Financial Times

Automated Cargo Clearance will cut import, export goods costs

By Dr. Asoka N. Jinadasa,
Industry Analyst

Rising fuel and transport costs, interest rates and wages are hurting corporate bottom lines and reducing the competitiveness of our export products. Automated cargo clearance cuts fuel and staff costs, paperwork and delays involved in travelling between numerous government agencies to get necessary approvals.

Conventional clearance of import and export goods uses paper-based manual procedures, adding as much as 10% to the product cost. Higher costs stem directly from collecting data and submitting declarations manually, or indirectly from delays and time penalties, lost business opportunities and reduced competitiveness.

Automated cargo clearance will slash turnaround time and costs for all import and export goods. eServices Lanka Ltd, is the service provider for the Sri Lanka Automated Cargo Clearance System (SLACCS), an initiative of the Ministry of Trade. eServices is a private-public-partnership with a 42% government stake.

SLACCS will provide paperless online document interchange for all import and export operations. It will eliminate slow and costly manual document transfers between importers and exporters and a large number of government departments involved in the import/export process. All document transfers and payments between the importer or exporter, shipping or airline, freight forwarder or clearing agent, Customs, Board of Investment and regulatory authorities (e.g. Tea Board and Sri Lanka Standards Institute) will be done instantaneously with appropriate electronic security controls. This will reduce fuel and staff costs incurred daily by importers and exporters, resulting in cost benefits to local consumers and foreign buyers.

SLACCS requires the participation of all stakeholders in public and private sectors. Many have to re-engineer their operational processes for migrating from manual to automated operation. “This has been the reason for the delay in the implementation of SLACCS,” explained Vinesh Athukorala, CEO of eServices. “We are helping stakeholders to make their internal systems and processes compatible with SLACCS. We are helping them to speed up their migration to a fully-automated electronic system,” he added.

Tea exporters are already benefiting from online submission of Customs declarations (CUSDEC’s). “They no longer have to visit the Tea Board and pay Rs. 100/- manual processing fee per CUSDEC sheet. Submission of blend sheets and purchase statements and acknowledgements are done online at any time. Online registration and approval of CUSDEC’s by Customs or BOI take place within minutes of receiving online approval from Tea Board,” explained Lalith Hettiarachchi, Chairman of Tea Board, the regulator for tea exports.

Several other SLACCS initiatives are in progress. Online submission of sea and air import and export CUSDEC’s eliminates time delays, manual copies, and transport and staff costs involved in making multiple visits to multiple locations with paper documents. There is no waiting at Customs or BOI zone offices for submission of CUSDEC’s, which can be submitted online at any time.

The Shipping Note initiative eliminates multiple visits by exporters or freight forwarders to shipping lines and Sri Lanka Ports Authority (SLPA). SLACCS services currently cover online acceptance of shipping notes and cargo despatch notes by shipping lines and SLPA, online bill payments, and online submission of export bills by SLPA to exporters or freight forwarders.

"We are happy to note the progress made by eServices and Sri Lanka Customs to develop an online import/export supporting document submission facility. This eliminates exporters and importers having to travel to various government departments, especially in view of the high fuel costs and security risks," says Gehan Kuruppu, Manager Shipping, Akbar Brothers, and representative of Sri Lanka Shippers council.

The Secure Document Repository initiative eliminates visits to BOI or Customs documentation centres, by providing online acceptance of charges, and online approvals from multiple government agencies.
Online Manifest submission for imports and exports provides registration within 10 minutes, enabling faster movement of containers at the port. This improves port efficiency and capacity. Pre-clearance of shipments reduces lead times for manufacturing and accelerates cargo dispatch.

Online submission of Delivery Orders (DO’s) to Customs and SLPA eliminates the need for importers to visit shipping lines. It eliminates the need for shipping agents and freight forwarders to visit Customs and SLPA to submit Master DO’s and sub DO’s. This also reduces lead times for manufacturing and accelerates cargo dispatch.

Fast-tracking of automation initiatives by eServices with SLACCS using Electronic Data Interchange (EDI) has reduced logistics lead times for imports from 27 to 21 days and for exports from 25 to 21 days. As a result, Sri Lanka has moved up in the Trading Across Borders ranking in the World Bank Doing Business 2008 report by almost 40%, from 99th position in 2006/7 to 60th position in 2007/8.
SLACCS also provides numerous benefits to the government by increasing security and transparency, reducing costs, and exposing revenue-reducing malpractices.

With market liberalization and reduced trade barriers, we may lose preferential tariffs and trade concessions, and face open export competition. The World Bank report says: “Trade reformers still focus too much on cutting tariffs and not enough on cutting delays for exporters and importers.” Very soon, international trade will mean e-trade. Countries that cannot adapt quickly to the new e-trade paradigm will fall behind in export competitiveness.
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