on planned
and in-progress truck/rail operations
 Providing freight forwarders with better information on cargo delivery status
Better use of Limited Infrastructure
 Spread loads over time
 Push sources of delay and chaos away from congestion
 Monitor operations & react to unexpected delays/emergencies
Increased Logistic Visibility & Data Collection:
 Extend control and visibility for public and private stakeholders
 Capture detailed operational data to support planning, investment & policy
actions
TCS Operational Schema
Trucking
Company
Management
Trucking
Company
Dispatchers
Truck/cargo status
Billing/payment info
Government of
Jordan
Regulatory
compliance
and status
reports
INTERNET
TCS IT Platform
Request entry & route
NXFTMS™
Return Permit Number
Verify truck, driver,
route, cargo
Provide
Permit
Number
Provide paper permit with
routing instructions
Track truck
enroute &
waiting yards
Record
cargo
pickup at
terminal
Record
truck exit
Truck Park
Entry / Exit Control
Worked in a Developing Economy:
 Significant infrastructure deficit
 Many users had no prior IT experience
 Limited/sometimes unreliable communication & internet
service
 No comparable system in use
 Measurable productivity & investment returns for trade &
transport sectors
 Multiple stakeholders benefited
Video
Case Study: Common Consignment Note
 A customs transit document which can be issued electronically or on paper.
 Example of a regional trade facilitation agreement in action.
 Information required for transit and receiver countries are included on the
common consignment note when issued at origin.
 Successful pilot of transcontinental rail freight shipment from China to
Germany – 11,000KM distance in 18 days.
 Time spent at border crossings can be significantly reduced with
corresponding reduction in transport cost.
 Idea can be extended to ECOWAS leveraging the successful regional
transit corridor model in the Middle East.
NAFITH: Enhancements
NAFITH has developed new services around the core process for TCS;
 Dispatching for oil tankers, ferry and other distinct transport operations
 Logistics management for bulk cargo, grains discharge and delivery
 Electronic marketplaces for truck freight to and from terminals
 Empty container management framework
 Integration with Weighbridge for axle weight enforcement
 Integrated vehicle & cargo tracking services with virtual routing using
mapping & location based services (LBS)
 Mobile interfaces using customized cell phone apps
 E-Payment & E-Waybill services
 Expanding operations to Kuwait and Iraqi ports and border crossing for
grain movement
Trade Information Gateway, Real-Time Exchange: Pakistan
Initial areas of focus:

Karachi Ports access
control

International transit
corridor management
(Afghan-Pakistan)

Electronic marketplaces
for truck freight to/from
terminals

Nationwide databases
of registered equipment,
drivers and companies

Integrated vehicle and
load tracking services
with virtual routing
management

Mobile interfaces using
customized cell phone
applications
Risk Targeting, Risk Profiling & Screening
for Import Compliance
 Facilitate Trade & Expedite Import Clearance
 Increase Revenue Through Better Valuation
 Detect Import Violations & Misdeclarations
 Improve Security to support WCO- Safe Framework
Automated Risk Targeting & Import Screening
• Risk Targeting Solution (RTS) automates the processes needed to
objectively evaluate risks, vulnerabilities, threats, assumptions and
uncertainties about cargoes arriving at our ports and borders
• Provides Customs agencies at Ports (Sea & Air) & Border Crossings
with ACTIONABLE information used in determining which cargo
should be manually inspected or cleared. The RTS is designed to
provide inspectors with uniform, actionable information needed to:
• Facilitate Trade & Expedite
import clearance by reducing
manual inspection (dwell-time)
• Improve the detection of
declaration fraud and import
violations
• Increase volume of products
reaching markets at lower cost
• Improve Security through
enhanced threat/vulnerability
assessment capability to
support the WCO Safe
Framework
• Improve Revenue through
enhanced valuation
RTS – Applicability
to Customs
Operational
Framework:
Environment
The
RTS Solution is designed to find violative products, facilitate
trade, increase revenue and improve supply chain security
• Leverage Open Source and other intelligence to find risky products before
they arrive in country (Pre-Arrival Intelligence)
• Separate high from low risk imports to give entry reviewers more time to
evaluate the higher-risk lines and automatically “may proceed” the low risk
imports
• Evaluate each entry line-item on the basis of a wide range of risk factors
derived from a wide set of data sources
• Provide automated queries to multiple databases and integration with third
party data sources
• Produce a consistent applicable agency-wide entry examination process
• Tightly integrates with Customs systems like ASYCUDA etc
Analytical Breadth:
 Statistical analysis of importer &
exporter combination
 FOB value analysis for improved
fraud detection
 History of involved parties:
manufacturer, shipper, origin,
transit info, consignee etc
 Purposeful errors in filed
information
 Cross references with external
trade databases
 Open source intelligence about
Customs fraud
 Expert intelligence from Customs
field offices
 Geospatial analysis of addresses
and locality
 Data anomaly analysis of value to
quantity ratio
 Correlation with other elements
on the declaration form
 Seasonality of product
 Text mining of declaration
contents
 Identification of multiple
importer identities
Risk Targeting & Profiling Example:
Automates processing for risk screening and targeting
External Parties
Importers
Customs Brokers
Science
Regulatory
Office of
Science
Office of
Regulations
& Policy
Sciencebased rules
CUSTOMS
•ASYCUDA
•Other Systems
Import Declaration
Forms & Supporting
Documents
Decisions
General Infobased rules
Operations
Entry
Reviewers
Field
Examiners
Line
Items
Entries
&
Line
Items
Facilities
Labs
Samples
FACTS
PREDICT
Static, Disjoint
Risk Targeting
“Pass”–“Hold”
Decision
Rules
System
Facility
Inspectors
Field Activities & Compliance Tracking
System
NXRTS
Field Experiencebased rules
Operational Impact:
 Reduction in manual/secondary inspection
Fewer items are held for inspection
 Significant reduction in cargo “dwell time” at ports of entry
 Improvement in revenue collected by customs
 Enhancement in valuation process and fraud detection
 Higher number of violations found:
Increased detection of risky cargoes and import violations
 Significant reduction in false positive hits
 Higher productivity for custom personnel
Same number of inspectors can process higher number of entries
 Tighter collaboration between customs & other agencies
 Enormous return on investment for the agency
Saved $M per year in operational cost
Conclusions & Paths Forward
 Intelligent Trade & Logistics Systems multiplies impact of
other investments and efforts
 Time is right – ICT infrastructure now in place
 High impact & Low cost
 Rapid deployment
 Addresses a range of challenges in developing regions
About Us:
 Delivers solutions to automate & accelerate Trade, Logistics, Security and
other verticals to improve operational efficiency
 Serves several US agencies and other national/regional governments &
regulatory authorities
 Deploys & manages logistic operations in US, South Asia, Middle East &
Latin America. Our operations;
 Captures & analyzes data on over 80% of global container cargo movement
 Supports operational risk targeting, surveillance and enforcement of imports
involving over 20 million transactions daily for Customs & regulatory agencies
 Monitors & manages over 3000 truck operations daily for 200 trucking companies
in a 375 sq. km. area around a seaport to mitigate congestion, facilitate cargo
clearance, track inland freight movement & border crossings
 Support air cargo screening for US Transportation Security Administration
THANK YOU
Email:
[email protected]
Tel:
+1 240 494 6691
+234 706 617 8563

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