Fresh approach needed to trade facilitation

The freight forwarding and customs clearance sector coordinates over 80% of South Africa’s international trade. The passage of goods in and out of the country is the lifeline of the country’s economy. When this “passage” is affected, the reverberations are felt by everyone. DR JUANITA MAREE reflects on the major disruptions in the past year – and provides an outlook going forward.

The pandemic has had a serious impact on global growth and trade with restrictions on economic activity with border, port and airport closures. The virus has affected the markets for air and sea freight with a knock-on effect on revenue in the freight forwarding and customs clearance sector, which is a service provider to export and import activities. But it has also had the beneficial effect of focusing attention on the evolving interaction between cross-border trading globally and customs administrations, supply chains and trade facilitation.

The pandemic has further highlighted deficiencies in the present system particularly in dealing with emergencies, manual outdated processes, the application and benefits of disruptive technology, low-value cargo and e-commerce. As a result, investment policy, science, technology and innovation policy, e-commerce strategies, sustainable transport infrastructure and trade facilitation have come under scrutiny.

At the height of the crisis when border post restrictions created chaos, we provided clear and precise guidance to members of the freight and forwarding fraternity with cross-border freight operations as regards the requirements of Covid-19 testing. The aim was to streamline the processing of drivers at ports of entry and exit by bringing the application of health protocols into the supply chain movement without an additional bottleneck to ensure timeous delivery of cargo and supplies. This was done with a view to making a positive contribution to the African continent’s struggling economy.

However, in an ongoing process, concerted efforts are being made to expedite and harmonise border processes through the innovative use of technology. There is a need for resilience as well as efficiency in supply chains and consistency in the areas of paperless procedures, automated systems, electronic data, e-payment and risk management processes. We also need to move revenue-collection processes away from borders.

When this approach is implemented, it will sanitise our ports of entry and push the control points back into the earlier touchpoints of the supply chain movements with a robust control procedure in each handover point. It will build on a scientific risk profiling methodology deployed in big data analytics for the correct identification of trustworthy operators in the regional and international supply chains.

This will create a path for us to mature on this journey of mutual recognition on our continent and across the world. It will also create a platform in which we can instil ethical values in the execution of supply chain activities at the right time, with a focus on appropriate cost, resilience and agility.  More importantly, it will enable us to deliver on the promise made – without unintended disruptions.

In one of our initiatives, the South African Association of Freight Forwarders (SAAFF) – representing the East and Southern Africa Region of 24 membership countries in the World Customs Organization Private Sector Consultative Group – advocated for a more integrated border coordinated approach with a single window and disruptive technology to lead the way. This is designed to harmonise, simplify and coordinate the movement of cargo and people.

The key is also to facilitate trade for “trusted traders” while targeting the enforcement of higher risk traders. The focus is to move away from transactional intervention at the ports of entry/exit to an entity approach in working towards a seamless flow of cargo in a compliant, safe and secure trading environment which can bolster growth.

We are presently championing a private sector request to address how South Africa’s Ease of Doing Business trading across borders index is formulated by the World Bank (WB). The private sector’s view is that the WB methodology does not capture or reflect the true state of cross-border trading. In this endeavour and other similar initiatives, we work in conjunction with business organisations such as Business Unity South Africa (more commonly known as BUSA) to lobby government on all aspects that impinge on the freight forwarding industry.

Ultimately though, it is the building of capacity throughout the industry that will facilitate efficiencies in cross-border trading. The SAAFF’s dream is taking shape to enhance our industry’s capacity building with new methods and ideas. This will allow us to attract fresh young talent and ensure we shape supply chain architects for the African continent. Our dedicated efforts over the years to come will be aligned with the regional and international capacity programmes and the demands from trade.

This year we celebrate our centenary and must continue to embrace ethics and our moral compass in all our activities. We celebrated the occasion with a world-class Summit.

In summary, the SAAFF strives to influence decision-makers in the fields of freight forwarding, customs liberalisation and trade facilitation to the benefit of the African Continental Free Trade Agreement. We are focused on the advantages for South Africans and the 1,8 billion people of Africa who will benefit from a trade boost of an estimated US$850 billion. A crucial component of this ambition lies in the partnerships developed between the private sector and government entities.

Pan-Africanist and Ghana’s first president, Kwame Nkrumah, addressing the Ghanaian national assembly in 1965 in the context of a united Africa said: “The task ahead is great indeed, and heavy is the responsibility; and yet it is a noble and glorious challenge – a challenge which calls for the courage to dream, the courage to believe, the courage to dare, the courage to do, the courage to envision, the courage to fight, the courage to work, the courage to achieve – to achieve the highest excellencies and the fullest greatness of humankind.”