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Single Window to make supply chain management more efficient

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Single Window to make supply chain management more efficient A single-window information system, which provides one point of reference for all key players in the transport industry, will help to make supply chain management more efficient, especially at South African ports. MARISKA MORRIS learns more

According to the South African Logistics Barometer 2016, transport and logistics costs amounted to R4 014 billion in 2015. This includes transport costs at South African ports. The port charges, documentation charges and standing costs, up until a ship leaves or arrives at a port, amounted to R46 billion, the Logistics Barometer reports.

Fees paid to port authorities and terminal operators amounted to half of these costs, while three percent of the remaining R22,8 billion are costs acquired by trucks that have been delayed before, or in, ports. This amounts to R684 million. These high costs are largely due to inefficiencies at South African ports.

From documentation to loading the cargo, transport companies spend around 15 days transporting goods in South Africa, notes Masela Makgeta, director of integrated transport corridors at the Department of Transport (DoT).

Alwyn Hoffman, Professor at the North-West University’s School for Electrical, Electronic and Computer Engineering, says that there are often intentional and unintentional causes for these delays.

Some unintentional causes include incomplete documentation and a lack of communication between the freight companies and ports. He comments: “Trucks arriving at ports, when relevant cargo is not yet available for loading, result in congestion inside the port and at the gate. This causes additional delays of 40 minutes to more than a day.”

Incomplete documentation could increase the customs process from a few minutes to several days. However, some delays are intentional, both from freight companies and port officials.

“Truck drivers arriving at the border might submit documents only the next day in order to spend time at the ‘shebeen’, while customs officials might target specific consignments for bribes,” Hoffman points out. The solution to these inefficiencies, according to the transport authorities, is a single-window information system.

This system allows information from the governments, ports and transport companies to be stored in one place, which is accessible by all the relevant parties. This will allow the likes of ports and transport companies to communicate better. For example, ports can notify transport companies when there is space to load cargo, or if there is a delay.

Hoffman adds that most data is stored in isolated silos, which are inaccessible – even various departments within an organisation are often unable to access certain information. Financial departments, for example, are unaware of the location of the truck, while the driver is unaware of any outstanding payments or documentation.

Single Window to make supply chain management more efficient “If there is real-time visibility of the current status of all critical activities, and of the human operators responsible for these, then most underlying causes will either disappear or will become manageable,” Hoffman says. Real-time updates could thus prevent truck drivers from waiting at ports for documentation, or officials purposefully delaying a vehicle.

Mozambique successfully implemented a single-window system in September 2011. The system increased revenue and reduced the clearance time. Abhishek Dewan, technology manager at Mozambique Customs, notes that the single-window system reduced the number of steps in the clearance process from 32 to eight.

The online-payment facilities reduced travel time with instant customs duty and tax payments. Money is now transferred to the Treasury within 48 hours rather than the previous 15 days.

The current average clearance time for ports in Mozambique is around 49 hours for 84 percent of transport companies, with 74 percent cleared within 24 hours. As a result of this improved efficiency, revenue grew by 24 percent in 2014 and another
14 percent in 2015.

However, for this system to be implemented in South Africa, numerous misconceptions need to be addressed. Mmutle Lentle, CIO of Transnet National Ports Authority, says that sharing information freely between transport companies and government remains a challenge.

“The sooner we adopt a collaborative approach the better. We need to reduce the competition for information, or the perceived value,” he adds. Transnet is currently working towards upgrading the Port of Durban.

Another challenge to implementing the single-window system is the uncertainty regarding the new Border Management Agency (BMA). The BMA Bill was passed in June and aims to establish one centralised authority to handle all South Africa’s ports of entry, including policing and customs.

“The implementation of a single-window system depends on political factors such as which government department will take ownership of this. Given the uncertainty around the BMA, a single-window system may only become a reality once the BMA has been established,” Hoffman says.

He adds that achieving sufficient cooperation between the different government departments would be one of the biggest challenges to the implementation of a single-window system.

“It will only add value if all government functions are addressed in one system, and currently such cooperation is not what it ideally should be,” he says. However, this system remains essential if the transport industry hopes to reduce time lost at ports and remain competitive.

“Some of our cost-benefit analyses have shown that reduced cross-border waiting time can increase profits of road-transport companies in the KwaZulu-Natal (KZN) region by more than R1 billion annually. The positive impact on the entire economy could be much more if our corridors become more globally competitive,” Hoffman points out.

An ideal way to reduce wasted time would be to follow Mozambique’s example of reducing the steps as well as the paper documentation required.

“The systems operated by South African Revenue Service’s Customs division is already largely paperless, as are most of the systems operated by Transnet. However, the same is not yet the case for other government departments involved in cross-border controls. They will have to adopt similar measures, and all of this will have to be integrated into a common system to achieve the goal of total paperless border crossings,” Hoffman says.

“Technologically, it is perfectly possible, but, in practice, it will require a lot of political will to push it through. Some government departments may feel that they will lose their position of power if they are stripped of their authority to stop cargo without providing good reasons,” he adds.

A single-window system in KZN, however, might not be too far in the future as the KZN DoT has implemented a similar system, dubbed the Data Bank.

“The unavailability of consolidated statistics about the movement of freight has been a long-standing problem in South Africa – for all modes of transport. There is very little information about the large volumes of cargo carried countrywide by road transport,” the KZN DoT notes.

The Data Bank was created to address this lack of available information. It is currently running as a pilot project in KZN, monitoring freight transport on this popular import/export route. Information on the route is made available on the Data Bank, for example, the number of trucks and their average speed on the route.

Although still in pilot phase, the project offers promising results for road-freight information on a single shared system. However, South Africa will first need to balance private interests with government control; something Dewan notes was a big challenge for Mozambique.

“A single-window project touches upon so many stakeholders and ministries that it is difficult for governments to find a rightful owner. Single-window trade is often caught between the need for government to control and commercial swiftness,” Dewan concludes.

 

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