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AfricaFrom time to time it is nice to reflect on a good news story within the local customs and logistics industry. Freight & Trade Weekly’s (2015.11.06, page 4) article – “SA will be base for development of single customs platform” provides such a basis for reflection. The article reports on the recent merger of freight industry IT service providers Compu-Clearing and Core Freight and their plans to establish a robust and agile IT solution for trade on the African sub-continent.

In recent years local software development companies have facilitated most of the IT changes emerging from the Customs Modernisation Programme. Service Providers also known as computer bureaus have been in existence as far back as the early 1980’s when Customs introduced its first automated system ‘CAPE’. They have followed and influenced Customs developments that have resulted in the modern computerised and electronic communication platforms we have today. For those who do not know there are today at least 20 such service providers bringing a variety of software solutions to the market. Several of these provide a whole lot more than just customs software, offering solutions for warehousing, logistics and more. As the FTW article suggests, ongoing demands by trade customers and the ever-evolving technology space means that these software solutions will offer even greater customization, functionality, integration and ease of use for customers.

What is also clear is that these companies are no longer pure software development houses. While compliance with Customs law applies to specific parties required to registered and/or licensed for Customs purposes, the terrain on which the software company plays has become vital to enable these licensees or registrants the ‘ability to comply’ within the modern digital environment. This means that Service Providers need to have more than just IT skills, most importantly a better understanding of the laws affecting their customers – the importers, exporters, Customs brokers, freight forwarders, warehouse operators, etc.

Under the new Customs Control Act, for instance, the sheer level of compliance – subject to punitive measures in the fullness of time – will compel Service Providers to have a keen understanding of both the ‘letter of the law’ as well as the ability to translate this into user-friendly solutions that will provide comfort to their customers. Comfort to the extent that Customs registrants and licensees will have confidence that their preferred software solutions not only provide the tools for trading, but also the means for compliance of the law. Then, there is also the matter of scalability of these solutions to keep pace with ongoing local, regional and global supply chain demands.

The recent Customs Modernisation Programme realised significant technological advances with associated benefits for both SARS and trade alike. For the customs and shipping industry quantification of these benefits probably lies more in ‘improved convenience’ and ‘speed’ of the customer’s interaction with SARS than cost-savings itself. My next installment on this subject will consider the question of cross-border trade and how modern customs systems can influence and lead to increased regional trade.

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Zimbabwe temporarily shut down its border with South Africa in Beitbridge yesterday after a Zimbabwe Revenue Authority (Zimra) warehouse caught fire. Impounded goods worth millions of dollars went up in flames in the inferno. The blaze exposed Beitbridge’s lack of fire preparedness with officials having to ask South Africa to help. Beitbridge town has no fire engines. To view Video of Customs Warehouse on fire in Beitbridge – click here!

Second Southern African border post inferno in a week.

The fire started shortly after 5PM and caused a power outage at the busy border post, Zimbabwe’s gateway to its biggest trade partner, South Africa. The warehouse was used to keep smuggled goods such as television sets, electrical gadgets, blankets and groceries whose customs duty value was estimated at just over $1 million by the spokesperson for the Beitbridge Civil Protection Unit, Talent Munda.

Munda said the cause of the fire was yet to be established although it was suspected that it could have been caused by an electrical fault.

“The fire destroyed property worth $5 million and the cause is not known for now. When the incident occurred, there was no-one inside and it was locked. Most of the goods that went up in smoke were smuggled goods and those impounded by Zimra and nothing was recovered as everything was burnt to ashes,” said Munda.

Stanbreck Horita, a Harare truck driver who witnessed the incident, said the blaze resulted in border authorities temporarily suspending movement of travellers.

“I had parked my truck at the Zimra yard waiting for my vehicle to be cleared when fire started and everyone was scurrying for cover as the raging fire started spreading. It destroyed the entire building,” said Horita.

Another witness, Dumisani Mudau, a clearing agent, said: “I was busy processing papers for my clients when I heard people raising alarm and the next thing everyone was rushing to the scene where there was a huge fire at the Zimra warehouse. The fire was spreading fast such that even when fire fighters arrived at the scene they could not contain it.”

Buses carrying travellers who were bound for either South Africa or Zimbabwe were delayed as a result of the fire. Beitbridge town secretary Loud Ramakgapola said they had to collaborate with the National Oil Company of Zimbabwe (NOCZIM) who sent their fire trucks to the border post.

“We tried to send our tenders to the border post but unfortunately our fire fighters could not contain the fire because it was too strong. The other problem is that there are no fire hydrants at the border making it difficult to deal with such disasters,” said Ramakgapola.

Fire fighters from South Africa’s Musina Fire Station arrived shortly and teamed up with their local counterparts in trying to put out the fire to no avail. Ramakgapola said Beitbridge had no fire station and the local authority relied heavily on Musina Municipality (South Africa) in the event of similar disasters.

“Beitbridge is a very busy border post which handles a huge influx of travellers especially as we approach the festive season. We therefore need a proper fire station in Beitbridge so that we’re able to deal with such situations. This is wake up call and we need to look into that issue as a matter of urgency,” said Ramakgapola.

Beitbridge border post is the busiest inland port of entry in sub-Saharan Africa, handling an average of 10,000 travellers daily and the number doubles during peak periods such as the festive season. Source: southafricalatestnews.co.za

Related articles

warehousingThere is growing evidence that HM Revenue & Customs (HMRC) has begun a campaign to target warehouse keepers and hauliers who may unknowingly be handling excise goods on which the duty has yet to be paid.

And the United Kingdom Warehousing Association (UKWA) is warning that any company found guilty of storing goods on which duty is outstanding could face ‘financial ruin’ – even if the storage company was unaware that duty had not been paid.

“While HMRC has had the authority to assess anyone for duty on goods illegally diverted from bonded movements who was ‘aware or should reasonably have been aware’ of the diversion at any point in the supply chain since 2010, action has been spasmodic,” says Alan Powell of Alan Powell Associates, UKWA’s honorary adviser on Customs & Excise Matters.

“However,” he continues, “HMRC is deploying more officers to investigate excise goods supply chains. As a result, we are now increasingly seeing third party service providers, including hauliers, warehouse keepers and lessors of property, such as barns and outbuildings, being penalised by HMRC as a result of their involvement with businesses that have evaded duty on alcohol and have absconded – so called ‘missing traders’.”

Anyone found to have held or dealt in duty-unpaid excise goods, can be fined up to 100% of the duty evaded, as Alan Powell explains: “HMRC had been slow to apply what are called ‘excise wrong-doing penalties’ but are now vigorously applying them.  As a result, many small and medium companies are facing unexpected bills and penalties from HMRC of hundreds of thousands of pounds.”

Allan Powell continues: “In simple terms, if an organisation has been involved at any stage in the supply of goods that have been illicitly diverted from a bonded supply chain, that  organisation could be liable for duty – even if that organisation is not directly responsible for the diversion.

“Essentially, anyone handling duty-unpaid product is classed as being ‘contaminated’ within the supply chain and assessed for the duty.”

In one particular instance, a storage company is facing a duty bill alone for nearly £100,000 after HMRC inspectors found duty-unpaid alcohol stored at the company’s site.

“The storage company was simply unaware about the risks involved in handling loads of duty un-paid alcohol and the director of the company to whom they leased the space has disappeared,” says UKWA’s chief executive officer, Roger Williams.

The message from Alan Powell and UKWA is that if you offer third party logistical services of any kind, you must check what is being handled or stored – do not take storage requirements on face value.

Alan Powell says: “Always be wary and query the business need, checking out with HMRC if possible.  If in any doubt, do NOT become involved – it could end very badly.” Source: www.ukwa.org.uk.

Read a followup article by – UKWA :Don’t be fazed by HMRC move (Lloyds List)

Oliver Reginald Tambo International Airport (east of Johannesburg) to become Africa's first aerotropolis

Oliver Reginald Tambo International Airport (east of Johannesburg) to become Africa’s first aerotropolis

The Gauteng Provinicial government has announced that Africa’s busiest airport, OR Tambo International Airport is set to become the location for the continent’s first aerotropolis. Work on the development of the aerotropolis, centred at OR Tambo International Airport, seeks to leverage public and private sector investment at the airport and surrounding areas. In supporting industrial development in this precinct, approval has been granted for the creation of an Industrial Development Zone (IDZ) in the area surrounding the airport. Heard this all before, but what’s different this time around?

An aerotropolis is an urban plan in which the layout, infrastructure, and economy is centered around an airport, existing as an airport city. It is similar in form and function to a traditional metropolis, which contains a central city core and its commuter-linked suburbs.The term was first proposed by New York commercial artist Nicholas DeSantis, whose drawing of a skyscraper rooftop airport in the city was presented in the November 1939 issue of Popular Science.The term was revived and substantially extended by academic and air commerce expert Dr. John D. Kasarda in 2000, based on his prior research on airport-driven economic development. Wikipedia

Jack van der Merwe, who successfully oversaw the development of the Gautrain project, has been appointed to lead the initiative of developing the aerotropolis. The proposal for the airport to become a terminal city with air, rail and road networks fuelling economic development. It is envisaged to include a commercial component, hotel, conferences, exhibitions and a residential component.

One of the key initiatives of the national government is the e-Thekwini-Free State-Gauteng freight and logistics corridor, known as the Strategic Infrastructure Project 2 (SIP2), which seeks to improve the movement of goods from the Durban port to Gauteng, and to business enterprises nationally as well as in southern Africa.

City Deep/Kazerne cargo terminals and the planned Tambo-Springs Freight and Logistics Hub are to be the focal points for the movement of goods for the export market. Phase 1 of the City Deep/Kazerne Terminal expansion and roads upgrade was underway at the continent’s largest and busiest in-land container terminal. This includes a redesign and upgrading of the roads network in and around the City Deep Terminal to provide for better flow of freight traffic and linkages with the national highways – the cost of the road works would amount to R122 million. At some point the issue of non-tariff barriers to import/export trade will need to be discussed…..and overcome.

Transnet has completed the first phase in the actual improvements of the terminal. It will be investing R900 million in upgrading the terminal. A detailed road design work, including feasibility studies and the development of a master plan, are underway for the Tambo-Springs Inland Port. Now, we’re talking…….

Gauteng  Province is to get 2 484 new modern trains as part of the Passenger Rail Agency of South Africa (PRASA) rolling stock for fleet recapitalisation and refurbishment programme.

The province will be making major investments in road infrastructure in the coming financial year and these include reconstruction and upgrading of the R55 (Voortreker Road) to a dual carriageway road between Olievenhoutbosch and Pretoria West; rehabilitation of the remaining section between Main Road and Maunde Street in Atteridgeville; reconstruction and upgrading of William Nicol Drive (K46) between Fourways and Diepsloot as well as reconstruction and improvement of the remaining section of the Old Pretoria to Cullinan Road between the Chris Hani Flats and Cullinan, among others. Wow, and the toll fees?

The department has been allocated a budget of R4.77 billion for the 2013/14 financial year. Of this amount R1.4 billion has been earmarked for roads maintenance and upgrading, R1.7 billion for public transport operations and R802 million for the running cost of the Gautrain Management Agency. Source: EngineeringNews

So, all-in-all, the above together with other recent noises of incentives and benefits for foreign and local investors in SEZs, the future holds some promise and interest…..

Globalization of the Supply Chain: Here’s one for the warehousing, logistics, and distribution folks. Aberdeen Group’s survey of 191 companies explores how new investments in internal and external collaborations across the global supply chain are now the highest priority for the Chief Supply Chain Officer (CSCO’s). This podcast looks closely at these initiatives as well as:

  • Specific trends and highlights of the research.
  • Strategies and best practices utilized by CSCO’s.
  • Increased globalization/complexity balanced by the need to drive down supply chain costs.

 Click the HEREto visit Aberdeen Group’s website and download the podcast now.

 

Its been a while since I penned some comment on the customs modernisation programme in South Africa. Amongst the anxiety and confusion there are a few genuine ‘nuggets’ which I would hope will not go unnoticed by the business community. With stakes high in the area of business opportunity and competitiveness, such ‘nuggets’ must be adopted and utilised to their fullest extent. Lets consider two such facilities.

The widespread implementation and adoption of electronic customs clearance has allowed brokers to file declarations for any customs port from the comfort of their desks. Brokers can now consider centralised operations especially for customs clearance purposes. Likewise the withdrawal of the annoying goodwill bond should also come as a welcome decision. Hopefully this may translate into cost-savings over time.

As of 11 August 2012, the business community will also be glad to learn that imported goods which do not fully meet all national regulatory requirements can be entered into bond on a warehouse for export (WE) basis. While this may not sound like anything new, the provisions which come into effect, will accord the identical treatment of such goods as if they were being entered for warehousing. In short the new provisions will allow more flexibility with the ability to re-warehouse WE goods; the ability to change ownership on WE goods; and the ability to declare WE goods for another customs procedure.These provisions can be considered a relaxing of the original approach which mandated compulsory exportation. All government regulatory requirements (i.e. permits, certificates, etc.) will however be strictly enforced upon clearance of WE goods for home use or another customs procedure. The apparent relaxation forms part of ongoing alignment of customs procedures with the Customs Control Bills, which are in the process of finalisation.

For those who have enquired about the followup to the national transit procedure, I have not forgotten about it. The ‘touchy’ nature of the subject requires a mature and fair response. Please bear with me.