30 Aug CASA pushes digitalisation of shipping industry processes
- Highlights need for all border agencies to digitalise shipping approvals and documentation
- Waste of resources in submission of hard copies and physical attendance on vessels
In its publication in June 2022, titled ‘Global Economic Prospects’, the World Bank Group highlights effects of inflation, rising commodity prices, bottlenecks in global supply chains and financial conditions having an effect in the slowdown of global growth, which could have an impact on developing economies, which needs to come up with a strong and wide-ranging policy response to enable a sustainable growth, in order to reduce vulnerabilities.
Sri Lanka too is saddled with its own challenges and faces an uphill battle in overcoming perhaps the worst economic crisis it has faced since independence.
However, blessed with its strategic location amidst the key shipping routes to South Asia, the Far East and continents of Europe and America, the shipping and logistics sector remains optimistic and hopeful of positively contributing towards the efforts of reviving the country’s economy.
It would however need strong commitment to continuously improve on key focus areas in these efforts and trade facilitation-related efficiencies and process improvements can be definitely identified as one of them.
Simplification and modernisation
A major focus area of trade facilitation is the simplification and modernisation of the existing processes and practices between the various stakeholders such as border agencies, ports and terminals, etc. through digitalisation.
Measuring the impact of Trade Facilitation Agreements, the World Bank Group notes that a single day saved in global trade reduces the cost of traded goods by one percent and that the willingness to pay for such time reductions by the related stakeholders is estimated at US $ 210 billion per annum.
The report highlights the recent initiatives in several countries supporting trade and logistics facilitation initiatives in simplification of processes, which have resulted in reduced time for import/export and financial savings for the stakeholders.
Case studies and research show that countries in the Asia Pacific region, which have taken steps to exploit the use of digital technologies for cross-border as well as in local day-to-day affairs relating to trade processes, have provided great efficiency improvements for exporters, importers and other stakeholders in the logistics supply chains, contributing to their economies and strengthening competitiveness.
Higher predictability and speeding up of business processes coupled with transactional cost savings greatly benefits the trading communities whilst better revenue collections and compliance contribute towards the public sector. It is stated that countries as a whole, stand to attract investments and facilitate job creation and growth by reducing these trade-related delays and costs.
One such example appears in the success stories published by the World Trade Organisation (WTO) on the National Digital Trade Platform of Korea, highlighting the rapid growth of trade volumes valued at US $ 1.26 trillion by 2021. This is attributed to the successful implementation of initiatives in trade facilitation through Customs modernisation, the National Single Window (NSW), implementation of the Trade Facilitation Agreement and others.
It is common to note that Customs administrations become the focus when the subject of trade facilitation is discussed. Although the functions and activities of Customs administrations is an essential component towards facilitation, a view from a supply chain perspective helps to understand the various dependencies among other players, procedures and processes as well as linkages between these parties such as private sector traders, transport providers, service intermediaries and other regulatory bodies in the public sector.
This has resulted in many countries making efforts to exploit digitalisation in order to drive efficiencies through automation, simplification, paperless trade, electronic data interchange, cashless transactions, etc.
From a viewpoint of the Ceylon Association of Shipping Agents (CASA), there have been several positive initiatives and measures taken by the public sector in Sri Lanka towards the improvement of processes in the past.
Some of the highlights can be listed as:
- Customs facilitating the electronic submission of the Customs Declaration and settlement of Customs Duty online.
- Facilities made available to electronically submit inward sea cargo manifests to Customs and the Sri Lanka Ports Authority (SLPA), resulting in the reduction of paper-based documents submitted to Customs and the SLPA.
- Electronic data interchange between container terminals to exchange container data for loading, discharging and gate movements.
- Being a signatory to the Trade Facilitation Agreement of the WTO, which commits to expedite trade procedures.
- Implementation of a vessel payment platform by the SLPA
The COVID-19-related restrictions saw the industry reacting fast to come up with measures to embrace digitalisation to perform transactions reducing human touchpoints. The CASA worked closely with the SLPA and private terminals to agree on a process in relation to delivery orders/release of containers from terminals using e-documents. There were number of initiatives with Customs too, which assisted in the reduction of human-to-human interactions.
The CASA has hailed these efforts and have always played a supporting role in the successful implementation of such initiatives.
However, continuous improvement in this area is vital to sustain and increase Sri Lanka’s competitiveness.
For instance, the importance in the reduction of hard copy use in the cargo clearance activities and the vessel clearance applications at Sri Lanka Customs has been continuously highlighted by the CASA. Although most of the information required by the ship’s agents are submitted electronically, the need to use hard copies in parallel has resulted in duplication of effort as well as wastage of resources. This results in ship’s agents having to physically visit various institutions for clearance and other purposes affecting productivity. These activities, among several others, have immense potential to be further improved in order to save considerable time loss and costs to partners involved in shipping.
Regulations such as the Electronic Transactions Act have complemented digitalisation and paperless initiatives and practical implementation to benefit from such laws will augur well for the industry.
Measures such as the Logistics Performance Index uses timeliness, service quality, ease of international shipments, Custom procedures among others to benchmark and rank countries on areas to improve performance.
If one were to analyse the many success stories of trade digitalisation, countries with successful models today have had no easy passage in reaching their current state. These countries have evolved from relatively small offerings with limited scope to become comprehensive national projects and platforms encompassing all stakeholders, providing seamless integration to fulfil end-to-end business processes covering many activities of traders, shipping lines, forwarders, banks and the relevant government authorities.
We have seen a number of similar initiatives in the public sector of Sri Lanka, which are noteworthy.
- The establishment of a Trade Information Portal that provides traders with easy access to information about trade regulations and procedures in Sri Lanka.
- Sri Lanka Customs having announced plans for a new platform named ASYHUB, which aims to, among others, simplify and automate information exchange between parties and enable pre-clearance and allied efficiencies of cargo clearance.
- The SLPA is in discussions with the CASA to improve the cargo release process as well as provide better visibility on key information that would result in significant time and effort savings.
- The SLPA is also spearheading a project on a Port Community System (PCS)-related study and the CASA has fully supported this initiative and are engaged with several activities pertaining to it with relevant consultants.
- A project towards the implementation of a NSW, as its final outcome, involved all relevant stakeholders, including the CASA and reached a stage with a blueprint being developed for an NSW. Unfortunately, progress has been stalled and the industry is not clear of its current state and next steps.
The CASA is of the view that initiatives towards digitalisation and paperless transactions should be accelerated with all relevant parties coming together with clear outcomes in mind.
The report published by the UNCTAD titled ‘Review of Maritime Transport 2021’, identifies digitalisation as an essential element to measure the improvement of trade facilitation, contributing to a paperless environment and online transactions reducing time and costs whilst increasing transparency of stakeholders. It highlights that an efficient maritime trade and transport will depend on aligning and streamlining the various processes and continuing an uptake on digitalisation and automation of trade procedures such as Maritime Single Windows, which will be catalysts for growth in the industry.
Therefore, in conclusion, for Sri Lanka to stay relevant in the new digital world, it is vital that we adopt digitalisation, which would improve efficiency and ease of doing business.