ICT in Trade Facilitation: Expediting Cargo Movement & Customs Clearance

February 2014

The Trident Group, LLC

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)

Imperative for Action:

Inefficiencies in the Supply Chain:•High

incidence of physical inspection by Customs (limited data to support admissibility decisions )

•Poor cargo arrival, discharge & release planning

•Manual handling of import/export processes

•Limited regional cooperation & border mngmt

Entry/Exit Points:+ Seaports

+ Airports

+ Borders

•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

Inland Transportation & Logistic Systems

• Inadequate/inconsistent policy regime (e.g. ETLS)

•Limited enforcement of trade regulations/practices

•High incidence of sharp practices & non-compliance

Regulatory

Environment & Compliance

Existing Infrastructure

Community

Economy

InfrastructureEnvironment

Governance

Enablers: Factors & Impact

Trade & Logistics

Technology

PolicyOrganization

Adapted from: “Understanding Smart Cities: A Integrative Framework,” Chourabi, et al. (2012)

Fast

Surging

Slow

Rate of Change

Economy

Environment

Governance

Improving Trade & Logistic Efficiency

• Port Community System• Cargo Community System

Electronic Exchanges (Single Window)

• Truck Control System• Inland Transport/Corridor Management

Freight Traffic Management System

• Customs Screening System• Transit Access Monitoring

Risk Targeting & Import Compliance Systems

+ Process Trade Documents + Improve Visibility+ Improve Trade Services

+ Eliminate Congestion+ Manage & Control Assets+ Manage, Track Cargo Movement

+ Improve Security+ Enhance Import Compliance+ Expedite Trade & Cargo Clearance

…one component at a time

Port Access Control: Congestion Mitigation

Truck Parking, Gating & Movement Systems

Cargo Movement: Transit Tracking & Monitoring

Border Transit & Regional Corridor Management

Freight Traffic Management:

Infrastructure Realities:

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

NAFITH : National Freight Information & Transportation Hub

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

الرابية)!( ساحةرقم

الخروج( 4)ساحةرقم

الجنوبية(3)ساحةرقم

الرئيسية(2)ساحةرقم

الرابية)!( ساحةرقم

الخروج( 4)ساحةرقم

الجنوبية(3)ساحةرقم

الرئيسية(2)ساحةرقم

الرابية)!( ساحةرقم

الخروج( 4)ساحةرقم

الجنوبية(3)ساحةرقم

الرئيسية(2)ساحةرقم

Port Access & Border Transit Control System (Jordan)

Nafith TCSJordan

Customs(ASYCUDA)

Ministry of Transport

Trucking Companies

Truck Drivers

Gate Operations

Container Terminal

Operators

ASEZA

• Provide registry of trucks and trailers by company and cargo type (XML)

• Provide Cargo releases (XML)

• Provide other releases for cargo pickup, e.g. fuel, bulk

• Apply for permits (equipment, cargo, operation, route, driver, and other data)

• Receive approval • Receives entry ticket from trucking company

• Receive permit with all details on operation

• Oversee movement of trucks through ASEZ

• Receive instructions from TCS

• Provide event data to TCS

• Use TCS to validate & schedule container pickup operations

• Validate data• Approve permits• Capture events• Manage capacity• Provide reporting

and alerts• Support invoicing

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2

3

4

5

6

7

8

Stakeholder Integration & Information Exchange

NAFITH: Efficiency GainsImproved 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

INTERNETTruck/cargo status

Billing/payment info

Request entry & route

Return Permit Number

Provide Permit

Number

Verify truck, driver, route, cargo

Provide paper permit with routing instructions

Track truck enroute & waiting yards

Record cargo pickup at terminal

Record truck exit

TCS IT Platform

NXFTMS™

Government of Jordan

Regulatory compliance

and status reports

Trucking Company

Management

Trucking Company

Dispatchers

TCS Operational Schema

Truck Park

Entry / Exit Control

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

Worked in a Developing Economy:

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: EnhancementsNAFITH 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 ValuationDetect 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 EnvironmentThe 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

Operational Framework:

Analytical Breadth: Statistical analysis of importer &

exporter combination

History of involved parties: manufacturer, shipper, origin, transit info, consignee etc

Cross references with external trade databases

Open source intelligence about Customs fraud

Expert intelligence from Customs field offices

Geospatial analysis of addresses and locality

FOB value analysis for improved fraud detection

Purposeful errors in filed information

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

External Parties Science Regulatory Operations

Customs BrokersImporters Office of

Science

Office of Regulations & Policy

Entry Reviewers

Facility Inspectors

LabsField

Examiners

Import Declaration Forms & Supporting

Documents

Decisions

FACTS

Field Activities & Compliance Tracking System

Entries & Line

Items

Line Items Facilities Samples

Science-based rules

General Info-based rules

Field Experience-based rules

Static, Disjoint “Pass”–“Hold” Decision Rules

PREDICT

Risk TargetingSystem

NXRTS

Risk Targeting & Profiling Example:

Automates processing for risk screening and targeting

CUSTOMS•ASYCUDA•Other Systems

Reduction in manual/secondary inspectionFewer 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 personnelSame number of inspectors can process higher number of entries

Tighter collaboration between customs & other agencies

Enormous return on investment for the agencySaved $M per year in operational cost

Operational Impact:

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

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

About Us:

Email: michaeli@tridentgrpllc.com

Tel: +1 240 494 6691

+234 706 617 8563

THANK YOU