ICT in Trade Facilitation: Expediting Cargo Movement & Customs Clearance February 2014 The Trident Group, LLC

Sub-Saharan Africa could boost its annual GDP by $15 billion if time spent in Customs clearance is cut by 50%. Additional $20 billion could be realized each year by improving transport infrastructure, getting goods into/out ports in half the time it currently takes. If implemented, the combined effect would be even larger. Source: International Trade Centre (ITC) Imperative for Action:

Inefficiencies in the Supply Chain: High incidence of physical inspection by Customs (limited data to support admissibility decisions ) Poor cargo arrival, discharge & release planning Manual handling of import/export processes Limited regional cooperation & border mngmt Entry/Exit Points: + Seaports + Airports + Borders Inadequate transport network... poor state where exist (road, rail, waterways) Poor cargo & asset transit monitoring Underdeveloped regional transport corridors Transportation providers are not well organized Inland Transportation & Logistic Systems Inadequate/inconsistent policy regime (e.g. ETLS) Limited enforcement of trade regulations/practices High incidence of sharp practices & non-compliance Regulatory Environment & Compliance

Existing Infrastructure Community EconomyInfrastructureEnvironmentGovernance Enablers: Factors & Impact Trade & Logistics T echnology PolicyOrganization Adapted from: “Understanding Smart Cities: A Integrative Framework,” Chourabi, et al. (2012) FastSurgingSlow Rate of Change Economy Environment Governance

Improving Trade & Logistic Efficiency Port Community System Cargo Community System Electronic Exchanges (Single Window) Truck Control System Inland Transport/Corridor Management Freight Traffic Management System Customs Screening System Transit Access Monitoring Risk Targeting & Import Compliance Systems + Process Trade Documents + Improve Visibility + Improve Trade Services + Eliminate Congestion + Manage & Control Assets + Manage, Track Cargo Movement + Improve Security + Enhance Import Compliance + Expedite Trade & Cargo Clearance …one component at a time

Port Access Control: Congestion Mitigation Truck Parking, Gating & Movement Systems Cargo Movement: Transit Tracking & Monitoring Border Transit & Regional Corridor Management Freight Traffic Management:

Infrastructure Realities:

 Began operation in late 2005  Proven intermodal solution designed to optimize landside movement of cargo to/from ports and border crossings  Enable port to “organize the chaos” around terminals & port gates – creating a more efficient movement of cargo  Interfaced with Customs, Terminals, Ministry of Transport etc  TCS now mission-critical for logistics and trade communities  The Freight Traffic Management System leverages the available information from multiple port stakeholders to:  Capture cargo status & truck movements/schedules  Perform validations for logistic data  Automate decisions such as truck dispatch & terminal access  Provide cargo tracking & chain-of-custody  Capital investment $20m; annual operating cost $4m  Operated under a PPP Agreement with ASEZA NAFITH : National Freight Information & Transportation Hub

 Manages 24-hour freight transport operations for ports, terminals & Free Trade Zone  Controls movement of trucks from 5 entry points on road network reaching 39 specific destinations including 13 terminals  Over 200 trucking companies and more than 15,000 trucks use the system daily  Several truck parks with capacities varying from 150 to 500 trucks  Thousands of concurrent users requesting permits & receive instructions from the system  Extends use of existing infrastructure at terminals (APM) & other destinations incorporated into TCS  Uses low-cost RFID/GPS to collect data & monitor truck/rail movement  Improved regional border transit & monitoring through document harmonization: Jordan-Syria, Jordan-Saudi, Iraq-Kuwait Port Access & Border Transit Control System (Jordan)

Nafith TCS Jordan Customs (ASYCUDA) Ministry of Transport Trucking Companies Truck Drivers Gate Operations Container Terminal Operators ASEZA Provide registry of trucks and trailers by company and cargo type (XML) Provide Cargo releases (XML) Provide other releases for cargo pickup, e.g. fuel, bulk Apply for permits (equipment, cargo, operation, route, driver, and other data) Receive approval Receives entry ticket from trucking company Receive permit with all details on operation Oversee movement of trucks through ASEZ Receive instructions from TCS Provide event data to TCS Use TCS to validate & schedule container pickup operations Validate data Approve permits Capture events Manage capacity Provide reporting and alerts Support invoicing Stakeholder Integration & Information Exchange

NAFITH: Efficiency Gains Improved Efficiency/Productivity:  Eliminate congesting around port, terminals & access roads  Minimizing wait times for trucks and drivers  Increased truck turns and cargo carried/truck/year  Increased rail asset utilization  Reduced pollution and wasted diesel Better Managed Activities:  Providing terminal and yard operators with advanced information on planned and in-progress truck/rail operations  Providing freight forwarders with better information on cargo delivery status Better use of Limited Infrastructure  Spread loads over time  Push sources of delay and chaos away from congestion  Monitor operations & react to unexpected delays/emergencies Increased Logistic Visibility & Data Collection:  Extend control and visibility for public and private stakeholders  Capture detailed operational data to support planning, investment & policy actions

INTERNET Truck/cargo status Billing/payment info Request entry & route Return Permit Number Provide Permit Number Verify truck, driver, route, cargo Provide paper permit with routing instructions Track truck enroute & waiting yards Record cargo pickup at terminal Record truck exit TCS IT Platform NXFTMS™ Government of Jordan Regulatory compliance and status reports Trucking Company Management Trucking Company Dispatchers TCS Operational Schema

Truck Park

Entry / Exit Control

 Significant infrastructure deficit  Many users had no prior IT experience  Limited/sometimes unreliable communication & internet service  No comparable system in use  Measurable productivity & investment returns for trade & transport sectors  Multiple stakeholders benefited Worked in a Developing Economy:

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Case Study: Common Consignment Note  A customs transit document which can be issued electronically or on paper.  Example of a regional trade facilitation agreement in action.  Information required for transit and receiver countries are included on the common consignment note when issued at origin.  Successful pilot of transcontinental rail freight shipment from China to Germany – 11,000KM distance in 18 days.  Time spent at border crossings can be significantly reduced with corresponding reduction in transport cost.  Idea can be extended to ECOWAS leveraging the successful regional transit corridor model in the Middle East.

NAFITH: Enhancements NAFITH has developed new services around the core process for TCS;  Dispatching for oil tankers, ferry and other distinct transport operations  Logistics management for bulk cargo, grains discharge and delivery  Electronic marketplaces for truck freight to and from terminals  Empty container management framework  Integration with Weighbridge for axle weight enforcement  Integrated vehicle & cargo tracking services with virtual routing using mapping & location based services (LBS)  Mobile interfaces using customized cell phone apps  E-Payment & E-Waybill services  Expanding operations to Kuwait and Iraqi ports and border crossing for grain movement

Trade Information Gateway, Real-Time Exchange: Pakistan Initial areas of focus:  Karachi Ports access control  International transit corridor management (Afghan-Pakistan)  Electronic marketplaces for truck freight to/from terminals  Nationwide databases of registered equipment, drivers and companies  Integrated vehicle and load tracking services with virtual routing management  Mobile interfaces using customized cell phone applications

Risk Targeting, Risk Profiling & Screening for Import Compliance  Facilitate Trade & Expedite Import Clearance  Increase Revenue Through Better Valuation  Detect Import Violations & Misdeclarations  Improve Security to support WCO- Safe Framework

Automated Risk Targeting & Import Screening Risk Targeting Solution (RTS) automates the processes needed to objectively evaluate risks, vulnerabilities, threats, assumptions and uncertainties about cargoes arriving at our ports and borders Provides Customs agencies at Ports (Sea & Air) & Border Crossings with ACTIONABLE information used in determining which cargo should be manually inspected or cleared. The RTS is designed to provide inspectors with uniform, actionable information needed to: Facilitate Trade & Expedite import clearance by reducing manual inspection (dwell-time) Improve the detection of declaration fraud and import violations Increase volume of products reaching markets at lower cost Improve Security through enhanced threat/vulnerability assessment capability to support the WCO Safe Framework Improve Revenue through enhanced valuation

RTS – Applicability to Customs Environment The RTS Solution is designed to find violative products, facilitate trade, increase revenue and improve supply chain security Leverage Open Source and other intelligence to find risky products before they arrive in country (Pre-Arrival Intelligence) Separate high from low risk imports to give entry reviewers more time to evaluate the higher-risk lines and automatically “may proceed” the low risk imports Evaluate each entry line-item on the basis of a wide range of risk factors derived from a wide set of data sources Provide automated queries to multiple databases and integration with third party data sources Produce a consistent applicable agency-wide entry examination process Tightly integrates with Customs systems like ASYCUDA etc Operational Framework:

Analytical Breadth:  Statistical analysis of importer & exporter combination  History of involved parties: manufacturer, shipper, origin, transit info, consignee etc  Cross references with external trade databases  Open source intelligence about Customs fraud  Expert intelligence from Customs field offices  Geospatial analysis of addresses and locality  FOB value analysis for improved fraud detection  Purposeful errors in filed information  Data anomaly analysis of value to quantity ratio  Correlation with other elements on the declaration form  Seasonality of product  Text mining of declaration contents  Identification of multiple importer identities

External PartiesScienceRegulatoryOperations Customs Brokers Importers Office of Science Office of Regulations & Policy Entry Reviewers Facility Inspectors Labs Field Examiners Import Declaration Forms & Supporting Documents Decisions FACTS Field Activities & Compliance Tracking System Entries & Line Items Line Items Facilities Samples Science- based rules General Info- based rules Field Experience- based rules Static, Disjoint “Pass”–“Hold” Decision Rules PREDICT Risk Targeting System NXRTS Risk Targeting & Profiling Example: Automates processing for risk screening and targeting CUSTOMS ASYCUDA Other Systems

 Reduction in manual/secondary inspection Fewer items are held for inspection  Significant reduction in cargo “dwell time” at ports of entry  Improvement in revenue collected by customs  Enhancement in valuation process and fraud detection  Higher number of violations found: Increased detection of risky cargoes and import violations  Significant reduction in false positive hits  Higher productivity for custom personnel Same number of inspectors can process higher number of entries  Tighter collaboration between customs & other agencies  Enormous return on investment for the agency Saved $M per year in operational cost Operational Impact:

Conclusions & Paths Forward  Intelligent Trade & Logistics Systems multiplies impact of other investments and efforts  Time is right – ICT infrastructure now in place  High impact & Low cost  Rapid deployment  Addresses a range of challenges in developing regions

 Delivers solutions to automate & accelerate Trade, Logistics, Security and other verticals to improve operational efficiency  Serves several US agencies and other national/regional governments & regulatory authorities  Deploys & manages logistic operations in US, South Asia, Middle East & Latin America. Our operations;  Captures & analyzes data on over 80% of global container cargo movement  Supports operational risk targeting, surveillance and enforcement of imports involving over 20 million transactions daily for Customs & regulatory agencies  Monitors & manages over 3000 truck operations daily for 200 trucking companies in a 375 sq. km. area around a seaport to mitigate congestion, facilitate cargo clearance, track inland freight movement & border crossings  Support air cargo screening for US Transportation Security Administration About Us:

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