Trade Logistics

Bill Gain Global Product Specialist-Trade Logistics, Investment Climate

Trade Facilitation – A couple of definitions

“simplification, standardization, and harmonization of procedures and associated information flows to move goods from seller to buyer and to make payment.”

But also relevant:

“identifying and addressing bottlenecks that are imposed by weaknesses in trade related logistics and regulatory regimes and that prevent the timely, cost effective movement of goods.”

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Benefits of trade facilitation and logistics reform

Trade and Transport Facilitation provides important benefits:

– increase trade competitiveness through better logistics, border management, and availability of services for overall improved supply chain performance

– Result is better cash flow, lower risk, just in time delivery, and more market opportunities (volume and diversification).

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The import/export/transit process is complex

The average trade transaction involves 20 – 30 different parties, 40 separate documents, around 200 data elements (30 of which are repeated many times)

Parties have different objectives, incentives, competence and constituencies

Private sector also need to be part of the process

But Reform is not easy

Strategy for customs modernization

Human resources and organizational issues

Legal Framework

Integrity in Border Agencies

Managing risk in the clearance process

Redesign of Border and Customs Processes

Simplification and Harmonization

ITC Support for e-Customs and RM - ASYCUDA

A Few Trade Facilitation Components – Connectivity is Key

Source: DB database 2012, 2013

Efficient trade logistics – The critical link in effective trade facilitation

Distance

Logistics Costs(Value of Time & Service Charges)

International Jurisdiction

NationalJurisdiction

Collection, Marketing &Packaging

Inventoryof Semi-FinishedProduct

Land Transport

Port Handling& BorderClearance

Port Handling& BorderClearanceOcean

Shipping

Inland Transport

ProcessorWarehouse

Information Flow

Seller

In-house proceduresPoints of Interconnectivity

Changes in supply chain performance are realized through changes in:• In-house Procedures• Level of Interconnectivity• Regulation•Technology and systems• Infrastructre

The Private Sector Perspective

Simple and smooth processing of formalitiesA ‘seamless’ process (minimal intervention)Means to allow goods to proceed promptly to their final

destination. Standard forms, assembled into a ‘single bunch of

documents’, compatible with trade documents and transport contracts

Consistency & Predictablity of information, rules and procedures

Trade Logistics Product

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Objective

To help our clients create simple, efficient and accountable trade logistics systems and services that have a dramatic impact on economic development.

Expected Results and Impact Reduce the time & cost to trade, leading to increases in exports & savings to the private

sector.

40 – 60 % of time to import is related to document preparation and clearance processes.

Developing country average import time

DAYS

14 days

4 days

5 days

4.5 days

DOCUMENTS ASSEMBLY AND PROCEDURES

CUSTOMS AND TECHNICAL CONTROL

TERMINAL AND PORT HANDLING

INLAND TRANSPORT

Sour

ce: D

B 20

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Categories accounting for more than 40– 60% of the total time to export and import in many countries around the world.

Categories accounting for 40% or less of the total time to export and import around the world.

Documents & clearance Ports and transport

Emphasis on impact evaluation

Capital Carrying Charge

Cargo Loss and Damage

User Fees and Charges

Inventory Cost Savings

Capital Carrying Charge

Cargo Loss and Damage

User Fees and Charges

Inventory Cost Savings

Increases Export of … by …

Sub Saharan Africa 6.1%South Asia 5.8%East Europe & Central Asia 5.0%Middle East & N. Africa 4.1%East Asia and Pacific Islands 4.1%Latin America and Caribbean 3.5%OECD 1.7%

A 10% reduction export time

Impact on exports Impact on private sector savings

Source: Forthcoming research paper (Subramanian, Anderson and Lee (2012)

Global Trade Logistics Advisory Program Themes

• Simplifying & harmonizing trade procedures and documentation• Conducting legal and regulatory reforms• Integrating risk management systems into border inspections and clearance• Implementing electronic processing/automation and Single Window Systems

WTO Trade Facilitation Agreement

• Improving trade logistics in agribusiness supply chains• Bridging the gap between food production and food security by creating and linking growth nodes and

markets.• Streamlining NTBs and thus offering market access for key agribusiness products in client countries.

Agribusiness

• Improving border clearance, trade logistics systems and services at the regional level• Technical Control for the cross border movement of cargo including the implementation and mutual

recognition of international standards, accreditation and certification

Regional Integration

• Improving efficiency of cargo movement at ports, airports & dry-ports• Improving access for the private sector to invest in logistics and distribution services• Improving logistics and services along the supply chain and/or specific Value Chains

Trade Supply chain

Source: DB database 2012, 2013

Implementation Model

Rapid Response Program 10-12 Months

•Identifies and achieves quick wins that build trust and catalyze reforms•Establishes the basis for medium and long term reforms

Systemic Reform Program 1-2 Years

•Extends rapid response work and addresses key constraints•Promotes best practices for efficient trade logistics supply chains

Industry Competitiveness Program 2-3 years

•Building regulatory frameworks for modern logistics and distribution services•Improving food security & enhancing agribusiness competitiveness

Regional Program 3-4 years

•Eases access to regional and global markets•Provides solutions to land-locked, transit and island economies

Typical Engagement Program

Our clients

Trade Logistics projects in over 50 countries

Caribbean Region - St Lucia, Antigua & Barbuda, St Kitts & Nevis, Grenada, Dominica

Central America RegionEl Salvador, Honduras, Guatemala, Nicaragua, Costa Rica

Liberia, Mali, Burkina Faso, Guinea Bissau, Benin, Sao TomeWest Africa Region (ECOWAS)

SE Europe Region - Serbia, Albania, Bosnia Herzegovina, Kosovo, Macedonia, Montenegro

Armenia

Kazakhstan, Mongolia

South Asia Region - India, Bangladesh, Nepal

PhilippinesTimor-Leste

Chad, Central African Republic, Cameroon, Gabon

Egypt, Ethiopia, Rwanda, Kenya, Zambia

Columbia, Peru

Questions ?

Contact: wgain@worldbank.org