Even though the world has surpassed the heights of the Covid-19 pandemic, analysts predict that 25% of workers will continue working from home indefinitely.
The closure of office buildings is bad news for special economic zones (SEZs) reliant on traditional commercial real estate. The past three years have come with many shocks, all of which threaten to disrupt traditional business models. The pandemic, the supply chain crisis, inflation, war in Ukraine, and the OECD’s 15% minimum corporate tax have all taken their toll.
Unsurprisingly, the past six months have seen a wave of SEZs running into bankruptcies, including in Vietnam, India and the Philippines.
A very different type of SEZ has emerged to cater to so-called “digital nomads” — office workers and entrepreneurs who, thanks to the internet and trends following Covid-19, no longer need to be tied to a physical location.
Most SEZs look like industrial parks. Some, catering to digital nomads, look more like beachfront resorts. To see examples of SEZs successfully tapping into this new market, look no further than the Cayman Enterprise City or Prospera in Honduras. Some planned future SEZs — like Malaysia’s $1.2bn Iskandar Waterfront — are taking this strategy to an extreme.
The most savvy digital nomads practice ‘min-maxing’ — a video game term referring to the practice of using the mathematics behind games in order to win more using fewer resources. In the context of digital nomads, the term means maximising how far one’s income goes by deciding where to temporarily relocate. Typically, digital nomads attempt to min-max three key metrics: cost of living, tax rules and living standards.
If SEZs want to attract digital nomads, the first question that they must ask themselves is whether they can offer a low cost of living.
Many digital nomads work for companies that pay in strong currencies, such as the US dollar or euro. Their mobility gives them the ability to work from anywhere, and as a result, many choose to live in jurisdictions where their currency goes further. Although expensive jurisdictions such as the UAE, Singapore and Monaco have much to offer, the daily cost of living is simply too high to attract digital nomads. On the other hand, low-cost jurisdictions such as Thailand, Brazil and Morocco have a significant advantage.
The next metric digital nomads try to maximise is personal income tax rates.
For those who hold passports from countries that tax overseas income (such as the US or China), optimisation is possible, but significantly more complicated. However, many digital nomads from countries like those in the EU succeed in paying no income taxes whatsoever. SEZs that expect to suffer as a result of the OECD’s 15% global minimum corporate tax can instead shift their incentives to offer personal income tax incentives if they want to attract digital nomads.
Finally, what matters the most at the end of the day is quality of life.
Regardless of how a jurisdiction optimises the cost of living or taxes, intangible quality of life factors ultimately matter more than anything else. Many digital nomads base their decisions on factors such as the beauty of the scenery, the quality of nightlife, the presence of services like Uber, the quality of historical monuments, and the friendliness of local people.
Targeting digital nomads comes with drawbacks. They tend to create service sector jobs rather than export-oriented industries. They also are fickle and can leave at any moment. Most currently operating SEZs are zoned for industrial and commercial use rather than residential use. Countries like Portugal now offer digital nomad visas; countries with clumsy visa policies will be left behind.
While most SEZs are probably not good destinations for digital nomads, the few that successfully cater to them will become powerhouses over the next decade. As the world becomes more mobile, the collective economic power of digital nomads will become increasingly prominent.
WCO Secretary General Dr. Kunio Mikuriya stated, “How to achieve equitable distribution of COVID-19 vaccines is critical, and Customs administrations around the world should support global efforts by not only facilitating the cross-border movement of the vaccines themselves, but also by speeding up and facilitating the Customs clearance of the raw materials and components used in the vaccine manufacturing process.” He added that “This will greatly contribute to the efforts to scale up vaccine manufacturing and the 2nd edition of the Secretariat Note highlights the critical role Customs”.
The guidance outlined in the Secretariat Note draws upon relevant WCO instruments and tools, Members’ good practices and insights gathered as a result of the collaboration with other international organizations, the pharmaceutical industry, logistics providers and other relevant private sector entities.
The Secretariat Note is designed to be a living document that will be enhanced with more Members’ practices and further practical guidance as WCO Members and the industry gain experience and share information with the WCO Secretariat on the Customs clearance of COVID-19 vaccines, related supplies, inputs and equipment.
In a statement, the IMO said the ‘Single Window for Facilitation of Trade (SWiFT) Project’ will develop a system in a pilot port to allow electronic submission, through one single portal, of all information required by various government agencies when a ship calls at a port.
The SWiFT project will be implemented by IMO in partnership with Singapore, the body said.
Regulations in IMO’s Facilitation Convention require electronic exchange of data, to ensure the efficient clearance of ships and the single window concept is recommended, to avoid duplication of effort.
Individual data elements should only be submitted once, electronically through a single point of entry, to the relevant regulatory agencies and other parties.
According to the IMO, the COVID-19 pandemic has emphasised the value of digitalisation and electronic exchange of required data is speedier, more reliable, efficient and COVID-secure than manual processes.
Under the pilot project, the selected country will be advised on the necessary legal, policy and institutional requirements for the MSW system. The port will then be provided with functional MSW software, hardware and/or IT services, configured to the country’s needs.
The pilot will be supported by Singapore via in-kind contributions and by IMO via the Integrated Technical Cooperation Programme (ITCP).
Kitack Lim, IMO’s Secretary-General, said, “Increased digitalisation supports greater efficiency which benefits the ship, the port and wider supply chain.
“We want to support countries in implementing the FAL Convention requirements for electronic data exchange, by supporting a pilot project which will show the way and result in know-how which can then be shared with others.”
Following the initial pilot and subject to funding availability, the aim is to replicate the pilot project in other IMO Member States in need of similar technical assistance, the IMO claimed.
Julian Abril, Head of IMO’s Facilitation Section, “Following implementation in the pilot port, the IMO-Singapore project endeavours to springboard countries in their digitalisation journey and unlock the full potential of their maritime sectors.
“It is only when most, if not all, ports undergo digital transformation, that the full benefits of digitalization can be realized by the maritime community.
“With support from IMO’s Department of Partnership and Projects, we envisage an increasing number of discussions with external partners and resource mobilization efforts to support an ambitious scaling-up plan for this pilot initiative.”
In this new stage of the COVID-19 pandemic, in which vaccines are ready for distribution, the WCO Council has tasked the Secretariat to work with relevant international organizations to develop guidance materials to facilitate the cross-border movement of situationally critical medicines and vaccines, including highlighting existing HS classification for critical medicines, vaccines and associated medical supplies necessary for their manufacture, distribution and use.
The WCO’s Tariff and Trade Affairs Directorate, in close cooperation with the World Health Organization, has prepared a new HS classification reference for vaccines and the medical consumables normally used during the vaccination process, including the equipment used for their storage and transportation.
Once again, the Customs community comes together, united in celebrating International Customs Day, which officially falls on 26 January of each year. This special day enables WCO Members, the WCO Secretariat and Customs’ worldwide partners to dedicate themselves to taking forward a particular theme. Thus, throughout 2021, under the slogan “Customs bolstering Recovery, Renewal and Resilience for a sustainable supply chain,” the Customs community will be focusing on emerging from the global pandemic and support people and businesses by strengthening the global supply chain, reinforcing collaboration, harnessing technology and putting “people” at the centre of the transformation process.
Indeed, as Customs will be moving to reconstruction in the wake of COVID-19, Members will be invited to embrace digital transformation at the borders, paying particular attention to automation, the use of innovative technologies, and the adoption of collaborative approaches with all stakeholders along the supply chain.
Customs, being uniquely positioned and mandated at borders, can contribute to a sustainable supply chain in the following ways:
Reinforcing collaboration to drive the Recovery process. The economic impact of the pandemic on companies has been colossal, with considerable disruption of global supply chains. The herculean task of reconstruction cannot be undertaken in isolation, and the expertise of all border agencies and stakeholders will be a decisive factor. Customs will be called upon to demonstrate its leadership during this process, at the national and international levels. The COVID-19 crisis has demonstrated that coordinated border management is possible, efficient, and can be further institutionalized at international and national levels. The sound implementation of the SAFE Framework of Standards, including the AEO standards and cooperation with other government agencies, appears to be a relevant focus in this context. Given the increase in e- commerce observed during the COVID-19 period, it would be timely for Members to implement the WCO E- Framework of Standards on Cross-Border E-Commerce in order to address security and facilitation in the context of this emerging supply chain trend, in close collaboration with stakeholders.
Embracing advanced technologies to enable Renewal rather than return to how things were before. The COVID-19 pandemic has shown the importance of major innovative and technological concepts which the WCO has been promoting for years. These include all-digital and paperless clearance methods, and the use of technology for implementing effective controls and facilitating, enhancing and accelerating processes. Irrespective of the pandemic, Customs administrations have been sensitized – through specialized forums and conferences – about thebenefits that can be reaped from the integration of technologies based on the use of big data, telematics and the Cloud into Customs operations. Building on the lessons learned, Customs administrations should look at the way goods are cleared at borders from a fresh perspective. Non-intrusive inspection devices, blockchain, artificial intelligence, sensors and connected objects, and other technological advances offer tangible benefits in terms of collecting, combining, sharing and analysing data, and these benefits should be maximized.
Putting “people” at the centre of change for a Resilient and sustainable supply chain. In order to address the vulnerability of Customs to systemic risks such as pandemics, Customs administrations will be called upon to build on the lessons learned and ensure that no one is left behind as we move towards a deeper transformation. To create greater resilience, “people” should be at the centre of the recovery model. Citizens around the globe have changed their daily lives drastically to adapt to the new reality. By the same token, Customs are called upon to rethink and adapt the way they operate, and enhance the preparedness of their staff through awareness raising and capacity building for the provision of a professional service. At the same time, resilience cannot be achieved without integrity, diversity and inclusion. A lack of integrity in Customs can distort trade and investment opportunities, undermine public trust in government administration and ultimately jeopardize the wellbeing of citizens, which in times of recovery could prove to be a recipe for failure.
The WCO will continue to provide guidance, help to share best practices and information, and deliver capacity building and technical assistance support to Members for the achievement of the above goals.
As in previous years, I am fully convinced that Customs administrations and the wider Customs community will rise to the occasion, fully committed to actively promoting their efforts and activities aimed at bolstering “Recovery, Renewal and Resilience for a sustainable supply chain” that includes sharing relevant practices and activities with others at WCO meetings and in key WCO publications.
Wishing you all a happy International Customs Day!
The WCO has published the 93rdedition of WCO News, the Organization’s flagship magazine aimed at the global Customs community, which provides a selection of informative articles that touch the international Customs and trade landscape.
This issue looks more specifically at Customs valuation, a technical but fundamental subject. Since its inception, the WCO has always been closely associated with the different multilateral systems used to value imported goods. As the Technical Committee on Customs Valuation established by the WTO Agreement on Customs Valuation has just celebrated its 50th Session, we thought it appropriate to retrace the history of the rules used to determine the value of imports, the challenges raised by their implementation and existing opportunities for Customs to enrich their knowledge and improve their practices in this area.
The “Panorama” section covers various topics such as the development of electronic tariff platforms in Africa, the improvement of the food clearance process in India, the construction of an advanced digital platform for trade and logistics in the United Arab Emirates, enhanced collaboration between Australia and Korea through officer placement, and, finally, the perspective of Customs experts on issues deemed important in their own country or area of work.
Following on from the previous edition of the magazine, we have compiled articles related to the COVID-19 pandemic in the “Focus” section. The WCO Secretariat presents, in particular, the new procedures and new tools adopted to ensure continuity of activities by the Organization’s working bodies. As for capacity building, it is discussed in an article describing the remote delivery of Mercator Programme Stocktaking and Forward Planning missions by the WCO team overseeing the HMRC-WCO-UNCTAD Programme.
The “Flash info” section includes a long article on the new approaches to measuring corruption and integrity which have been adopted by the WCO Secretariat team in charge of the Anti-Corruption and Integrity Promotion (A-CIP) Programme, and what lessons can be learned from their experience so far.
Finally, this issue’s “Point of view” article highlights the benefits of using systematic non-intrusive screening equipment and automatic detection to screen baggage upon arrival at airports.
It has been our great pleasure to produce another edition of WCO News and we trust that you will enjoy reading this issue, whether it be the paper version or the new mobile-friendly digital one.
A new information note published by the WTO Secretariat highlights how trade in goods and services has been affected by temporary border closures and travel restrictions linked to the COVID-19 pandemic.
It describes how the cross-border mobility of individuals plays an important role in both the cross-border provision and consumption of services and in manufacturing value chains.
The paper notes that sweeping travel barriers introduced in the early stages of the pandemic have given way to more fine-tuned policies aimed at allowing through “essential” foreign workers, or creating quarantine-free “travel bubbles” among partners. Nevertheless, mobility barriers have had a particularly heavy impact on tourism and education services, as well as on trade in goods, due to their effect on transport services and on information and transaction costs.
The paper notes that international cooperation has a potentially important role to play in minimizing the economic impact of mobility restrictions. For instance, exchanging information on lessons learnt about mobility restrictions and trade could help WTO members foster greater resilience in the face of future crises. Such an exercise could help with identifying options to implement travel measures that meet public health protection objectives while minimizing the negative effects on trade.
Key points
International trade and investment have always relied on the cross-border mobility of individuals.
To contain the spread of COVID-19, many WTO members imposed temporary border closures and travel restrictions. The severe restrictions on cross-border movement are not motivated by trade considerations but by public health reasons. Nevertheless, they have had a significant impact on trade. In several members, initial sweeping travel barriers have been replaced by more fine-tuned policies, aimed at allowing the movement of “essential” foreign workers, or creating “travel bubbles” permitting quarantine-free mobility among partners.
A significant amount of services trade requires physical proximity between producers and consumers. International mobility to consume or provide services abroad is one way to attain this proximity. Mobility is also important to the operations of services providers who establish a commercial presence in other countries, as well as to those who ordinarily provide services remotely across international borders.
Border measures and travel restrictions have had a particularly heavy impact on sectors such as tourism and education services. COVID-19 has triggered an unprecedented crisis for the tourism sector. In terms of travellers and revenue, international tourism in 2020 is expected to register its worst performance since 1950. In higher education, some institutions are facing a potential drop in international student enrolment of 50 to 75 per cent.
Mobility barriers also significantly affect trade in goods, through their impact on transport services and on information and transaction costs.
Restarting international mobility is unlikely to proceed in a linear fashion. Given the crossborder spill-overs resulting from measures affecting transnational mobility, a case can be made for supplementing domestic action with international cooperative efforts. WTO members may eventually wish to look into building greater preparedness and resilience for future crises, for example starting with information exchange about lessons learnt about mobility restrictions and trade. The exercise could help with identifying ways to implement travel measures that meet public health protection objectives while producing the least trade distortive effects.
As the title suggests, the latest edition of WCO Newscontains a variety of articles concerning Customs approach to COVID-19 and even one article relating to Customs Brokers on COVID-19. Other features include C-2-C cooperation and information exchange, Risk Management and the future invisible supply chain and Secure Border . Of interest for Customs Policy are articles on improvements to simplification and harmonisation of components to the Revised Kyoto Convention; WCO’s development of draft “Practical Guidance on Free Zones” as well as Internet domain name ownership data – understanding changes and useful suggestions for Customs. All in all another great read!
In the wake of the ongoing COVID-19 outbreak, characterized by the World Health Organization (WHO) as a pandemic on 11 March 2020, countries around the world have been adopting a series of trade and border protection measures to try to contain the spread of the disease across borders. Such measures have had immediate and severe impacts on economic activities and caused major disruptions in supply chains. Given that trade facilitation is a key policy tool that can help countries mitigate some of the impacts of the COVID-19 pandemic, the WCO has partnered with the WTO, UNCTAD, the CSSO, the GATF, IATA and ITC to develop a COVID-19 Trade Facilitation Repository in which all these actions are consolidated.
The repository acts as a platform that consolidates the initiatives on trade facilitation adopted by organizations and stakeholders, seeking to provide access to these resources in a unique and user-friendly database. It contains a useful listing of all such initiatives broken down by organization, type of measure and subject matter. As the situation evolves and further actions are taken, the platform will be expanded to include other key actors working in the area of trade facilitation.
Since the beginning of the COVID-19 pandemic and its unprecedented sanitary and economic effects, the WCO and other international organizations, NGOs, business associations and other representative entities have redeployed resources to develop new instruments, tools and guidance materials on trade facilitation measures. These documents can be a useful source of information for countries to learn from each other, share best practices and experiences and provide inspiration to design targeted policy responses. However, these resources were scattered throughout a multitude of platforms. This initiative will assist in ensuring that the seamless flow of safe cross-border trade continues, especially with regard to essential goods which are crucial for fighting the COVID-19 pandemic.
The COVID19 Trade Facilitation Repository can be accessed via the following link and will be updated regularly to reflect new guidance material developed.
The WCO thanks its partners, the World Trade Organization (WTO), the United Nations Conference on Trade and Development (UNCTAD), the Commonwealth Small States Office (CSSO) in Geneva, the Global Alliance for Trade Facilitation (GATF), the International Air Transport Association (IATA) and the International Trade Centre (ITC) for this initiative and reiterates its commitment to assist its Members in securing, protecting and facilitating legitimate global trade.
The WTO Secretariat has published a new information note looking at how the COVID-19 pandemic has affected e-commerce, including the implications for cross-border trade. It notes the increased use of e-commerce as consumers adapt to lockdowns and social distancing measures and draws attention to several challenges, such as the need to bridge the digital divide within and across countries.
As well as highlighting the uptick in e-commerce during the COVID-19 crisis, the report looks at measures introduced by governments to facilitate e-commerce and some of the challenges facing these initiatives. Governments have worked to increase network capacity, encourage the provision of expanded data services at little or no cost, and lowered or scrapped transaction costs on digital payments and mobile money transfers. The report also looks at ongoing e-commerce discussions in the WTO and how continued implementation of the WTO’s Trade Facilitation Agreement could address some of the challenges brought to the fore by the COVID-19 pandemic.
The report argues that the experiences and lessons emerging from the COVID-19 crisis could be a further incentive for global cooperation in the area of e-commerce, which could help to facilitate cross-border movement of goods and services, narrow the digital divide, and level the playing field for small businesses.
Freight gridlock at Shanghai Pudong International Airport is so bad that some cargo planes are being forced to leave nearly empty and logistics companies are recommending ocean transportation as a faster option.
Airfreight professionals describe an operational meltdown, with trucks stuck in queues for two to three days to drop off shipments and boxes piling up in warehouses unable to get put on aircraft because Chinese customs officials and ground handlers are overwhelmed by the surge in export demand for face masks and other medical supplies.
The volume of hospital gear, resumption of e-commerce and other trade following China’s coronavirus quarantine and new export restrictions are blamed for the massive backlog, which was compounded by factories rushing out extra shipments before closing for the May Day holiday.
“In my 20 years, I have never experienced this level of congestion at any airport. And there are no signs of this alleviating in the next week to 10 days,” especially with factories reopening again, Neel Jones Shah, the global head of airfreight at San Francisco-based Flexport, said in an interview.
An avalanche of personal protective equipment, test kits and disinfectant is descending on Chinese airports because the rest of the world desperately needs it to minimize exposure to the COVID-19 virus and air is the fastest delivery method. China is the world’s largest source for respirator masks, surgical masks, medical goggles and protective garments, accounting for 50% of global exports in 2018, according to Chad Bown of the Peterson Institute for International Economics.
But the onslaught of goods is running into a bureaucratic wall and piling up. Last month, Chinese authorities placed export controls on 11 types of medical supplies, including infrared thermometers, after complaints in Europe and the U.S. about low-quality purchases. Chinese-made N95 respirators failed in several tests to meet filtering standards for small particles, while non-medical masks are also being sold as medical-grade ones. In addition to special certification, all the shipments must be individually inspected and verified by customs authorities to make sure they are not defective or fraudulent.
The risk-control office that certifies the medical equipment was closed for Chinese Labor Day and customs worked reduced hours during the holiday, adding to the bottleneck.
The process of opening boxes and going through the contents with a fine-tooth comb is very manual and adds at least three days to transit times, said Brian Bourke, chief growth officer at Chicago-based SEKO Logistics.
China’s new policy has forced freight forwarders to cancel many bookings because export shipments are regularly failing customs inspections. Most of them are demanding customers have cargo ready at least four days before a flight. It now takes five to six days for shipments to get from the manufacturer’s dock onto a plane, according to logistics companies in the area.
Meanwhile, forwarders and consolidators are requiring all freight charges for protective garments be paid up front, 72 hours before departure, because the cost of chartering a dedicated plane at the eye-popping one-way rate of $1.5 million or more, is prohibitively expensive. Pre-payment is also desired because shipments may miss the flight’s cutoff time and result in the forwarder otherwise having to eat the loss.
Delayed or rejected loads have a knock-on effect, too, because they need to be rebooked on later flights.
The most-affected transfer station is PACTL, a joint venture between Shanghai Airport Group and Lufthansa Cargo that controls three of the seven cargo terminals at Pudong Airport, according to a SEKO client advisory. Since May 3, Eastern Air Logistics’ western cargo terminal is temporarily not accepting any new charter flights in an attempt to clear the backlog.
Chinese social media sites show massive traffic jams of trucks, with no space to unload, on the entrance road to Pudong Airport. The wait is so long, Bourke said, that trucking companies have to rotate fatigued drivers via motorcycle.
Even after shipments are cleared, they can sit in a warehouse because ground handling companies often don’t have enough labor to consolidate shipments for aircraft loading, he added.
Light loading
Jones Shah, a former head of cargo at Delta Air Lines, Inc. (NYSE: DAL), and others who do business at Pudong airport say the increased tender times have forced multiple carriers on several occasions to depart only 10% or 20% loaded because of schedule commitments, or fears that pilots will violate duty-hour limits by waiting.
Under normal circumstances, cargo airlines typically change crews in China. Instead, flights are originating in Tokyo or Seoul. Upon arrival, crews stay on the planes to avoid being tested or quarantined by Chinese authorities keen on preventing outsiders from reinfecting the local population. If freighters stay too long in Shanghai, crews will time out their duty clock and violate anti-fatigue rules before reaching a refueling stop in Anchorage, Alaska, or U.S. destinations.
“It’s a disaster right now. . . . There is personal protective equipment that could have been coming to the U.S. just wasn’t able to because of this backlog,” Bourke said.
Contacted by FreightWaves, North American passenger airlines that now operate so-called “ghost” charters — planes without passengers flying dedicated cargo routes — downplayed the congestion’s impact on load factors.
“PVG [airport code for Shanghai] has some challenges as a result of a huge increase in volume and flights, but American Airlines Group Inc. (NASDAQ: AAL) has been able to fill nearly all flights to-date. Demand remains very strong and our handling partners have been able to process freight in time to meet our outbound flights,” Sandy Scott, managing director of cargo operations – Europe & Asia Pacific, said in a statement. “Limiting export deliveries to 48 hours prior to flight departure helps with smoothing the flows through the cargo terminal. American is in constant contact with all global account customers, local customers, and handling partners to ensure flights leave on time and with full loads.”
A Delta spokesperson said, “Delta Cargo is working with our ground handlers and contracted warehouse providers in Shanghai to improve the situation in light of congestion affecting all airlines. Delta is committed to continuing our cargo-only flights between Shanghai and the U.S.”
Air Canada has not had aircraft leave empty because of good planning that enables it to swap out shipments that are not ready for ones that are, said Tim Wong, director of cargo sales and services for Asia-Pacific.
Airfreight workarounds
Freight forwarders are employing a number of tactics to bypass the bottlenecks and say customers need to be open to quick course corrections.
Flexport works with airline partners to delay flights upline, “before they leave for Shanghai because then the crews can continue to rest and not start their duty day. And that gives us a little more time to have freight tendered and built,” Jones Shah said. “But it can get tricky. Flights have to get to their destination because they have another flight after that. So, you’re operating within the confines of a very intricate schedule. This is a 24/7 job right now managing the complexity.”
Other Chinese airports face similar problems, to a lesser degree. SEKO is trying to avoid Shanghai at all costs for now, instead sending most airfreight to Zhengzhou airport, a 10-hour drive west of Shanghai. Time:matters, the logistics arm of Lufthansa Cargo, and its Chinese agent, Shanghai International Freight Forwarding, are also arranging cargo-only passenger charters from airports in Xiamen, Malaysia, and Nanjing, China, spokeswoman Katja Sondey said.
Making matters worse is that Chinese regulations don’t allow personal protective equipment to be exported or transshipped through Hong Kong.
“That has created lots of backlogs and capacity issues in Guangzhou and Shenzhen as many airlines do not have landing rights in mainland China and is one of the reasons why rates are sky high,” said Christos Spyrou, the CEO and founder of logistics cooperative Neutral Air Partner, via email from Hong Kong.
Fast-boat services, like those offered by Matson, Inc. (NYSE: MATX) and APL, offer another relief valve for shippers. Matson, for example, sails direct from Shanghai to Long Beach, California, in 10 days.
“We’re telling people that sometimes it’s more of a sure thing to move via expedited ocean services. And that’s an education,” Bourke said. “When your airfreight guys are selling ocean, that’s when you know that the market is working in a crazy way.”
Jones Shah said shippers — especially those who are moving a lot of volume — need a diversified strategy when it comes to moving medical supplies.
“If you’re just moving one shipment of 500,000 masks, airfreight is the way to go. If you’re moving multiple shipments of 40 million to 50 million masks over the duration of a project, there is absolutely a hybrid, modal strategy that is going to get you there.
“It’s not just air or ocean that’s going to let you be successful. You need a combination of the two,” he said.
Europe doesn’t have an express-ocean option, so some logistics companies are increasing use of transcontinental rail from China to move urgently needed protective suits and related supplies. Imperial Logistics International said it took 20 days for the first batch of 45 containers with medical gear for health care workers to arrive in Germany by train.
Source: Benzinga, featured on Yahoo.com, 8 May 2020
Many African states have closed their borders due to COVID-19. The movement of goods continues, albeit slowly. For people, transiting countries is difficult and the consequences for workers and small businesses are dire.
2020 should be the year of open borders in Africa. After years of negotiations, the concrete implementation of the African Free Trade Area (AfCFTA) was finally on the agenda. The common African passport was also to become a reality this year.
It is true that many countries allow goods to pass through, at least partially. However, the consequences for the continent, especially the long-term effects, can hardly be estimated. The African Union warns that border closures for people and goods could have a “devastating effect on the health, economy and social stability of many African states” that rely on trade with neighbors.
Africa thrives on mobility
The restricted transportation of goods is only one of the negative outcomes of border closures Africa is heavily dependent on the mobility of its workforce, explains to Robert Kappel, Professor Emeritus of the Institute for African Studies at the University of Leipzig. But right now, that workforce is stuck in place.
“Mobility is part of everyday life for most Africans,” Kappel told DW. “You go somewhere else for a while, work, earn income and send it to your family, acquire and bring back skills, create networks across borders,” Kappel said. The economist is certain that the longer mobility is restricted, the more African states will suffer from reduced economic growth.
Kappel cites Ivory Coast as an example. Just as Western European countries depend on eastern European harvest workers, many people come from Burkina Faso to work on Ivorian cocoa plantations.
Even people who have been living in Ivory Coast for a long time are now being sent back because of the COVID-19 pandemic. Kappel said the reason for their expulsion is simply because they are foreigners. “Cote d’Ivoire, one of the world’s largest cocoa producers, has been relying on the exchange of workers for decades and now suddenly has to limit this,” he said.
Southern Africa moving in the ‘right direction’
For goods transported by truck, meanwhile, the restrictions on the continent appear to be slowly easing. That’s according to Sean Menzies, responsible for road freight transport at the South African logistics company CFR Freight. The company’s trucks transport goods to almost all neighboring countries and member states of southern Africa’s regional bloc, SADC, including food to Zimbabwe and mining equipment to the Democratic Republic of Congo or to Zambia. The spread of coronavirus and the resulting border closures brought restrictions for CFR Freight.
Initially, only essential goods such as food, hygiene products or personal protective equipment could be transported across borders, Menzies said. Shortly afterwards, the regulations were also relaxed for cargo that reaches South Africa by sea but is destined for other SADC countries. These containers may be transported across borders, regardless of whether their contents are vital or not.
Menzies said the new regulations and controls will not delay the transport too much. “At the very beginning there were problems and a lot of confusion about what is required. But within a week, the customs officers understood and implemented the guidelines,” said the logistics expert. From then on, he said, traffic at the border posts has been fairly smooth. Menzies praised the cooperation in the region regarding the movement of goods during the pandemic.
COVID-19 test for East Africa truck drivers
The East African Community (EAC) is also trying to simplify the transport of goods between member states. On Monday the EAC issued new guidelines. Among other things, the regional bloc suggested that all border crossings should be kept open for freight traffic so that trucks can be cleared as quickly as possible.
EAC member states are interlinked at many levels, Kenneth Bagamuhunda, Director General for Customs and Trade in the Secretariat, the executive body of the EAC, said. “This forces us to really come together and issue regional guidelines,” Bagamuhunda told DW in an interview. Although the guidelines are not binding, they are intended to enable joint action.
The situation at the borders in East Africa could not be described as “very stable,” it was changing from day to day. But things were beginning to improve. Some states had started to test all truck drivers. “This led to some delays at first,” Bagamuhunda said.
30 kilometers (18 miles) – that’s how long the traffic jam was last weekend at the Kenyan town of Malaba on the border with Uganda, a Kenyan media house, Citizen TV, reported. Because truck drivers are particularly mobile, there is a risk that they will contribute to the spread of the virus. At least 20 of the 79 officially registered cases in Uganda are truck drivers, according to the BBC.
The EAC’s new guidelines now require testing for all truck drivers. The states are also to set up special stopping points so that drivers have as little contact with the population as possible.
Impact on farmers and small businesses
Small and medium-sized companies that depend on cross-border trade are particularly threatened by delays and restrictions, economist Robert Kappel said. “Many of the farmers or small entrepreneurs must now try to sell their products elsewhere but often the local market is limited.”
The EAC is now considering how to support these small businesses. According to Bagamuhunda, different approaches are being discussed: “Can we, for example, create an online mechanism so that they can handle their goods? Or systems that help them to trade with as little interaction as possible?” Soon, proposals will be made to politicians.
Source: article by Uta Steinwehr, DW.com, 2 May 2020
The WCO continues its close cooperation with the World Health Organization (WHO) to contribute to the rapid cross-border movement of medical supplies and medicines needed urgently during the current COVID-19 global pandemic. Following the coordinated response adopted by the two organizations, a WHO/WCO List of Priority Medicines was released and the Joint WCO/WHO HS Classification List for COVID-19 Medical Supplieswas further updated.
The clinical characteristics of the COVID-19 and its evolution makes it challenging for the health system of many countries and shortage of medicines can worsen the situation. Potential supply chain disruptions may jeopardize the timely supply of all essential medicines, including those not directly related to COVID-19.
The List of WHO/WCO Priority Medicines for Customs Used during COVID-19 aims at assisting Customs and economic operators in classifying these medicines. The list contains the suggested HS codes for medicines used in the general medical care administered to hospitalized patients; as part of the direct treatment of the COVID-19 disease; and for which interrupted supply could result in serious health consequences.
The new list, which will now be continuously updated, is the result of an efficient collaboration between the WHO and the WCO. The medicines and active substances were compiled by the WHO taking into account various information published by National Health Authorities, scientific societies or pharmacology experts, and with suggested HS codes provided by the WCO Secretariat.
Taking into consideration the suggestions received from Members and other stakeholders, the WCO/WHO HS Classification Reference for Covid-19 Medical Supplies was once more updated with additional items that could be used during this pandemic situation. COVID-19 medical supplies list update:
Future initiative foreseen by the WCO for COVID-19 medical supplies list
The WCO is aware that some countries have used the WCO list as a reference when making their own national lists of medical supplies. In order to further facilitate trade in medical supplies and present information in a coordinated manner, the WCO is considering, for the next edition of the medical supplies list, to include links to specific national classification lists of medical supplies. Members wishing to include information on their national classification lists of medical supplies can send their links to: hs@wcoomd.org.
Further assistance in identifying essential items can be found on the website of WHO. The COVID-19 Critical Items List from the WHO can be found at:
Top diplomats from 13 countries of a cross-regional network, including Indonesia, Singapore and Canada, have agreed on key principles of keeping transportation links and supply chains open to cushion the impacts of COVID-19 on global trade and economy.
Facilitated by Canada, the informal network called the International Coordination Group on COVID-19 (ICGC) consists primarily of half of the G20 countries — Brazil, France, Germany, Italy, Mexico, South Korea, Turkey and the United Kingdom — with the addition of Morocco, Peru and Singapore. It was recently established to look for a shared commitment to “promote and protect free trade” and other selected measures to tackle COVID-19.
The fresh declaration was made by foreign ministries of ICGC in a Friday evening teleconference, after it was deliberated at a recent senior officials meeting.
Going forward, Indonesian Foreign Minister Retno LP Marsudi said, any future cooperation “must be action-oriented” which would bring tangible benefits to the general public worldwide.
The declaration, despite its nature as a non-legally binding political declaration, aims at bolstering international norms and actions in handling the COVID-19 pandemic and to manage its social economic impacts. It identified a number of areas for concrete collaborative actions, outlining commitments to maintain an open flow of trade and investment, facilitate repatriation of stranded travelers, and to look for efforts to restore the post-pandemic global economy.
“We will continue to promote and protect free trade,” the ministers said in the declaration, as quoted from a press statement on Saturday. “[…] and we agree that emergency measures designed to tackle COVID-19, if deemed necessary, must be targeted, proportionate, transparent and temporary, and that they do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO [World Trade Organization] rules.”
Singapore’s Foreign Minister Vivian Balakrishnan said on Facebook on Saturday that the ICGC ministers had reiterated the importance of maintaining global connectivity, “such as transport and supply chain links, which will help all our economies recover more quickly when the pandemic eventually subsides”.
The WTO had sounded the alarm on Wednesday that global trade could plummet by a third this year due to the coronavirus pandemic, warning the deepest recession “of our lifetimes” could be on the horizon.
North America and Asia would be hardest-hit and could see their exports plunge by 40 and 36 percent respectively, while Europe and South America could see declines of more than 30 percent, the WTO said. Keeping markets open to international trade and investment would help economies recover more quickly, we will see a much faster recovery than if each country goes it alone.
Following the declaration, the ICGC would now strongly advocate for other countries to take similar steps, with South Korea leading a conversation on best practices for emerging from the COVID-19 crisis.
“The COVID-19 pandemic is a global challenge. Maintaining strong coordination with our international partners is critical to mitigate the repercussions of the ongoing challenges we face,” Canada’s Foreign Minister François-Philippe Champagne said in a statement. “Keeping people, goods and services moving is key in both addressing these issues and ensuring the transition to a strong recovery.”
Source: Article by Dian Septiari, The Jakarta Post, 19 April 2020
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