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Rapid Response Toolkit

Rapid Response Toolkit. Trade Logistics Advisory Service World Bank Group April 6, 2011, Washington DC. Contents. Module 1. Understanding the Fundamentals (Supplemented by Handout 1). Module 2. Country Program Scoping (Supplemented by Handout 2). Introduction.

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Rapid Response Toolkit

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  1. Rapid Response Toolkit Trade Logistics Advisory Service World Bank Group April 6, 2011, Washington DC

  2. Contents • Module 1 • Understanding the Fundamentals • (Supplemented by Handout 1) • Module 2 Country Program Scoping (Supplemented by Handout 2)

  3. Introduction This module covers the following topics: • Handout 1: Key elements of the international supply chain – intermodal transport system, traders (end-users), service providers (facilitators) and regulators (enablers) • Cargo and Information Flows across the Supply Chain • Chain performance – time and cost indicators • Main hotspots in the chain – interconnectivity and sources of time delay and excessive cost 1 2 3 4

  4. Farm to Foam – A Coffee Supply Chain Mombasa Port Baltimore Port Terminal Border Clearance Handling PortOperator Malaba Border Gatuna Border

  5. Farm to Foam – A Coffee Supply Chain Bourbon Coffee 2101 L Street NorthwestWashington D.C., DC 20037

  6. Cargo & Information Flows Across the Chain Insurance Insurance Invoice Request for Offer Commercial Transactions between buyer and seller – - Responsibility: Liability coverage; risk; insurance - Location of transfer - Payment Terms: Guarantees; cash; check; LoC - Payment Time: Advance; On Delivery BL Copy Offer Order Delivery terms Payment terms Payment Payment preparations preparations Buyers Buyer Warehouse Seller Warehouse Insurance Insurance policy policy ’

  7. Cargo & Information Flows Across the Chain We do not focus on these commercial documents! Transport related Bill of Lading Request for Offer Manifest Offer Packing List Buyer Order Seller Invoice ’ Letter of Credit Dispatch

  8. Cargo & Information Flows Across the Chain Types of Official Documentation ..& stamps Special Preferential Customs Transfer Certificate of Origin - EAC COMESA Other FTAs Transit Documents Import License Technical Certificates – Phytosanitary Veterinary Conformity etc Terminal Handling Receipts Inspection Report Cargo Release Order Customs Declaration This is our focus!

  9. Cargo & Information Flows Across the Chain Port Handling & Manifest Transfer Bill of Lading Border Clearance Vessel Terminal Arrival Handling Port Operator International Shipping Lanes Cargo in custody The Manifest Submission Process Manifest Cleared cargo Outbound Port Customs • - Manifest need: Information flow to the place of landing i.e. port • Manifest form – hard copy / electronic • - Manifest info: Which containers will be unloaded and which containers will be held in the port’s yard under bond to await clearance from customs Shipping Agent ’ ’ Warehouse Seller

  10. Cargo & Information Flows Across the Chain Certificates Test Protocol Veterinary Phytosanitary Transport Conformity • Clearance of Cargo: • Documents to • Customs & Technical Control • Duty & fee payments • Role of Agents • Inspections Technical Control Terminal & Port Operations Clearing Agent Customs Inspection Vessel Arrival Invoice Declaration Supporting Duty & fees Inspection B/L Copy Delivery Order

  11. Cargo & Information Flows Across the Chain Release order Declaration OK Payment/port fee Release order • Clearance: • Port Charges • Release Order • Move to ICD / Private warehouse • Seals • Transport Terminal Border Clearance Handling PortOperator Clearing Agent

  12. Time & Cost Measurements as Indicators ofChain Performance Border Clearance Day Cost Kenya 3 430 USD France 1 150 USD Colombia 2 200 USD Terminal Handling Day Cost Kenya 6 390 USD France 3 316 USD Colombia 2 170 USD Border Clearance Terminal Pick-Up & Inland Transport Day Cost Kenya 4 1000 USD France 2 627 USD Colombia 3 1000 USD Handling Document Preparation Day Cost Kenya 11 370 USD France 5 155 USD Colombia 6 330 USD Seller Cost and processing times provide hurdle rates whereby countries whose performance levels in the various categories fall short of best practice (i.e. France here) in comparison can be identified as potential “hotspots”. Buyer

  13. Hotspots – Common Areas Hotspots Document Preparation Vessel Arrival & Berthing Terminal Handling Border Clearance Pickup & Inland Transportation Interagency – interconnectivity; IT Terminal Border Clearance Handling Shipping Transport Outbound Port Seller Retail Coffee Farm

  14. Hotspots in the Chain – Document Preparation • Small & Medium Trader Issues • Hire low cost/low skill agents • Delay in commencing good declaration due to cash squeeze • Use of cheap port storage Trader: Importer/Exporter Freight Forwarders & Customs Brokers X • Multiple Document Requirements for • Customs • Ministry of Health • Food & Drug Agency • Ministry of Agriculture • Bureau of Standards • Other Border Agencies • Weak Interconnectivity • Manual submission of documents • Sequential processing • Preference for low cost/low skill services • Weak understanding of import requirements • Lack of trust in system

  15. Hotspots in the Chain – Border Clearance Cleared Inspection Required • Inefficiencies for Customs • High number of supporting documents • Repetitious filing of forms • Manual processing • High inspection rates • Lack of electronic support in inspection • Frequent valuation disputes • Lack of inland clearance capabilities

  16. Shipping Agent Bureau of Standards HealthDepartment • Sequential Processing • Increased dwell time • Increased terminal handling charges when moving from one inspection area to another • Excessive documentation • Lack of clarity on roles • Lack of trust and an unwillingness to share data • Arbitrary behaviour by government agencies Agriculture Department X OtherAgencies Trader Clearing Agent Hotspots in the Chain – Border Clearance (cont.)

  17. Hotspots in the Chain – Vessel Arrival/Berthing International Jurisdiction Receiving Country Jurisdiction Harbour Limits Formalities for Vessel Arrival/Berthing Vessel Control Authority Coast Guard Port Authority Pilotage Association/Authority Customs Immigration Department of Agriculture Department of Health Shipping Agent Manual Processing Port Authority Customs ShipManifest X

  18. Hotspots in the Chain – Terminal Handling Poorly Configured Handling Facility Poor Labour Practices Inefficient Terminal Tariff System

  19. Hotspots in the Chain – Inland Transport • Travel Delays • Compulsory stops at many weighbridge stations • Police checks • Deficient driver skills that lead to accidents • Frequent vehicle breakdowns, and • Poor road conditions that affect driving speed Inspection • High Carrier Rates • High cost imported spare parts • Low Utilization due to long cycle time • Absence of backhaul cargo • Absence of Market Competition • Rigid Licensing • Tacit promotion of cartels • High Incidence of Cargo Loss & Damage • Frequent accidents • High rates of theft

  20. Hotspots in the Chain – Interagency & Coordination Pickup & GateClearance Delays Customs Communication &Coordination Delays Police Port Authority X Trader Road Delays Clearing Agent Truck Operator Truck Operator Port Operator

  21. Questions

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