Archives For Freight forwarder

American Shipper

This year’s American Shipper’s benchmark report examines the extent to which freight buyers rely on the art of negotiation versus the technological tools to refine the procurement process. It also looks at the background dynamics confronting procurement professionals to show why investment in technology is so important. Visit AmericanShipper.com – requires registration to download!

It’s not an option for shippers and 3PLs to ignore the data that’s washing over the logistics industry anymore. And respondents to American Shipper’s most recent Transportation Procurement Benchmark Study, The Art and Science of Buying Freight, recognize that as much as anyone.

Only one quarter of freight buyers feel their organizations are above average when it comes to procurement technology. Nearly half admit they are still using predominantly spreadsheets and email to conduct procurement across modes and regions. Two-thirds are still reliant on EDI. Source: americanshipper.com

Ms Nompumelelo Mboweni works as an Airfreight Import Controller at Bidvest Panalpina Logistics in Johannesburg [TT Club]

Ms Nompumelelo Mboweni works as an Airfreight Import Controller at Bidvest Panalpina Logistics in Johannesburg [TT Club]

The 2014 Young International Freight Forwarder of the Year (YIFFY) Award has been presented to South African forwarder Fortunate Nompumelelo Mboweni at the FIATA Annual Congress in Istanbul.

Each year at the FIATA Annual Congress the achievements of young freight forwarders from around the world are celebrated via an awards programme. TT Club is proud to have sponsored this award, now in its sixteenth year, since its foundation. The process of awarding the honour of Young Freight Forwarder of the Year (YIFFY) began earlier this year when entrants from all over the world submitted papers about a wide variety of transport and logistics projects.

These ranged from the transportation of tunnel drilling equipment to Bolivia to the delivery of a catamaran in Indonesia and from a project moving radioactive isotopes from South Africa to Namibia to the expedited deployment of a Disaster Assistance Response Team in the Philippines.

From this bewildering, yet highly professional array, the YIFFY Steering Committee selected a shortlist of four regional finalists. These four young professionals were then invited to attend the 2014 FIATA World Congress this week in Istanbul, Turkey to make a presentation on their dissertation topic.

The four regional finalists who proudly represented the future of the international freight forwarding industry in Istanbul were –

Africa/Middle East: Miss Fortunate Nompumelelo Mboweni, South Africa
Americas: Mr Douglas Whitlock, Canada
Asia-Pacific: Mr Saiful Ridhwan Bin Zulkifli, Singapore
Europe: Mr Christian Hensen, Germany

Following a comprehensive judging process, Ms Fortunate Nompumelelo Mboweni from South Africa was announced as the 2014 Young Freight Forwarder of the Year at the FIATA Congress’ opening ceremony on 13 October. Ms Nompumelelo Mboweni works as an Airfreight Import Controller at Bidvest Panalpina Logistics in Johannesburg. Andrew Kemp, TT Club’s Regional Director for Europe congratulated her and presented the award.

“I have been honoured as TT Club’s representative to be part of the selection process, and I personally was engrossed by the finalists’ presentations, which showed a considerable depth of understanding of their individual projects. I have to say all four finalists performed with flying colours at the recent final presentations; it was certainly a difficult decision to pick an overall winner. However, Fortunate prevailed and deservedly takes this year’s award,” said Kemp.

The award is presented in recognition of forwarding excellence and was established by FIATA with the support of TT Club to encourage the development of quality training in the industry and to reward young talent with additional valuable training opportunities. The TT Club has been a sponsor of the award since its inception and remains firmly committed to the importance of individual training and development within the global freight forwarding community. Source: TT Club

Avenida Marginal, Luanda, Angola

Avenida Marginal, Luanda, Angola

The current activity conducted by forwarding agents is not only limited to inter-mediating the foreign trade or deal with the clearance of goods at customs ports, said Tuesday the economist Osvaldo Luis da Silva.

Speaking to ANGOP on the role of forwarding agents in domestic economy, the economist spoke of the need for the agent to know the entire services chain of operators with whom they work. He stressed that the forwarding agents facilitate, through the service they provide, the relationship of importers and exporters with customs, tax offices, notaries, banks and other entities.

It is also their responsibility to observe and enforce the administrative requirements and law. On the other hand, said the expert, the forwarding agent is a guide or customs consultant for operators, who acts in the field of import and export and plays an important role in the economy.

He noted that these professionals have contributed to the increase in customs revenue and encourage the observance of customs procedures by operators engaged in import and export activity. Osvaldo Luis da Silva underlined that the Angolan Government updated the Customs Tariff to promote domestic production and sustainable economic development of the country.

The entry into force of this law does not cause any inconvenience to the work performed by the forwarding agents, he said. On the other hand, added the economist, the law has come at a good time and is satisfactorily facilitating their work. Source: Angola Press Agency

Related articles

Gorilla-weekinbrief-bigAn unusual cargo list has been released by DHL Express Sub-Saharan Africa of their 2013 deliveries.

In Kenya live human eyes are transported frequently. Sumesh Rahavendra, head of marketing for DHL Express Sub-Saharan Africa, said: “The corneas have an extremely short lifespan and are therefore highly perishable, which possess a significant challenge to us.

“What adds to the complexity is the fact that the recipient is booked and prepped for surgery while the cornea is in transit.

“The successes of these deliveries rely on prior customs releases, dedicated delivery vehicles and a passionate team of certified international specialists on the ground.

“When there is no margin for error and the result could affect another person’s opportunity for sight, every stop is pulled out from pickup to delivery.”

Rahavendra continued: “One unique shipment to mention is a 32kg consignment of Haggis which was moved from the UK to Tanzania for an event.

“The Scottish delicacy was swiftly transported through Customs and delivered in time for the prestigious event.”

For conservation, there was a transport of butterfly larvae in Kenya. Rahavendra said: “Any delay in the transport process would result in the premature hatching of the butterflies, from which they would not have survived. Following a similar operational process as the transport of the corneas previously mentioned, another successful, yet another unique delivery was completed.”

Another astonishing delivery was 1.7 tons of fresh flowers sent from Johannesburg to Douala in Cameroon for a wedding.

This personal request came from a customer whose two sons were getting married on the same day,” said Rahavendra.

“Fast forward a few short hours, and a splendor of colour was delivered to the event in time for the all-important nuptials.”

Other strange and prompt delivery requests included transporting nine gorillas across two continents, a specific heart internal defibrillator, the Rugby World Cup Webb Ellis trophy, and a customer’s laundry from the UK to South Africa for dry cleaning!

Rahavendra said. “Although sometimes challenging and stressful, such requests certainly help bring a smile to our faces on a busy day.” Source: APO (African Press Organization)

The fifth annual congress of the South African Association of Freight Forwarders (SAAFF) takes place on 8-9 October 2013 at the Hilton, Sandton.

David Logan - SAAFF

David Logan – SAAFF

David Logan, CEO of SAAFF says, “The freight forwarding market has been a major beneficiary of an increasingly globalised world economy. The significant year-on-year growth in international trade volumes has driven the evolution of the freight forwarder, inherently linked to the success of global trade and the development of new markets.  Against this backdrop, it hardly seems surprising that the congress continues to grow and attract robust debate from key players in the market.  This year’s event also receives the endorsement and support of the South African Express Parcel Association (SAEPA), which represents the multi-billion Rand South African courier industry, another major role player in facilitating global business.”

“Having long-abandoned the image of transport intermediaries, today’s freight management logistics providers manage an array of complex functions and issues, being responsible for an entire array of services within the supply chain. The two-day congress will highlight and debate many of the pressing issues from customs modernization, security, piracy, supply chain efficiencies, trade credit, risk management, political risk, legislation, FAIS, economic trading factors, transformation, training and in-demand skills and more.”

“Our industry is also in a unique position to tap into the incredible growth currently shaping the African continent where some of the fastest growing economies reside.  Added to this the rapid reconstruction and development projects taking place throughout the continent will rely heavily on the services of freight forwarders.  Africa’s abundance of commodities is estimated to generate about a third of Africa’s growth.  All this requires trusted partners in the movement of goods to facilitate global trade, and the forwarders best positioned to capitalise on this are those that have robust infrastructures, global capability, solid expertise and a deep understanding of trade in African countries, which is not without its fair share of risk,” adds David.

“Global pressures on world markets are impacting on our members and the congress is an ideal platform to really get to grips with the realities and challenges of our current trading environment.  It’s an ideal platform for sponsors and suppliers to engage directly with the senior decision makers of freight forwarding companies, government, suppliers and policy makers,” he concludes.

Running alongside the congress will be a two-day industry supplier exhibition as well as a one day training and education workshop on Tues 8 October covering important issues regarding skills development, industry qualifications, talent management, training, BBBEEand more – all critical issues for HR managers and directors in the freight forwarding industry. For more information about the congress or to book your seats contact the congress organisers, Teresa Settas Communications on (011) 894 2767 or e-mail nadine@tscommunications.co.za. Source: transportworldafrica.co.za

services_import_SnapseedActually, this is a view from the Ukraine. In modern practice, the organisation of the transport process often necessitates direct international multimodal transportation, in which case the freight forwarder carries out the contract of carriage as a multimodal transport operator, even if it does not directly own any vehicles. However, a trend has arisen in which the functions of the carrier and forwarder are combined. Under this model, traditional carriers diversify their activities by creating a forwarding unit within their companies, or forwarding agents acquire vehicles or create dependent carriers. Furthermore, forwarders often hire subcontractors to undertake the shipment; as a result, cases of loss or shortage of goods and claims against forwarding agents can become quite complicated. 

General provisions

Ukrainian legislation does not provide detailed rules governing freight-forwarding activities. The Law on Freight-Forwarding Activities, the Civil Code and the Economic Code stipulate only the general regulations of freight forwarding.

In accordance with Clause 1 of the Law on Freight Forwarding Activities, the contract of freight forwarding is a contract in which the freight forwarder agrees, at the client’s behest, to perform or arrange for the performance of certain contract work related to the transportation of goods. The forwarding agent is entitled to engage other parties for the execution of certain work under the contract (eg, transportation, storage, loading and unloading).

The law includes only general provisions under which the freight forwarder may be held liable to the customer (unless provided otherwise in the contract) for:

  • the number of packages;
  • the weight of the packages (if the weighing was conducted in the presence of the carrier and confirmed with its signature); and
  • packaging requirements under the related shipping documents (signed by a representative of the carrier).

Issues regarding the forwarder’s liability are also governed by the general provisions of the Civil Code, which provides for liability for breach of obligations under the contract. Thus, Article 623 of the code provides that a debtor in breach of its obligations must compensate the creditor for losses caused.

Where the freight forwarder engages third parties to fulfil its obligations under the contract of freight forwarding, the forwarding agent will be held fully responsible for the actions and omissions of the third parties.

Ukrainian law lacks specific rules that directly limit the freight forwarder’s liability to the client. Detailed rules governing the forwarding agent’s liability to the customer, as well as grounds and limitations of such liability, are fixed by the parties in the contract of freight forwarding.

At the same time, Ukrainian legislation contains general rules that allow for the release of the freight forwarder from liability. In accordance with Clause 614 of the Civil Code, a party that has violated its obligations will be held responsible only if found guilty (intently or negligently), unless otherwise agreed in the contract. Disputes in connection with claims against freight forwarders for loss of cargo in transit are common in Ukraine, so there is ample case law in the area. However, since Ukrainian legislation provides only general provisions on the freight forwarder’s liability, court practice for such disputes is often ambiguous and contradictory. In particular, there have been separate cases with similar circumstances in which the court variously found the freight forwarder both liable and not liable for cargo loss in transit. Continue Reading…

BackhanderTwo Japanese freight forwarders have agreed to pay a total of $18.9 million in criminal fines for their role in a price-fixing scheme, according to the Department of Justice (DOJ).

Over the course of at least five years, Yusen Logistics Co. and “K” Line Logistics Ltd. conspired to fix freight forwarding fees, including security fees and fuel surcharges, on air cargo shipments from Japan to the U.S., the Department of Justice (DOJ) said. The two are just the latest in a string of 16 freight forwarding companies that have agreed to plead guilty to price-fixing and pay criminal fines totaling more than $120 million.

“Consumers were forced to pay higher prices on the goods they buy every day as a result of the noncompetitive and collusive service fees charged by these companies,” Bill Baer, Assistant Attorney General of the DOJ’s Antitrust Division said in a statement. “Prosecuting these kinds of global, price-fixing conspiracies continues to be a top priority of the Antitrust Division.”

The DOJ seems to have been successful in pursuing that priority. In the 2012 fiscal year, the antitrust division collected a record-breaking $1.35 billion in criminal fines, nearly 60 percent of which came from Asia-Pacific-based companies. Source: Insidecounsel.com

Mobile-scanner installed at Apapa Port as part of DI contract

Mobile-scanner installed at Apapa Port as part of DI contract

Destination Inspection takeover – it seems that all is not well. A stand-off between officers of the Nigeria Customs Service (NCS) and members of the freight forwarding community is festering over trade facilitation issues. The  long association between officials of the Nigeria Customs Service (NCS) and big time freight forwarders, including association leaders may have gone sour. THISDAY checks at the ports revealed that most leaders of freight forwarding associations are on the warpath with the Customs. The agents are aggrieved over what they described as high handedness on the implementation of trade policies by the Customs. They alleged that the Customs has in a bid to meet revenue targets embarked on measures that will force most traders who are mainly their clients out of business.

It is lead to believe that made some leaders of customs agents associations work against the Customs Service concerning the take-over of Destination Inspection from agencies handling the project. The Federal Government had extended the contracts of the Destination Inspection Agents (DIAs) by six months at a time that the Customs had prepared to take over the scheme. Customs had trained about 2000 officers for the scheme. The Service, it was gathered had also planned to inherit the scanning machines from the DIAs before the contract was extended. Indications are that the contracts may be further extended by more than one year at the expiration of six months. Since the extension was announced, many leaders of customs agents have not come out openly to condemn it.

Bone of Contention – When the NCS failed to introduce duty benchmark at the ports last year, the relationship between the it and freight forwarders has changed.Customs issues Debit Note (DN) to recover what is lost due in terms of under-valuation, this has often been abused as importers and their customs agents negotiate what to pay with some of the valuation officers responsible for this. So, the management of the Customs believed that the only way to address this problem was a duty benchmark which saves the importer. The idea of the benchmark was to check revenue losses as a result of under-valuation of goods coming into the country. However, the benchmark arrangement was dropped on the order of the Presidency. Since then, the Service has adopted other means to ensure that no revenue is lost, a development that has angered the clearing agents.

Duty Targets – With a revenue target of N1trillion last year, the Customs had worked hard to ensure that it meets its revenue target. The Service realised about N800bn. Freight forwarders are bitter that so many containers have been abandoned by their owners at the ports due to high-handedness by the Customs in terms of outrageous DNs on the goods. A member of National Association of Government Approved Freight Forwarders (NAGAFF) told THISDAY that the amount being issued as DN is such that many importers have been unable to pay. A top official of NAGAFF who did not want to be quoted said that it appears there is a grand plan by some officials of customs to frustrate some importers out of business by issuing outrageous DNs. “In some cases, the DN is such that the importer will be at total loss after clearing the goods. We have appealed to the management of the customs about this thing, but their officers have failed to come down on the value placed on these goods. Source: This Day (Nigeria)

confidentialAn interesting and pertinent issue has been raised in the social media area on the ‘confidentiality’ of carrier information submitted to Customs. In this particular regard it relates to the practice of the US Customs and Border Protection Agency. One blogger commented “It’s kind of ironic in the U.S. for example that importers/consignees are required to submit a request to customs to opt-in to keep manifest information confidential.”

CustomsNow, a direct filing solution for US traders relates “As a common practice, importers and consignees may submit a request to US Customs, pursuant to 19 CFR 103.31, to keep manifest information confidential.  Our previous blog post on this topic  includes several tips to ensure these requests result in the broadest degree of confidentiality.”

Recently, importers and consignees who have submitted confidentiality requests have complained to CBP that confidential shipping data — party/shipper/consignee name and address — for ocean freight have nevertheless been disclosed to the public.  After reviewing the matter, Customs has determined that “improper data entry” was the cause.  To avoid this, CBP advises in a recent CSMS publication, when filing e-Manifests in ACE, “the commercial party name fields must ONLY contain commercial party name data.”  Otherwise, “…the name of the party stored in the ACE database is corrupted because it includes address data. This inaccurate party name data fails the confidentiality edits resulting in confidential business information being shared publicly. This inadvertent disclosure is tied directly to the way in which data is transmitted by users.” Additional information can be found in CBP’s CSMS #13-000064.

In South Africa, and I’m sure a great many other countries too, one just has to accept that the Customs authorities will secure such information, because they say its safe. Read the link below – cause for concern.

Port Technology International (PTI) reported last month, a ground-breaking technological development from UK-based Inscentinel could change the future of security at ports. In a move that brings together nature and technology, bulk cargo screening could soon be carried out by an unlikely source – sniffer bees.

Freight forwarding companies screen 100 percent of all of their parcels. The first line of screening relies on X-rays followed by REST dogs for special items which cannot be screened. REST, stands for Remote Explosives Scent Tracing.

This works by sampling the air from the cargo through a specially designed filter. This filter, which can trap explosives molecules, is then presented to the most accurate explosives detector ever – dogs. This method has proven very effective to exploit the accuracy of dogs while maximizing the throughput volume of screening, which a free-running dog cannot otherwise do.

According to the information found on the website of Diagnose, a subsidiary of ICTS: ‘The technique has screened over 100,000 trucks and pallets and over 1.5 million metric tons of air cargo since live operations began in the UK and France. The RASCargO™ technique was specially developed to serve the mass screening cargo market that requires a solution for screening high volumes of dense cargo, with actually, no cargo size limitation, a solution that combines high detection rate with cost effectiveness.’ Read the full report as published in PTI here!

Inscentinel’s latest video, below, shows how the company has devised an ingenious way of using the insect in the cargo screening process. 

The following piece suggests that the realisation of AEO obligations on shippers is real and will be augmented by support systems that may marginalise the highly competitive freight forwarding industry.  While there is a suggestion of cost savings due to non-reliance of shippers on traditional forwarding agents, I believe this is a short-sited view as the ‘real challenge’ lies in whether or not shippers are up to the task in meeting these obligations given their unfamiliarity with customs and transport requirements. I see many shippers having to recruit experienced customs and forwarding experts to maximise their compliance given the burgeoning obligations materializing in international shipping!

In October 2011, Aircargoshop an online booking portal provided shippers the possibility to book their own airfreight without involvement of the traditional shipping agent via the online portal Aircargoshop. This is a development that might have important consequences for the closed airfreight industry. As a consequence the online booking portal offers a lower-priced, more efficient and more transparent process for aircargo booking.

Founder Paul Parramore of Rhenus Logistics suggests that this system will bring down the cost of airfreight by as much as 50%. The Dutch Shipping Council EVO, gave the system the thumbs up and said that it will revolutionise the manner in which the freight business is currently being conducted.

Joost van Doesburg, a consultant with EVO said that in the long run restructuring of the industry is necessary in order to meet the challenges of the 21st century. Many of the forwarders will lose out, but the system is geared towards cost effectiveness and being competitive. He also added that if the forwarder is to add value to the supply chain, then he has to comply to adapting to the system rather than working against it.

On the home front, a recent article featured on the website Freight into Africa reports that the South African Cross Border Transporters Association (SACBTA) will be introducing a similar system which is currently under development for the cross border road freight industry. It will be called “ROAFEonline” or shortened form of Road Freight online which will allow the customer to book directly his freight with accredited SACBTA members hence cutting out the middleman and brokers.

All payments can and will be done online and this system will integrate with SARS EDI (Would like to hear more on this!). The consignor will only have to ensure that his goods are loaded onto the truck, the rest will be done by the system. The cost per transaction to the customer will be a paltry R100.00 in relation to a few thousand Rands normally swallowed up by the middlemen.

Based on our estimations a regular consignor can save up to R3-5 million Rands per annum which hopefully will be passed onto the consumer. With the looming integration of the SADC countries towards one stop clearing, it makes sense to further integrate the system. So whether you are in Dar es Salaam or Lubumbashi, you can now book your freight from Cape Town without having to go through a string of brokers. You also have the assurance that your cargo will be loaded by an accredited SACBTA transporter who complies to the standards set out by SACBTA. It will facilitate consolidations as any accredited transporter will at any given time be able to see what cargo is available. If Transporter A has only 20 tons, he can check which other transporter on the system has another 8 tons to Dar es Salaam for example. The transporters can then consolidate a load on the system which will happen in a shorter period of time than say for instance waiting a month to fill a tri axle.

This system will have many other functionalities that have been incorporated like online tracking, bar coding, which will give the consignor and consignee piece of mind knowing at any given time where their cargo is. It will also be accessible to border agents and customs officials who will be in a position to extract vital information on any consignment long before it actually gets to a border.

The system will go into testing around March of this year and if all goes well should be ready for implementation by the latter part of 2012 or early 2013. We hope that this will go a long way towards restructuring the industry for the better. It has long been the desire of SACBTA to allow industry players to come on board to create a better industry. However, there has been very little interest shown in transforming the industry and we feel this system will by virtue of its nature, transform the industry whether industry players are willing participants or not. Source: Freight into Africa and various own sources.

TT Club, the international transport liability insurer, is warning that freight forwarders and other transport intermediaries face increasingly significant liability risk, particularly in emerging markets, as they take on additional supply chain services for their customers. TT Club specialises in the insurance of liabilities and equipment for multi-modal operators.

Traditional freight forwarders, who have seen the opportunity to offer extended warehousing, packaging, delivery fulfilment and even purchasing functions for shippers are not always fully aware of the liabilities for cargo loss and third-party damages that these additional tasks are opening them up to, according to Andrew Kemp, European regional director of the TT Club.

He told the Cargo and Freight Insurance Annual Conference in Moscow that as supply chains continue to develop to supply emerging markets, where the cargo owners are not always willing to invest in distribution infrastructure, the out-sourcing of such tasks will proliferate.

This could bring significant new business opportunities to companies, which had previously limited their service offerings to freight forwarding and the organisation of international transport, but these additional procedures could be complex.

“A typical new type of activity would be the packaging, for the local retail market of an item with a sales promotion attached (price discount or two for one offer). This task is straightforward in itself but brings with it risks of errors and possible damage to the items. This would be something not experienced by transport operators in the past,” he said. Source: Logisticsmanager.com

Customs Connect 2The year 2011 has proven both challenging and beneficial for many in the South African Customs community. New business opportunities offered via the Customs Modernisation Programme materialised and provided the service providers ample scope to improve their service offerings to clients in the freight forwarding and clearance space. Leveraging off tried and tested technology tools already employed by SARS in the Tax business, the implementation of E@syScan provided significant efficiencies in the customs clearance processing response times, although the jury is still out on whether such efficiencies have in fact translated into cost-savings for the customs trade. In this regard it is up to trade itself to assess if the traditional cost of printing reams of paper and employing a runner to deliver manual documents to Customs is significantly reduced by the new electronic supporting document process. Could be an interesting exercise.

On the SARS front, the implementation of a new automated case management, and inspection workflow is nothing short of a revelation in so far as traceability and improved efficiency. Similarly, such efficiency needs to translate into cost savings. Certainly there are less manual interventions in the process, the emphasis now moves to working more smartly as regards the booking and conducting of physical inspections. True this has been a huge learning curve for all. Refinements and fine-tuning of the process moving forward will undoubtedly release the expected results to the point where most will wonder how they ever managed in ‘manual mode’ in the past.

To close off the year, SARS has just published its second edition of its electronic Customs bulletin – Customs Connect. Please take the time to read and digest.

Customs and logistics users will in particular find the featured survey of interest, if not important. International Logistics encompasses an array of essential activities — from transport, warehousing, cargo consolidation, and border clearance to in country distribution and payment systems, involving a variety of public and private agents. The Logistics Logistics Performance IndexPerformance Index (LPI) and its indicators are a joint venture of the World Bank, logistics providers, and academic partners.The  LPI is a comprehensive index created to help countries identify the challenges and opportunities they face in trade logistics performance. 

The 2010 LPI points to modest but positive trends in key areas such as customs, use of information technologies for trade, and investment in private services. The LPI is a multidimensional assessment of logistics performance, rated on a scale from one (worst) to five (best). It uses more than 5,000 individual country assessments made by nearly 1,000 international freight forwarders to compare the trade logistics profiles of 155 countries. Germany and Singapore receive the highest ratings in the 2010 LPI with scores over 4.08. South Africa ranks 28th on the list with a score of 3.46, one position behind China (3.49), but 11 and 18 places better than Brazil (3.20) and India (3.12), respectively.

The LPI covers the performance of countries in six areas that capture the most important aspects of the current logistics environment:

  • Efficiency of the customs clearance process.
  • Quality of trade and transport-related infrastructure.
  • Ease of arranging competitively priced shipments.
  • Competence and quality of logistics services.
  • Frequency with which shipments reach the consignee within the scheduled or expected time.

One of the features of the LPI includes indicators of border procedures is the time taken to complete trade transactions.  Although this  is a relatively small fraction of total import time, such time increases significantly when goods are physically inspected. Core customs procedures converge strongly across all performance groups, but physical inspection—and even multiple inspections of the same shipment by different agencies—are much more common in low performance countries. The report moreover suggests that border agencies other than Customs tend to constrain the clearance process and ultimately the costs imposed on the private sector. 

Ever since the inception of automation in Customs (circa 1981) it has offered time-saving benefits and obviated several mundane tasks. Like all things new, improvements are lauded and soon forgotten as quickly as the novelty wears off. With each improvement more ‘operational knowledge’ is translated into software code, aiding the user, but unwittingly depriving future users of fully understanding the logic behind it all.

Let me provide an analogy –

20 years ago most broker’s classified supplier’s invoices for appropriate tariff, computed currency conversion, value for duty purposes and duty calculation all manually. Similarly, Customs officers verified each declaration according to the supporting documents presented. True this was resource intensive and time-consuming, and hopelessly inefficient by today’s standards and expectations. On the plus side, the brokers and customs officials had a greater appreciation for the detail and technicalities involved in clearance processing. Another benefit of the past was the accessibility of the customs officer.

After 2 decades of computerised enhancements the technicalities around customs clearance have been made easier through significant automation of workflows and communication. Most brokers nowadays offer transport and logistics services and have clearly evolved into international freight forwarders. The introduction of the Customs duty deferment scheme has also long been recognised by most brokers and forwarders as a critical component of the financial viability of their business.

In fact, the nature and focus of the trade and customs business have themselves shifted drastically in the last 10 years. Company boardrooms are more about strategy and tactics, and the IT division plays more and more an operational role rather than purely a support function. This is often the bain for the operations division which fails to realise that ICT is an ally not and enemy. This short-sightedness is also the cause by which the system is often blamed for operational shortcomings.

It is therefore clear that procedural enhancements, revised business practices along with computerisation have all lead to a conglomeration of miscellaneous ‘detail’ which seemingly daunts the user. The computer is able to process millions of lines of code and perform instructions across the physical boundaries which make up the different organisational divisions and data stores. In the past human intervention gave effect to physical processes through manual activities with hand-offs from one division to another; today, thousand’s of instructions are triggered by a few swift keystrokes by an operator, where sophisticated algorithms filter and distribute data, perform calculations, risk assessment and account management. Computerisation also enables activities to occur in parallel, whereas a manual process normally follows sequentially. Because the eye does not see these things the user/operator is unaware of the sequence or complexity of the processes being accomplished. Because there is perhaps more idle time today, the expectation is that things need to happen in seconds, not hours or days. And so, service levels are defined with these expectations in mind with onerous penalties for non-delivery. (Okay, Customs is indemnified against the latter!)

In the light of the above and a review of the recent weeks of activities leading up to the implementation of the first phase of the Customs Modernisation Programme, it is abundantly apparent that the state of preparedness needs to look at a variety of areas, not just those which affect the computer operator (customs officer or trader).

The diagram is intended to illustrate the effect of Customs Modernisation on the local trade community. In terms of technical ICT developments, Customs need only interact with the 16 service providers. These in turn have the responsibility to provide systems and systems support for their 3000 or so brokers and freight forwarders. However this obligation can only impart systems knowledge. The brokers/freight forwarders must, over and above the systems enhancements, be able to articulate and understand these changes in a tangible manner. Why, because these affect not only their legal obligations under the law but their service offerings to their clients – the importers and exporters. This is where I perceive there is some gap or lack of capacity rather. There are indeed excellent thinkers in this industry, but alas too few, and these few have fulltime day jobs as well. A change of the current magnitude requires a dedicated team of knowledgeable practitioners who (on a fulltime basis) should not only challenge the law makers but make constructive alternatives. It is difficult to maintain focus on this if the participants are all volunteers.

Lastly, those thousands of importers and exporters are soon to realise that the impending new Customs Act has a whole bag of goodies for them too! While the umbrella organisations have always had the intent to provide training, this requires capacity as well. The recent joint training initiative between SARS and Stakeholders was undoubtedly a first, but must not be the last. Moving forward it is imperative that similar joint ventures occur, with increasing frequency and more detailed training content and materials. There is more than enough room for all of us (SARS and Trade) to make an impact. This is the bigger picture!