Maersk launches Maersk Flow, a digital supply chain management platform

To further assist small and medium sized businesses with the complexity of managing their supply chains, Maersk is launching Maersk Flow – a digital platform which provides customers and their partners with everything they need to take control of their supply chain, from factory to market.

The solution enables transparency in critical supply chain processes and ensures that the flow of goods and documents is executed as planned. It also reduces manual work and costly mistakes, while empowering logistics professionals with all the current and historical data they need to sustainably improve their supply chain.

The daily life of small and medium sized businesses is increasingly global, complex and fast-paced. Every day thousands of products are moving through the supply chain, on multiple carriers, coming from and reaching many supply chain partners and customers. And for many of these companies this complexity is managed fully manually via spreadsheets, emails and phone calls, which despite lots of hard work is leading to reduced visibility and control – and ultimately higher costs or lost sales. With Maersk Flow these companies will be able to take control of their supply chains.

Maersk Flow further extends Maersk’s customer reach and strengthens the company’s position as an industry leader in digital solutions.

Maersk Flow facilitates the uninterrupted flow of information, cargo, and documentation to empower you and your partners to take the right action at the right time. Its unique features give you convenience and bring coherence to your everyday operations, so that you can optimise your supply chain logistics and refocus your resources on delivering value to your customers. The tool will assist with –

  • Purchase Order Management
  • Booking Management
  • Reporting and Performance
  • Document Sharing
  • Visibility

For more information you can visit: https://www.maersk.com/solutions/supply-chain/maersk-flow

Maersk to acquire KGH Customs Services

A.P. Moller – Maersk will acquire Sweden-based KGH Customs Services for 2.6 billion Swedish crowns ($281 million), the company announced Monday.

KGH specializes in trade and customs management services in Europe across multiple freight modes. The deal adds to Maersk’s service offerings as the carrier looks to expand beyond ocean shipping and position itself as a full-service supply chain solutions provider.

“There are no end-to-end solutions without customs clearance,” Vincent Clerc, CEO of ocean and logistics at A.P. Moller – Maersk, said in a statement. “With KGH, we will not only be able to strengthen our capabilities within customs services and related consultancy, but also reach more of our customers in Europe through a larger geographical footprint and digital solutions that will enhance our ability to meet our customers´ end-to-end supply chain needs.”

Maersk has been open about its ambitions to expand its business into other parts of the supply chain, positing its logistics sector growth as a main business objective.

“Focus remains on developing our end-to-end offering through an even stronger Ocean product while expanding and scaling our logistics and services portfolio,” Maersk wrote in its latest annual report.

Maersk began outlining its end-to-end ambitions in 2016 and has taken multiple steps toward realizing its goal in the form of deals and reorganization. Last year, Maersk closed a deal to acquire the New Jersey-based customs broker Vandegrift. And in 2018, it announced plans to merge its operations with Damco.

Maersk sees its ocean business as the “strong foundation” for the rest of its logistics offerings, and new products will be important in adding to its end-to-end logistics offerings, the company explained in its latest annual report.

“The next phase in the strategy is about growing the business by innovating existing products combined with selling landside logistics products to our existing customers – as well as growth in our Terminals & Towage business,” the annual report reads.

Maersk has specifically said M&A would be one tool it would use to achieve its end-to-end initiative, highlighting landside logistics as one space where deals could happen in its annual report. And when the company brought on a new CFO, Patrick Jany, earlier this year, it specifically highlighted his experience with M&A.

Last year, Maersk became the first ocean carrier to offer digital ocean customs clearance, according to a press release. The offering allows shippers to upload declaration paperwork and the carrier can send a notification when the shipment clears customs, according to a video explaining the offering.

Source: 24/7 Customs Broker News, 6 July 2020

HMM Algeciras, the largest container ship worldwide – 2020

At maximum capacity, the ship carries slightly more 20-foot containers than its predecessor MSC Gülsün: 23,964 TEU versus 23,756 TEU. During this maiden voyage, HMM Algeciras will have 19,621 TEU on board – itself a record number.

The Korean vessel was completed at Daewoo Shipping & Marine Engineering’s Okpo shipyard on 24 April. It is some 400 metres long and 61 metres wide. For further information about Algeciras, we refer you to the video at “Biggest Container Ship in the World 2020”.

HMM is the new name for the South Korean ship-owner Hyundai Merchant Marine, the ninth-largest container shipping line worldwide. The company has ordered another eleven 24,000-TEU vessels in this class.

Source: Port of Rotterdam, 3 June 2020

East Africa COVID-19 Preventative Measure – Transit Cargo to move by Rail

Transit cargo destined for Uganda, Rwanda and South Sudan will be transported by Standard Gauge Railway (SGR) to Naivasha then to Tororo Kampala from June 1st, the government has said.

Transport Cabinet Secretary James Macharia said the move was arrived at during a meeting with his counterparts from the three countries as a key measure to curb cross border transmissions of COVID-19.

“All transit cargo/containers transported on SGR will be armed only at the Inland Container Depot (ICD) AT Naivasha to be tracked through the Regional Electronic Cargo Tracking System,” a part of the statement read.

Macharia further pointed out that all cargo railed to the Inland Container Depot at Naivasha will be collected by trucks to the partner states via Busia or Malaba.

He however, pointed out that fuel products will be transported by pipeline to Kisumu and thereafter through Lake Victoria to Port Bell or Jinja in Uganda.  

Cases of coronavirus among truck drivers who transport cargo across East African member states have tested positive with high numbers prompting Kenya to close its borders with Somalia and Tanzania.

Kenya has subsequently banned any truck driver who turn positive at the border from corssing into the country, with Tanzania having adopted a similar approach lately.

Health Cabinet Secretary Mutahi Kagwe said the development explained why President Uhuru Kenyatta ordered the mandatory screening of truck drivers at border posts before clearance into the country.

Kenya also closed its borders with Somalia, following increased coronavirus cases in Wajir which borders Somalia.

Since the border closure, Tanzanian government officials in Arusha and other border towns have publicly protested, accusing Kenya of discriminating their truck drivers.

Martin Shigella, the Tanga Regional Commissioner was blunt last week, declaring that no Kenyan truck driver will be allowed to cross into Tanzania, accusing them of exporting COVID-19 to the country which is largely seen as the weak link in managing coronavirus in the region, and the world. He also warned Tanzanians against buying goods in Kenya.

But on Wednesday, President John Pombe Magufuli announced on a tour to Singinda region, that “COVID-19 pandemic will not threaten our association with Kenya.”

He said he had held talks with his Kenyan counterpart Kenyatta, and agreed to have their ministers resolve the matter.

“Our economies need each other, our onions are sold in Kenya and Kenya exports milk and other items here,” he said, rooting for a diplomatic solution to the crisis.

Source: Capital News, (Kenya), 22 May 2020

What is a bill of lading and why isn’t a digital format industry standard?

The bill of lading is believed to be the most important transport document in international trade: a mainstay of the global supply chain that’s present from origin to destination and critical to customs clearancefinancing and ownership of cargo.

But for as much as shipping has changed over the decades, not much about the bill of lading (BL) has. Today, it’s pretty much the same often-paper, always-time-consuming document it ever was.

That’s why driving an eBill standard is largely considered the Holy Grail of global trade. Succeed in that, and partners up and down the supply chain would benefit from the days and weeks that paper BLs add to the process as they are printed, pouched, messengered, lost, found and waited upon.

It’s ironic because there isn’t a single aspect of the BL that couldn’t be done better digitally. To demonstrate, let’s dive into the essence of these documents and the challenges that remain to making them digital.

How does an original paper bill of lading work?

Once the vessel departs, an original BL can be issued by the ocean carrier. After the shipper endorses the original bill, it is couriered to the buyer who then needs to surrender it back to the carrier at destination as part of the cargo release process.

It sounds simple enough, but along the way the BL impacts many other processes and actions. Even before issuance, the time-consuming process from a shipping instruction to the issuance of a verified BL, many iterations and changes can occur to get the BL into an approved state.  

The BL, and its critical data fields are required for customs clearance, letter of credit, change of title and other processes. One delay in any of these can result in costly extra charges.  

The functions of a bill of lading were made to be done electronically

In oftentimes convoluted international shipments, the BL is the legal go-to document that facilitates negotiation, lending and risk reduction by performing three key functions:

1. It is evidence of a contract of carriage

2. It confirms receipt of goods

3. It serves as the title to the goods

So, can eBill perform these functions while maintaining the integrity and legality that’s required? The P&I Clubs think so. Today’s top eBill solutions meet these challenges through rule frameworks and advanced security measures — all while providing significant cost and time savings.

eBills can play a pivotal role — and a digital role

Carriers issue the BL, but they rely on information from shippers which may change multiple times during the booking and shipper’s instruction processes. Electronic features like structured documents make creation, approval, distribution, tracking — everything — easier than paper.

This benefits not only the shippers but the carriers, buyers, sellers and banks without having the need to continue to print out paper — which defeats the purpose

Digital does the different types of bill of lading better

There are many types of BL, reflecting the complexities of international trade. Eliminating paper is only the beginning of the ways eBills can help streamline processes related to the two main categories of BL:

Sea Waybills are sometimes referred to as “Express Release.” They have a named consignee on them but are issued without any original documents that have to be presented for the release of the cargo. Non-negotiable and non-transferable, they are usually used in three cases:

  1. Intra-company shipments between divisions located in different countries
  2. Shipments when no negotiations take place between the seller and the consignee
  3. Instances when the shipper doesn’t have to submit an original BL to any party in order to secure their payment

Original BLs have different forms that all hinge on the issuance of original BL documents in some way.

· Order BLs are the most common type of BL. They enable delivery of the cargo to be made “To Order” to the bonafide holder of the BL. These types of BL are negotiable and often linked to letter of credit transactions. Often banks must verify and endorse the original BL before the cargo can be released to the buyer.

  • Straight BLs stipulate that the cargo may only be released to the specified consignee and only upon the surrender of an original BL.
  • Open BLs are negotiable and transferable. The name of the consignee can be changed with the consignee’s signature and transferred — often multiple times.

Going Digital assists in filling out the bill of lading

With shippers providing the majority of the information for a BL, completeness and correctness is crucial. eBills help guide the way. If shippers can provide bill of lading information digitally, there’s less risk of keying errors. Form fields and autofill features all speed the process and lead to time savings.

One of the challenges of going paperless with BLs from the very beginning is standards. Adhering to set data standards makes information useful for different parties within organizations and multiple supply chain partners and it enables seamless workflows from automation. Unfortunately, standards are far from being standard today.

Digital makes the information included in a BL more useful

Users look to the bill of lading as an infallible source of essential and comprehensive information like names and addresses, purchase orders or reference numbers, special delivery instructions, pickup date, description of items, packaging type, NMFC freight class and DOT hazmat designations.

eBills of lading can make this information highly transparent to supply chain partners who can use it. But like many of the benefits of eBills, this transparency hinges on adoption — if all the participants of the supply chain are rowing together digitally, it works. If not, it just makes for another manual process that may end up being even more work than paper.

With its centrality to supply chains and essentiality to digitizing global trade, it’s easy to understand why the industry has its sights set on digitizing this important document. But acceptance of the eBill remains both the goal and the greatest challenge today. That’s why getting the eBill to catch on will require successfully digitizing the entire process for eBills, too.

TradeLens, with its relationships with the world’s largest ocean carriers, is in a unique position to explore the digitization of this process at an unprecedented scale. Within an ecosystem where there’s already widespread acceptance, the potential of the eBill could finally be revealed. 

Source: Original article authored by Jeffrey Ivinski, 13 April 2020

Illicit Cigarettes – Hong Kong customs intercepts four shipping containers

Photo: Winson Wong

Hong Kong customs has uncovered HK$85 million worth of smuggled cigarettes in the largest seizure of its kind in two decades, after authorities acted on intelligence indicating a syndicate was shipping the haul into the city in four containers.

Some 31 million cigarettes were stashed in the containers from Yokohama in Japan. They were then shipped through different ports in South Korea, Vietnam and mainland China, according to Lee Hoi-man, deputy head of the Revenue and General Investigation Bureau under customs.

He said the circuitous route was used by smugglers to avoid detection.

“The containers were shipped into three to four different ports before they came to Hong Kong,” Lee said adding that the contents listed on import documents were changed to throw off law enforcement in various jurisdictions.

Four men – one mainlander and three Hongkongers – aged between 24 and 41 were arrested in the operation on Monday. They were still being held for questioning on Tuesday evening.

Information on the containers was shared to a global database operated jointly by customs from different countries, under an anti-smuggling campaign code-named “Project Crocodile”.

A law enforcement source said the containers were left idle at another port since December, but were then suddenly moved across different countries before arriving in Hong Kong, one at a time since last Friday.

Lee said: “It is possible smugglers believed our frontline officers were tied up in dealing with the coronavirus outbreak.” He added that some of the contraband items were believed to be destined for countries in eastern Europe as some cigarette brands seized in the operation were popular there.

Hong Kong customs began investigating the syndicate in mid-December before identifying the four containers.

On Monday afternoon, officers from the Revenue and General Investigation Bureau swooped into action and seized 22 million sticks of cigarettes stashed in three containers at yards in Yuen Long, Sheung Shui and Man Kam To, arresting the four men.

At the Sheung Shui site, officers also seized 3,500 bottles of duty-not-paid liquor worth HK$2.5 million.

On Tuesday, the fourth container which had arrived from Shenzhen a day before was selected for inspection. Nine million cigarettes were found in it.

Lee said the combined haul had an estimated street value of HK$85 million, and was the biggest seizure of its kind in two decades in a single operation.

He said his team was working with overseas counterparts to determine the exact origin of the shipment and track down the ring leader and core syndicate members.

In Hong Kong, importing or exporting unmanifested cargo carries a maximum penalty of seven years in jail and a HK$2 million fine.

Source: Article by Clifford Lo, South Morning Post, 18 February 2020

Insight: Transnet import/ export delays harming SA’s competitiveness

The following article provides insight into prevailing problems concerning rail transport between Durban and Johannesburg, in particular containerised and bulk rail cargo. Again, private enterprise is ahead of the game, but must wait for the availability of reliable rail services to permit uninterrupted movement of goods. The bottom line – an under-performing and unreliable railway network to South Africa’s hinterland means the country’s road networks will remain under stress; and, will themselves fall into a state of disrepair. This contributes to the country’s lack of competitiveness. The article puts into perspective the announcement of the Distribution Junxion, Port of Gauteng which will be situated south of Ekurhuleni, where it borders conveniently on the Durban-Johannesburg railway line.

Article: Hurry up/Wait: Transnet import and export delays harming SA’s competitiveness, authored by Sasha Planting, Daily Maverick, 16 February, 2020

Port of Gauteng development

USCBP seizes MSC Gayane with 18 tonnes of cocaine aboard

MSC Gayane

US customs officials seized a container ship financed by JPMorgan this week after authorities found nearly 18 tons of cocaine with an estimated street value of $1.3 billion in the vessel.

The drug bust on the Liberian-flagged MSC Gayane is surprising for several reasons. The sheer quantity of cocaine it was carrying, its links to JPMorgan, its presence in the US, and the recent string of West African drug busts are worth noting.

A container ship financed by JPMorgan was seized by US customs officials this week after authorities found nearly 18 tons of cocaine with an estimated street value of $1.3 billion on the vessel. The drug bust on the MSC Gayane is surprising for several reasons, outlined below.

The roughly 39,500 pounds, or 17.9 metric tons, of cocaine – about the same weight as three African bull elephants – found aboard the MSC Gayane outweighed the total amount of cocaine that passed through West Africa in 2013 and all of the cocaine seized across Africa from 2013 to 2016, according to the United Nations Office on Drugs and Crime.

The vast quantity may reflect a supply glut. Global cocaine manufacturing surged by a quarter in 2016 to 1,410 tons, according to the World Drug Report 2018. The production boom is centered in Colombia, where cultivation of the coca plant rose 17% to 171,000 hectares in 2017, according to the UN.

The link between the MSC Gayane and JPMorgan may be the most surprising aspect of the drug bust.

The MSC Gayane is operated by the Switzerland-based Mediterranean Shipping Co., but JPMorgan helped finance MSC’s purchase of the ship. The two reportedly structured the purchase so the ship was owned by client assets in a transportation strategy fund run for JPMorgan’s asset-management arm.

JPMorgan hasn’t yet publicly addressed its association with the vessel, and it has declined to comment to Markets Insider.

The MSC Gayane sailed under the flag of Liberia, a West African country. West Africa is a popular transit route for smugglers between South America and Europe because of its porous borders, weak rule of law, largely unmonitored coastline, and limited infrastructure and resources. The proportion of cocaine seizures in Africa accounted for by West Africa rose to 78% in 2016, “reflecting the rapidly growing importance of West Africa as a transit area,” the UN Office on Drugs and Crime said.

But there appears to be little drug smuggling between West Africa and the US, making the MSC Gayane drug bust highly unusual. Higher street prices and a lower risk of getting caught make Europe a more lucrative and attractive market than the US, the Nigerian drug smuggler Chigbo Umeh told The Guardian in 2015.

While notable, the ship’s flag doesn’t necessarily implicate Liberia.

“A Liberian registered ship is not in itself a link with the West Africa drug economy,” Mark Shaw, the director of the Global Initiative against Transnational Organized Crime, said in an interview with Markets Insider. “Liberia serves as a flag state for much shipping.”

The drug bust on a Liberian-flagged vessel is the latest in a string of major seizures linked to West African countries this year.

In May 2018, Algerian officials seized more than 1,500 pounds of cocaine on a Liberian-registered container ship that was transporting frozen meat from Brazil, according to the BBC. In February of this year, Cape Verde officials found 21,000 pounds of cocaine, with a street value north of $700 million, on a Panamanian-flagged vessel. A month later, authorities in Guinea-Bissau notched their biggest-ever cocaine bust – and the country’s first in a decade – when they discovered more than 1,700 pounds of the drug hidden in a false bottom of a truck loaded with fish.

“There were doubts whether West Africa was still being used as a major transit route, but these seizures seem to suggest that there is a return,” Shaw said in an interview with Bloomberg in March. “It’s a surprise and it’s very significant.”

Source: The article was written by Theron Mohamed, Market Insider, 11 July 2019

Grasping the size of Container Traffic

The following infographic is shared courtesy of Visual Capitalist

Size-of-Shipping

Tambo Springs Intermodal Facility gets the Go-ahead

Tambo Springs Rendering

Tambo Springs Rendering – Transnet

The following abridged article was authored by Suren Naidoo, published in MoneyWeb on 6 June 2019.

Ports and logistics parastatal Transnet is moving ahead with plans to develop a new ‘inland port’ [terminal] in Gauteng and on Wednesday announced the winning bidder that will develop and operate the R2.5 billion Tambo Springs Intermodal Terminal in Ekurhuleni.

Transnet’s says the deal represents a major public-private partnership (PPP) that will see Southern Palace Joint Venture Consortium holding a 20-year concession for the new inland terminal, which will complement the container facilities at City Deep.

A wholly black-owned and managed diversified industrial holding company, Southern Palace is the lead concessionaire in the consortium. Its partners in the project include Italian state rail and infrastructure company Ferrovie dello Stato Italiane as technical partner and supply chain and advisory group Makoya as logistics and marketing partner.

The new terminal in Springs will have an initial capacity to handle around 225 000 TEU [20-foot-equivalent unit] containers in its first phase and ultimately grow to handle some 550 000 TEUs. City Deep, located near the Johannesburg CBD, has a capacity of 400 000 TEUs and has already reached almost 80%.

The new Springs terminal will boost efficiencies as a fully-fledged modern intermodal facility, directly connected to the Natal Corridor (Natcor) rail link between Durban and Johannesburg.

The PPP project will improve the rail freight system in the country and boost economic growth. Transnet has experienced challenges on the general freight rail side, which has been in systemic decline over the years.

The decline of general freight rail has contributed to the growth in the number of trucks on national roads, especially the N3 between Durban and Johannesburg. There is therefore some urgency to get general freight working again on rail. With time-sensitive cargo, rail can play a critical role as part of the intermodal mix.

The Springs terminal is expected to break ground by November and is anticipated to open in 2022.

It will be located on a 67-hectare (ha) site within the broader Tambo Springs Logistics Gateway development, which is being master-planned by the Tambo Springs Development Company on 607ha of land near the N3. Transnet has already purchased 35ha of land within the new development node, with another 32ha being negotiated.

The City of Ekurhuleni will provide major bulk services for the development. The terminal will be developed as part of a next-generation logistics gateway combining direct terminal handling facilities as well as back-of-terminal property development and related value-add logistics services and activities.

The existing Natcor dual directional freight rail line runs directly to the site of the [new terminal]. Transnet will therefore not incur significant additional costs for new rail infrastructure to connect to the new terminal, but rather, leverage off the existing infrastructure.

Once the terminal is developed, it is expected to spur surrounding industrial and commercial property development to the tune of around R20 billion from the private sector.

Southern Palace, told Moneyweb that Southern Palace has brought in international rail and container terminal specialist Italferr, which is part of the Ferrovie dello Stato Italiane group. The joint-venture consortium is also supported by Concor and engineering firm AECOM.

Southern Palace has raised around R7 billion to date through its various businesses, so the terminal will be largely “self-funded”.

See the unabridged article here!

Trade Lens – Maersk and IBM implement their jointly developed blockchain-based solution

TradeLens

Maersk and IBM have introduced their global blockchain solution TradeLens, with 94 organizations already participating. The companies announced their joint venture in January this year after collaborating on the concept since 2016.

Early adopters include more than 20 port and terminal operators across the globe, including PSA Singapore, International Container Terminal Services Inc, Patrick Terminals, Modern Terminals in Hong Kong, Port of Halifax, Port of Rotterdam, Port of Bilbao, PortConnect, PortBase and terminal operators Holt Logistics at the Port of Philadelphia. They join the global APM Terminals’ network in piloting the solution at over 230 marine gateways worldwide.

Pacific International Lines has joined Maersk Line and Hamburg Süd as global container carriers participating. Customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru are participating, along with customs brokers Ransa and Güler & Dinamik.

Participation among beneficial cargo owners has grown to include Torre Blanca / Camposol and Umit Bisiklet. Freight forwarders, transportation and logistics companies including Agility, CEVA Logistics, DAMCO, Kotahi, PLH Trucking Company, Ancotrans and WorldWide Alliance.

TradeLens uses IBM Blockchain technology built on open standards to establish a single shared view of a transaction without compromising details, privacy or confidentiality. Shippers, shipping lines, freight forwarders, port and terminal operators, inland transportation and customs authorities can interact via real-time access to shipping data ad shipping documents, including IoT and sensor data ranging from temperature control to container weight.

Using blockchain smart contracts, TradeLens enables digital collaboration across the multiple parties involved in international trade. The trade document module, released under a beta program and called ClearWay, enables importers/exporters, customs brokers, trusted third parties such as Customs, other government agencies, and NGOs to collaborate in cross-organizational business processes and information exchanges, all backed by a secure, non-repudiable audit trail.

During a 12-month trial, Maersk and IBM worked with dozens of partners to identify opportunities to prevent delays caused by documentation errors and information delays. One example demonstrated how TradeLens can reduce the transit time of a shipment of packaging materials to a production line in the U.S. by 40 percent, avoiding thousands of dollars in cost.

Through better visibility and more efficient means of communicating, some supply chain participants estimate they could reduce the steps taken to answer basic operational questions such as “where is my container” from 10 steps and five people to, with TradeLens, one step and one person.

More than 154 million shipping events have been captured on the platform, including data such as arrival times of vessels and container “gate-in,” and documents such as customs releases, commercial invoices and bills of lading. This data is growing at a rate of close to one million events per day.

TradeLens is expected to be fully commercially available by the end of this year.

Source: Maritime Executive, original article published 2018-08-09

New Book – Container Logistics: The Role of the Container in the Supply Chain

Container LogisticsA new book by Dr. Rolf Neise examines how the global shipping container industry has witnessed an unprecedented shift as a result of a dynamic change in the global container trade landscape. Whilst the maritime container business has been studied in-depth, the impact on shippers and how shippers deal with the given challenges has not been fully examined until now.

Container Logistics: The Role of the Container in the Supply Chain looks at the maritime business from a customer’s perspective and covers areas such as the purchase of transportation services from ocean carriers and transport management, to efficient logistics execution from a supply chain perspective.

The book, published by Kogan Page, examines the challenges, solutions, and the latest developments in the container industry as well as the interaction between the different actors involved, such as freight forwarders, supply chain managers and shippers.

Neise is a lecturer at the International School of Management in Germany and a consultant supporting multinational companies in optimizing their supply chain management and logistics structures. Prior to lecturing, Neise was the Global Head of Logistics Operations at British American Tobacco responsible for defining logistics excellence in the end-to-end supply chain.

Nik Delmeire, Secretary General for the European Shippers’ Council, said: “The timing of this book is spot on. I am convinced that this book can contribute to the dialogue that is needed between all parties in the maritime supply chain.”

Source: Maritime -Executive

SARS Customs to introduce 24-hour Advance Rule and other Supply Chain reporting

SARS-RCG

Enter SARS RCG Webpage here!

This Friday, 20 April 2018, SARS Customs will implement its new Cargo, Conveyance and Goods Accounting solution – otherwise known as the Cargo Processing System (CPS). In recent years SARS has introduced several e-initiatives to bolster cargo reporting in support  its electronic Customs Clearance Processing System (iCBS), introduced in August 2013.

Followers of SARS’ New Customs Acts Programme (NCAP) will recognise that the CPS forms part of one of the three core pillars of the new legislative programme, better known as Reporting of Conveyances and Goods (RCG). The other two pillars are, Registration, Licensing and Accreditation (RLA) and Declaration Processing (DPR). More about these in future articles.  In order to expedite the implementation of the new Acts, SARS deemed it necessary to introduce elements of the new functionality via a transitional manner under the current Customs and Excise (1964) Act.

Proper revenue accounting and goods statistical reporting, can only be adequately achieved if Customs knows what goods ‘actually’ arrive, transit and exit it’s borders. Many countries, since the era of heightened security (post 9/11), have invested heavily in the re-engineering of policies and systems to address the threat of terrorism. This lead to a re-focus of resources and energies to develop risk management systems based on ‘advanced information’. SARS has invested significantly in automated systems in the last decade. Shortly, SARS it will also introduce a new automated risk engine with enhanced capabilities to include post clearance audit activities.

It should also not come as a surprise to anyone conversant with Customs practice, that international Customs standards such as the WCO’s SAFE Framework of Standards, the RKC and the Data Model are prevalent in the new Customs legal dispensation and its operational business systems.

South Africa will now follow several of its trading partners with the introduction of ‘advance reporting of containerised cargo’ destined for South African sea ports. This reporting requires carriers and forwarders to submit ‘advance loading notices’ to SARS Customs at both master and house bill of lading levels, 24 hours prior to vessel departure.

The implementation of CPS is significant in terms of its scope. It comprises some 30 odd electronic cargo notices and reports across the sea, air, rail and road modalities. These reports form the ‘pipeline’ of information deemed necessary to ensure that the ‘chain of custody’ is visible and secure from point of departure to final destination. For the first time, South Africa will also require cargo reporting in the export domain.

SARS_RCG_ Message_Schema 2018

Download a high resolution map of SARS Cargo Report Messages here!

It is no understatement that the CPS initiative is a challenge in particular to new supply chain entities who have not been required in the past to submit electronic reports. In order to meet these reporting requirements, a significant investment in systems development and training is required on the part of SARS and external trade participants. To this end, SARS intends to focus on ramping up compliance amongst all cargo reporters across all transport modalities. The first modality will be road, which is the most significantly developed and supported modality by trade since the inception of manifest reporting under the Customs Modernisation Programme. The remaining transport modalities will receive attention once road is stabilised. 

 

CargoX – World’s First Blockchain Bill of Lading

CargoX

Hong Kong-based CargoX raised $7 million through an initial coin offering to build its smart contract-based house bill of lading solution. CargoX, has designs on developing so-called smart contracts to transfer house bills of lading onto a blockchain solution it is building. House bills of lading are issues by non-vessel-operating common carriers (NVOs).

The coins, also called tokens, can be used to pay for CargoX’s smart contract solutions, but those interested in the blockchain-backed bill of lading solution can also pay with traditional currencies.

“Our platform will support all the legacy payment options with fiat money, but as we are a startup based on blockchain technologies, we are working on implementing cryptocurrency payment as well,” said CargoX founder Stefan Kukman. “There will be various service levels supported, and there will be additional features and services provided to holders and users of our CXO utility tokens.”

The ICO serves two purposes in this application. It helps CargoX raise funds as opposed to seeking venture capital investment, but the coins can also be used to transact within the solution. So, the sale of the CXO tokens is ancillary to the product offering.

That’s different from another crypto-token liner shipping model that emerged in the second half of 2017 called 300Cubits. That company issued tokens, called TEUs, to underpin a solution that would penalize shippers and carriers for no-show or overbooking behavior.

CargoX, meanwhile, said it wants to be a neutral platform for global trade documentation and is starting with the bill of lading approach. The solution comprises an app, a document exchange protocol, and a governing body, which is currently being established.

“The next step is to demonstrate the viability of our platform with a test shipment,” Kukman said.

That pilot, scheduled for the second quarter of 2018, links a logistics company with its clients on a shipment from Asia to Europe.

“Technology companies often lack the shipping and logistics expertise necessary to break into this industry,” Kukman said. “On the other hand, logistics companies venturing into the tech field may be held back by their reliance on established, old-school business practices.”

To register, CargoX collects “know your customer” and NVO license information “to establish roles and permissions on the platform.”

“Once companies register, they will receive their public and private key for signing the Smart B/Ls. This can be done in the Smart B/L distributed application provided by CargoX, or with the help of the CargoX Smart B/L API (application programming interface) integrated into the company’s system.”

That integration can take a few hours or weeks, depending on the workflow of the company, CargoX said.

The ultimate goal of bringing bills of lading to the blockchain solution is to create a common, encrypted repository of data. The secondary benefit of that process would be the potential to eliminate bank-backed letters of credit for suppliers, as the smart contract would automatically trigger payment.

“The shipping industry currently wastes billions of dollars on spending related to letters of credit, which are used in global trade as a payment guarantees,” Kukman said.

In terms of how the blockchain-backed bill of lading would function in practice, Kukman said that data will be encrypted and stored in a decentralized storage application.

“These are much safer than centralized storage, as they use the same blockchain security mechanisms as the billions of dollars worth of cryptocurrencies such as bitcoin currently in circulation,” he said. “Actual ownership (of the document) will be traded (sent) in the same way people send tokens today, from one wallet to another.”

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Source: American Shipper, E, Johnson, 14 February 2014