The global supply chain landscape is constantly being changed and reinvented by technology and digitalisation. Innovations are removing paper-based processes, increasing efficiencies, and creating new opportunities. Trade facilitation is also evolving with new technologies being developed and spreading across the globe, with borders becoming more digitised than ever. This change has been captured by the WCO’s theme for 2019, which holds even more now as we advance in the future. The slogan chosen for 2019 is “SMART borders for seamless Trade, Travel and Transport.” In Africa, as with the rest of the world, SMART borders are becoming a common occurrence.
How is technology changing the international trade landscape?
Technology is changing the international trade landscape in ways we would not have imagined a decade ago. Blockchain, cargo tracking, digital trade, online processes, e-payments all change how we think about and approach international trade. In addition, technology and online platforms are bringing people together that would otherwise never have been able to connect, creating new and exciting business opportunities around the globe.
The internet of things has improved tracking for air cargo. For example, Bluetooth Low Energy (BLE) tags and readers make it possible to track cargo movement through the air cargo logistics chain, like RFID (radio-frequency identification) tags, although at a lower cost. These technologies are essential for the shipment of high-value or cold chains (such as pharmaceutical goods or fresh produce) . BLE tags can transmit GPS coordinates, vibrations, humidity, and temperature in real-time, ideal for tracking temperature-sensitive and fragile cargo.
The International Air Transport Association is also working on an initiative to create an “end-to-end digital logistics and transport supply chain where data is easily and transparently exchanged in a digital ecosystem”.
Blockchains allow for information to be stored, authenticated, and transacted online. Furthermore, the data is decentralised and connected through an encrypted chain, which means that the data cannot be tampered with or altered, reducing the risk of missing data or corruption, as everything is on record. Cryptocurrencies such as Bitcoin and Ethereum are based on the same concept.
The World Trade Organisation (WTO) estimated that digitalisation could reduce the cost of trade in the Sub-Saharan Africa region by as much as 1.3%. This reduction is because the cost of communication has fallen drastically with technologies such as fibre and wireless internet, allowing people to connect via emails and phone calls instantly at a low cost (compared to the cost of international calls in the early 1930s). Furthermore, the number of people with mobile phones are increasing daily, meaning that people are becoming more connected to online platforms and electronic payment systems.
Customs processes are also being secured and simplified through automated procedures (SWS and AEO), electronic certificates, and electronic cargo tracking systems. These processes allow for the faster clearance of goods and reducing the time and cost of moving goods across borders.
What are SMART borders?
The SMART borders concept encourages WCO members to delve into the realm of technology to find solutions to facilitate the flow of people, goods and conveyances at borders while following the guiding principles for SMART borders: Secure, Measurable, Automated, Risk Management-based, and Technology-driven. With the diverse customs approaches and procedures, and the variety of different technologies available across the world, SMART borders may look quite different to different countries and regions across the globe.
An excellent example of a SMART border reaching their full potential is the Maasvlakte II, one of the world’s most advanced fully automated container terminals and the largest in Europe. The container terminal has automated most port operations, with only approximately 15 people working at the terminal throughout the day. Containers are loaded, discharged, and moved via battery operated automated guided vehicles (AGV) which are navigated with large trans monitor antennas and a remote navigation computer. Furthermore, the terminal runs with automated Ship to Shore cranes (STS), Automated Stacking Cranes (ASC) and the terminal further installed an automated self-service desk process at the terminal gates that reduced the average truck turnaround time by 20 minutes.
What do SMART borders look like in Africa?
Several African countries have taken strides towards SMART borders with ePassports and Biometrics for automated border control in terms of the movement of people. For example, through Vision-Box, Rwanda implemented the first Automated Border Control in Africa, while Lebanon is issuing biometric driving licenses to expedite services.
The Kazungula One-Stop Border Post connecting Botswana and Zambia opened in May 2021, which promises to improve traffic flow between the two countries that were previously reliant on pontoon boats to ferry trucks across the Zambezi River. Along with the OSBP, the bridge also includes a railway track for future development. Furthermore, the first phase of modernising the Beitbridge Border Post is nearing completion. The US$300 million project aims to establish Beitbridge as a “world-class commercial hub”, with new ICT systems that will allow for automated queuing and payment systems. The South African Revenue Service is also piloting a Number Plate Recognition System at Beitbridge as part of a customs modernisation programme, aiming to improve truck turnaround time and combat corruption, among other objectives.
In East Africa, the Regional Electronic Cargo Tracking System (RECTS) is a web-based system that provides revenue authorities in Rwanda, Kenya and Uganda with a harmonised platform to monitor transit cargo. This approach not only allows revenue authorities to track cargo movement and curbing dumping but also allows for interventions that ensure the safety of both the cargo and truck drivers transporting cargo through the region. The programme is planned to roll out in the DRC and South Sudan as well.
Single Window Systems and AEOs?
A Single Window System is a system where traders and other supply chain role-players can upload their customs-related documents, where all government agencies can then access the documentation relevant to them. This innovation –set up in early 2000 in few early adopting countries such as Ghana, Singapore, Senegal – removes the need for traders to submit several copies of similar or the same documentation individually to each of the different government agencies involved in the process as is shown in the figure below. Ideally, a SWS is an online platform where traders can upload documents without taking physical copies into the relevant offices. In light of the pandemic, going digital with the submission of customs-related documents has become increasingly important. It is also an important trade facilitation tool. Moreover, it improves clearance times, transparency and predictability of processes, enhances compliance and reduces corruption, and overall improves productivity, to name a few benefits.
Figure 1 – SWS Evolution
The Authorised Economic Operator (AEO) Program aims to facilitate the movement of goods through customs by reducing red tape for trusted operators. This approach facilitates trade, allowing traders with a proven track record to move goods across a border with reduced time and cost. The WCO lists 62 benefits of AEO Programmes, including expedited cargo release, lower storage cost, priority treatment, reduced (or no) physical inspections, and participation in new trade facilitation programmes and initiatives.
Figure 2 – Risk transfer through Customs-to-Business principles (AEO)
Source: Maree, 2021
AEOs and Single Window Systems are two trade facilitation measures or approaches that can be implemented in tandem with digitalisation. This implementation can reduce the cost of implementation over a more extended period as implementation now only needs to happen once, instead of creating a manual Single Window System and then digitalising it. Many countries across Africa have started implementing both the AEO Programme and Single Window Systems, which shows that Africa is coming to the party, so to speak, and highlights opportunities for further growth and harmonisation.
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