The WCO and the World Trade Organization (WTO) held a webinar to launch their joint publication on Customs use of advance technologies. The event attracted more than 700 attendees and provided insights into how advanced technologies can help Customs administrations facilitate the flow of goods across borders. The publication titled, “The role of advanced technologies in cross-border trade: A customs perspective” provides the current state of play and sheds light on the opportunities and challenges Customs face when deploying these technologies.
The publication outlines the key findings of WCO’s 2021 Annual Consolidated Survey and its results on Customs’ use of advanced technologies such as blockchain, the internet of things, data analytics and artificial intelligence to facilitate trade and enhance safety, security and fair revenue collection.
The joint publication highlights the benefits that can result from the adoption of these advanced technologies, such as enhanced transparency of procedures, sharing of information amongst all relevant stakeholders in real time, better risk management, and improved data quality, leading to greater efficiency in Customs processes and procedures.
In his remarks, WCO Deputy Secretary General Ricardo Treviño Chapa said, “Technologies will assist implementation of international trade facilitation rules and standards, such as the WCO Revised Kyoto Convention and the WTO Trade Facilitation Agreement. We are therefore delighted to be partnering with the WTO, to ensure that our work in assisting our Members’ digital transformation journeys is complementary, that we bring all relevant partners to the same table, and that we avoid duplication.”
In her opening remarks, WTO Deputy Director-General Anabel González noted, “Advanced technologies offer customs an opportunity to take a big leap forward on trade facilitation. Take blockchain. Its widespread application could help us make trade both more transparent and less paper intensive. That would reduce trade costs, which is good news for everyone, especially small businesses, which are disproportionately affected by red tape at the border.”
The webinar presented the main findings from the WCO/WTO paper and featured presentations by Brazil, Nigeria, Singapore and the Inter-American Development Bank. For a greater uptake of these technologies, the speakers underlined the importance of continuous sensitization of Customs and other stakeholders, the need for interoperability and implementation of international standards, the relevance of engaging in dialogues at international level, as well as having a strategy and space for innovation and testing at national level.
The WTO has launched a new book entitled “Trade in Knowledge: Intellectual Property, Trade and Development in a Transformed Global Economy” on 31 March. At the launch event, a wide cross-section of contributors to the publication discussed how their research and analysis had a bearing on current issues lying at the intersection of development, trade, technology and the diffusion of knowledge.
Drawing together insights from a diverse range of leading international scholars and analysts, the publication explores how to build more inclusive, up-to-date and precise ways of measuring knowledge flows, discusses how more nuanced and effective use of these data may guide policymakers and provides insights into the prospects for knowledge-based social and economic development, moving legacy models and adapting to the realities of the contemporary knowledge economy. The book also proposes ideas for updated systems of governance that promote positive sum approaches to the creation and sharing of the benefits of knowledge as a public good, with a view to informing planning for development.
Blockchain may one day eliminate inefficiencies and lack of transparency in supply chains. While slow in coming, this revolution would benefit not only customers and brands, but the “invisible” workers who power global trade.
In this episode of Bloomberg’s System Shock, we explore how cumbersome, paperwork-bound supply chains—like one stretching from kitchen refrigerators in Europe and the U.S. all the way back to a small farmer in Ecuador—are being transformed by that most modern of technologies.
Traditionally, every year, the Customs community comes together on 26 January to mark International Customs Day. This day of celebration is a unique opportunity for WCO Members, the WCO Secretariat and global Customs’ partners to reflect on a particular theme and to act upon it.
Thus, throughout 2022, under the slogan “Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem”, the Customs community will be focusing on how to operate in a fully digital environment and create an operating model that captures and exploits data from across the trade ecosystem.
Over the years, digital technology has evolved rapidly and Customs can now tap into data from other government agencies, commercially available databases, and open-source information platforms such as digitized global public records and multilingual news sources.
The extent to which data can be used effectively depends on various factors surrounding data ethics, including privacy, commercial secrecy and legal issues regarding the use of data by Customs and Tax administrations, and the importance assigned to innovation in public administrations.
To build data ecosystems, or consolidate existing ones, the following enabling actions may be considered:
establishing formal data governance to ensure the relevance, accuracy and timeliness of data;
making use of the standards developed by the WCO and other institutions regarding data format and data exchange;
providing appropriate management of data to ensure that the right people have access to the right data, and that data protection regulations are respected; and,
adopting progressive approaches, such as data analytics, to collect and successfully exploit data to drive decision-making.
A robust data culture empowers people to ask questions, challenge ideas and rely on detailed insights, not just intuition or instinct, to make decisions.
In order to nurture a data-driven culture, administrations need to enhance the data-literacy of their staff – in other words, their ability to interpret and analyze data accurately.
Customs administrations should integrate data science into their curriculums for newly recruited officers and participate in the development of distance learning courses to familiarize Customs officers with the collection and analysis of data in order to forge a data-driven culture. Staff also need to understand the bigger picture, namely the impact of Customs on the effective protection of society, trade facilitation and fair revenue collection.
On the other hand, Customs administrations are invited to consider leveraging data in their relationships with other actors along the supply chain, as well as making data available to the public and academia as a means of enhancing transparency, stimulating the production of knowledge and enabling dialogue with civil society.
Sharing data analysis with other government agencies increases the role and visibility of Customs in policy-making and in obtaining necessary resources, including donor funding. Disseminating Customs data and information in society is part of governments’ response to the general demand for open governance.
To support Customs administrations, the WCO Secretariat has placed data-related topics on the agendas of several committees and working groups, organized awareness-raising seminars, developed e-learning modules, drafted a Capacity Building Framework for Data Analytics which was adopted by the WCO Council in December 2020, issued practical publications and published articles in the WCO News Magazine.
Moreover, a community of experts has been established, under the name of BACUDA (BAnd of CUstoms Data Analysts), which brings together Customs and data scientists with the objective of developing data analytics methodologies.
The Secretariat will continue to investigate ways to collect and share data on Customs administrations with a view to enhancing the way it delivers capacity building, and will continue to undertake data-driven assessments and work with international experts to respond to assistance requests.
More measures will be presented in the WCO Data Strategy that the WCO Secretariat is currently working on. The ambition will be to make data a vernacular language among Customs administrations and between the WCO Secretariat and WCO Members. The road ahead is not an easy one, there will inevitably be challenges along the way, but as we have learned during the COVID-19 pandemic, the Customs community is united, stronger and more resilient in the face of adversity.
Former SpaceX engineers banded together to create a new startup looking to make electric and autonomous railway vehicles to revolutionize rail-based freight transport. They have a big task ahead of them.
The railway business is a tough one to break into. It’s a static oligopoly dominated by a few giants sitting on their railroad rights and making minimal investments to maximize profits.
Over the years, railroads were privatized in North America, and the businesses have no issues closing smaller railroads. They often close smaller railroads when they can’t find a way to make money off of them and focus on the most profitable routes with longer trains – often as long as 3 miles.
Despite those issues, freight trains have remained a good solution since they are about four times as efficient as trucks. But, with trucks expected to become electric and autonomous in the coming years, they are going to close the efficiency gap with trains.
Now Matt Soule, a former long-time SpaceX engineer, has partnered with former colleagues at Elon Musk’s space company to launch a new startup, Parallel Systems, developing new electric and autonomous vehicles.
The company just raised $50 million in a Series A funding round and came out of stealth mode with an article in Fortune. The idea is to create small autonomous electric-powered rail vehicles that can enable a different way to use railroads.
As for the vehicle itself, Parallel Systems vehicles can carry 128,000 pounds, which is more than twice the capacity of a semi-truck. The vehicles have a range of 500 miles on tracks and can charge in about an hour.
Visit Elecktrek’s webpage for the full article and related media.
Customs authorities are age-old institutions whose missions have been subject to numerous changes over time. Historically, the main role was to levy customs duties, which, in other words meant collecting resources for the benefit of local authorities. Today, customs performs many other functions, from securing national borders, recording import and export trade and prevention of fraud and illegal trade activity.
From the customs authority’s perspective, there is a constant focus on finding innovative technology and new methods and techniques to become more effective on risk assessment and inspection of the goods circulating across their borders. At the same time, customs authorities must examine the consequences these changes will have on trade, avoiding the creation of additional burden and obstacles for industries and entities involved in the exchange. Adopting flexible technology is often key for meaningful strategic transformations.
More quality data with accuracy and speed
Each country has its own policies for operating border control when goods arrive or depart from their territory. Most of these policies work from systems built off a central repository, powered by data collected from different sources. Time and effort are often spent in sorting and cleansing data from these various sources but disconsonant data can still create confusing outcomes when analyzed.
While globalization gives an incentive to operate in an open market, the increased amount of trade activity also conceals illicit activities that must be supervised by customs authorities, such as tax evasion, drug traffic or smuggling. It is in the best interest of the entire industry to cooperate, allowing data sharing to flag the early recognition of risky trade transactions.
Receiving data related to the supply chain activities prior to and during the transportation process can assist authorities, supporting them to pinpoint risky elements on international trade. Data validation across various trade and transportation documents allows authorities to manage detailed risk assessment processes and is enhanced with access to earlier and more granular information.
Providing government authorities with access to upstream transport data is one of the features of TradeLens. On the platform, customs authorities have access to data related to their countries from the moment a booking is placed with a carrier. Updates on documents from different data sources and transportation milestones are shared in near real-time.
Additional data is not only a way to make sure that accurate risk assessments are being made, but it can also help decrease the burden placed by the bureaucracy related to importing or exporting goods. Increasing the accuracy of the inspection of goods, can enable authorities to focus their resources on the most important targets and improve trade documentation processing for reliable shippers, truckers and carriers. Enhancing global trade and the upstream exchange of information can drive growth and prosperity for the entire ecosystem.
Doing more with less
While many technologies and platforms exist in the marketplace, organizations are often constrained by limited public resources that must be utilized wisely. TradeLens does not aim at replacing existing systems but enhancing them with additional data from the supply chain. The TradeLens Platform provides a forum for authorities to run pilots and test innovative solutions in a true end-to-end shipment lifecycle.
In order to contribute to the logistics operations of the entire ecosystem, customs authorities can send notifications related to their inspection and release activities to TradeLens. This information will be made available in near real-time to all the players involved in the shipment and permissioned to see the data.
To mark International Customs Day 2020 – focusing on the theme of ‘fostering Sustainability for People, Prosperity and the Planet’, the following article from the Spring 2018 edition of World Trade Matters by Jan Hoffmann, the Chief of the Trade Logistics Branch, Division on Technology and Logistics at UNCTAD, is relevant. The article discusses global trade facilitation reforms, the digitalisation of trade and measures towards ensuring long-term sustainability in the maritime industry.
Confronted with growing populism and a surge in protectionist measures recorded by the WTO, policy makers and enterprises are struggling to avoid a backlash in international trade. At UNCTAD’s Trade Logistics Branch, we support these endeavours by helping to make trade work better. Through trade facilitation reforms, the promotion of digitalisation, and ensuring the long-term sustainability of international transport, we aim at ensuring that the international movement of goods is not confronted with unnecessary obstacles and costs.
A multilateral agreement to facilitate international trade
Under the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO), developing countries commit to implement a number of very practical measures that make trade easier and more transparent. Countries are obliged to publish duties and procedures on the web, traders can transmit their declarations prior to the arrival of the goods, payments can be made electronically, and fees and charges must not become hidden taxes to generate income for the government. These are but some of the 37 concrete measures grouped into 12 Articles of the TFA. They are all useful and help make trade more efficient.
However, many of these measures involve an initial investment or reforms that require human and financial resources to start with, which developing countries many not have. The good news is that the TFA also includes a novel mechanism – the so called “Special and Differential Treatment” – that helps developing countries plan and acquire the necessary capacity prior to being fully committed to comply with all 12 Articles. Concretely, the mechanism puts the developing countries in the position – and obligation – to analyse and notify their own implementation capacity. At UNCTAD, we are working closely with the developing countries to enable them to do so. Our main counterpart in this endeavour are the National Trade Facilitation Committees (NTFCs) that each country must set up under the TFA. UNCTAD’s Empowerment Programme for NTFCs includes training and knowledge development for the members of the NTFC, combined with advisory services and the development of a Roadmap of TFA implementation.
By the same token, UNCTAD also supports developing countries in setting up Trade Information Portals. Under the TFA, members of the WTO are obliged to make relevant information on tariffs and trade procedures available on-line. UNCTAD’s Trade Information Portals not only help countries become compliant with this obligation, but in the process of analysing and publishing applicable trade procedures, a Trade Information Portal effectively helps countries identify the potential for the further simplification of procedures. Thanks to these new insights, NTFCs can then develop programmes and reforms that subsequently ensure the further simplification of procedures.
Technological progress will never be as slow as today
My favourite provision of the TFA is Article 10.1., as it provides for a dynamic dimension of the Agreement. According to this article, countries need to minimize “the incidence and complexity of import, export, and transit formalities”, continuously “review” requirements, keep “reducing the time and cost of compliance for traders and operators”, and always choose “the least trade restrictive measure”. As such, even if a country is compliant with all TFA provisions today, countries will need to continue monitoring if existing procedures are still appropriate in view of technological or regulatory developments.
As trade becomes increasingly digitalised, and new technologies which do not yet exist will be developed, it will be important that governments continuously revise and review the applicable rules and regulations.
Digitalisation comes in stages. First, we optimize existing procedures, making use of cargo tracking, the Internet of Things, blockchain et al. Second, new businesses are developed which could not exist without the new technologies; new platforms come into being and we see more “uberisation”. Finally, there is transformation and science fiction; still in our lifetime Artificial Intelligence will overtake human capabilities to manage international trade and its logistics.
But let us take one step at a time. At UNCTAD, we support developing countries through eTrade readiness assessments, the development and upgrade of technological solutions in Customs automation and Single Windows, and by providing a Forum for our members to analyse and discuss the challenges that come with digitalisation. We encourage the development of global standards that allow for interoperability among new systems. The challenge for policy makers it to encourage private sector investments in new technologies and solutions, while ensuring that no new monopolies emerge that might exclude smaller players.
And it has to be sustainable
While we aim at ensuring continued growth in international trade, there is a catch. The transport of this trade encompasses increasing externalities, such as pollution, green-house-gas emissions, and congestion.
Ports need to minimise social and environmental externalities. Many port cities are among the most polluted places to live, as ships burn heavy oil, and delivering trucks produce noise and cause traffic congestions. In addition, ports need to be resilient in the face of disruptions and damages caused by natural disasters and climate change impacts.
International transport, including shipping, needs to play a larger role in addressing global warming and contribute to mitigating the carbon emissions that are causing climate change. Shipping emits less carbon dioxide (CO2) per ton-mile than other modes of transport, but then due to its sheer volume it also produces many ton-miles. Would it be possible that the industry could be charged by its main regulatory body not per ship tonnage (as is currently the case), but per tonne of CO2 emission?
Currently, the International Maritime Organization is funded proportional to the tonnage registered under the members’ flags. Like this, Panama, Marshall Islands and Liberia pay for the largest share of the IMO budget – and in the end, this is passed on to the ship-owner, who in turn passes this on to the shipper, who will charge the consumer. This is a good established mechanism that could be expanded to also internalize the external costs of CO2 emissions.
Being the most globalized of all businesses, maritime transport should consider adopting a global regime that helps further internalize its environmental externalities – to ensure prosperity for all.
It is all about efficiency
Investing in trade facilitation reforms, making intelligent use of the latest technologies, and ensuring that externalities are internalized are all several sides of the same coin. Trade efficiency is necessary to promote an open international trading system. It requires a continuous effort by policy makers to continuously review current procedures, apply the most appropriate technological solutions, and support an efficient allocation of scarce resources.
Source: Jan Hoffman, UNCTAD – originally published in World Trade Matters, Spring Edition, 2018
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.