ICT in Trade Facilitation: Expeditin g Cargo Movement & Customs Clearance

1. ICT in Trade Facilitation: • Expediting Cargo Movement & Customs Clearance • February2014 The Trident Group, LLC

2. Imperative for Action: Sub-Saharan Africa could boost its annual GDP by $15 billion if time spent in Customs clearance is cut by 50%. Additional $20 billion could be realized each year by improving transport infrastructure, getting goods into/out ports in half the time it currently takes. If implemented, the combined effect would be even larger. Source: International Trade Centre (ITC)

3. Inefficiencies in the Supply Chain:

4. Enablers: Factors & Impact Rate of Change Economy Fast Surging Slow Environment Governance • Existing Infrastructure Adapted from: “Understanding Smart Cities: A Integrative Framework,” Chourabi, et al. (2012)

5. Improving Trade & Logistic Efficiency …one component at a time

6. Port Access Control: Congestion MitigationTruck Parking, Gating & Movement SystemsCargo Movement: Transit Tracking & MonitoringBorder Transit & Regional Corridor Management Freight Traffic Management:

7. Infrastructure Realities:

8. NAFITH : National Freight Information & Transportation Hub • Began operation in late 2005 • Proven intermodal solution designed to optimize landside movement of cargo to/from ports and border crossings • Enable port to “organize the chaos” around terminals & port gates – creating a more efficient movement of cargo • Interfaced with Customs, Terminals, Ministry of Transport etc • TCS now mission-critical for logistics and trade communities • The Freight Traffic Management System leverages the available information from multiple port stakeholders to: • Capture cargo status & truck movements/schedules • Perform validations for logistic data • Automate decisions such as truck dispatch & terminal access • Provide cargo tracking & chain-of-custody • Capital investment $20m; annual operating cost $4m • Operated under a PPP Agreement with ASEZA

9. Manages 24-hour freight transport operations for ports, terminals & Free Trade Zone Controls movement of trucks from 5 entry points on road network reaching 39 specific destinations including 13 terminals Over 200 trucking companies and more than 15,000 trucks use the system daily Several truck parks with capacities varying from 150 to 500 trucks Thousands of concurrent users requesting permits & receive instructions from the system Extends use of existing infrastructure at terminals (APM) & other destinations incorporated into TCS Uses low-cost RFID/GPS to collect data & monitor truck/rail movement Improved regional border transit & monitoring through document harmonization: Jordan-Syria, Jordan-Saudi, Iraq-Kuwait Port Access & Border Transit Control System (Jordan)

10. Stakeholder Integration & Information Exchange Trucking Companies 5 Ministry of Transport 1 4 • Apply for permits (equipment, cargo, operation, route, driver, and other data) • Receive approval Truck Drivers • Provide registry of trucks and trailers by company and cargo type (XML) • Receives entry ticket from trucking company • Receive permit with all details on operation Jordan Customs (ASYCUDA) Nafith TCS 2 6 7 • Provide Cargo releases (XML) • Validate data • Approve permits • Capture events • Manage capacity • Provide reporting and alerts • Support invoicing Gate Operations ASEZA 3 • Oversee movement of trucks through ASEZ • Receive instructions from TCS • Provide event data to TCS • Provide other releases for cargo pickup, e.g. fuel, bulk 8 Container Terminal Operators • Use TCS to validate & schedule container pickup operations

11. NAFITH: Efficiency Gains • Improved Efficiency/Productivity: • Eliminate congesting around port, terminals & access roads • Minimizing wait times for trucks and drivers • Increased truck turns and cargo carried/truck/year • Increased rail asset utilization • Reduced pollution and wasted diesel • Better Managed Activities: • Providing terminal and yard operators with advanced information on planned and in-progress truck/rail operations • Providing freight forwarders with better information on cargo delivery status • Better use of Limited Infrastructure • Spread loads over time • Push sources of delay and chaos away from congestion • Monitor operations & react to unexpected delays/emergencies • Increased Logistic Visibility & Data Collection: • Extend control and visibility for public and private stakeholders • Capture detailed operational data to support planning, investment & policy actions

12. TCS Operational Schema Government of Jordan Regulatory compliance and status reports Trucking Company Management Truck/cargo status INTERNET Billing/payment info TCS IT Platform Request entry & route NXFTMS™ Trucking Company Dispatchers Return Permit Number Verify truck, driver, route, cargo Record truck exit Track truck enroute & waiting yards Record cargo pickup at terminal Provide Permit Number Provide paper permit with routing instructions

13. Truck Park

14. Entry / Exit Control

15. Worked in a Developing Economy: • Significant infrastructure deficit • Many users had no prior IT experience • Limited/sometimes unreliable communication & internet service • No comparable system in use • Measurable productivity & investment returns for trade & transport sectors • Multiple stakeholders benefited

16. Video

17. Case Study: Common Consignment Note • A customs transit document which can be issued electronically or on paper. • Example of a regional trade facilitation agreement in action. • Information required for transit and receiver countries are included on the common consignment note when issued at origin. • Successful pilot of transcontinental rail freight shipment from China to Germany – 11,000KM distance in 18 days. • Time spent at border crossings can be significantly reduced with corresponding reduction in transport cost. • Idea can be extended to ECOWAS leveraging the successful regional transit corridor model in the Middle East.

18. NAFITH: Enhancements • NAFITH has developed new services around the core process for TCS; • Dispatching for oil tankers, ferry and other distinct transport operations • Logistics management for bulk cargo, grains discharge and delivery • Electronic marketplaces for truck freight to and from terminals • Empty container management framework • Integration with Weighbridge for axle weight enforcement • Integrated vehicle & cargo tracking services with virtual routing using mapping & location based services (LBS) • Mobile interfaces using customized cell phone apps • E-Payment & E-Waybill services • Expanding operations to Kuwait and Iraqi ports and border crossing for grain movement

19. Trade Information Gateway, Real-Time Exchange: Pakistan Initial areas of focus: • Karachi Ports access control • International transit corridor management (Afghan-Pakistan) • Electronic marketplaces for truck freight to/from terminals • Nationwide databases of registered equipment, drivers and companies • Integrated vehicle and load tracking services with virtual routing management • Mobile interfaces using customized cell phone applications

20. Risk Targeting, Risk Profiling & Screening • for Import Compliance Facilitate Trade & Expedite Import Clearance Increase Revenue Through Better Valuation Detect Import Violations & Misdeclarations Improve Security to support WCO- Safe Framework

21. Automated Risk Targeting & Import Screening • Risk Targeting Solution (RTS) automates the processes needed to objectively evaluate risks, vulnerabilities, threats, assumptions and uncertainties about cargoes arriving at our ports and borders • Provides Customs agencies at Ports (Sea & Air) & Border Crossings with ACTIONABLE information used in determining which cargo should be manually inspected or cleared. The RTS is designed to provide inspectors with uniform, actionable information needed to: • Improve Security through enhanced threat/vulnerability assessment capability to support the WCO Safe Framework • Improve Revenue through enhanced valuation • Facilitate Trade & Expedite import clearance by reducing manual inspection (dwell-time) • Improve the detection of declaration fraud and import violations • Increase volume of products reaching markets at lower cost

22. RTS – Applicability to Customs Environment Operational Framework: The RTS Solution is designed to find violative products, facilitate trade, increase revenue and improve supply chain security • Leverage Open Source and other intelligence to find risky products before they arrive in country (Pre-Arrival Intelligence) • Separate high from low risk imports to give entry reviewers more time to evaluate the higher-risk lines and automatically “may proceed” the low risk imports • Evaluate each entry line-item on the basis of a wide range of risk factors derived from a wide set of data sources • Provide automated queries to multiple databases and integration with third party data sources • Produce a consistent applicable agency-wide entry examination process • Tightly integrates with Customs systems like ASYCUDA etc

23. Analytical Breadth: • FOB value analysis for improved fraud detection • Purposeful errors in filed information • Data anomaly analysis of value to quantity ratio • Correlation with other elements on the declaration form • Seasonality of product • Text mining of declaration contents • Identification of multiple importer identities • Statistical analysis of importer & exporter combination • History of involved parties: manufacturer, shipper, origin, transit info, consignee etc • Cross references with external trade databases • Open source intelligence about Customs fraud • Expert intelligence from Customs field offices • Geospatial analysis of addresses and locality

24. Risk Targeting & Profiling Example: • Automates processing for risk screening and targeting Science Regulatory Operations External Parties General Info-based rules Science-based rules Office of Regulations & Policy Office of Science Entry Reviewers Importers Field Examiners Facility Inspectors Labs Customs Brokers • CUSTOMS • ASYCUDA • Other Systems Line Items Entries & Line Items Facilities Samples PREDICT Import Declaration Forms & Supporting Documents Risk Targeting System FACTS Static, Disjoint “Pass”–“Hold” Decision Rules NXRTS Field Activities & Compliance Tracking System Decisions Field Experience-based rules

25. Operational Impact: • Reduction in manual/secondary inspection • Fewer items are held for inspection • Significant reduction in cargo “dwell time” at ports of entry • Improvement in revenue collected by customs • Enhancement in valuation process and fraud detection • Higher number of violations found: • Increased detection of risky cargoes and import violations • Significant reduction in false positive hits • Higher productivity for custom personnel • Same number of inspectors can process higher number of entries • Tighter collaboration between customs & other agencies • Enormous return on investment for the agency • Saved $M per year in operational cost

26. Conclusions & Paths Forward Intelligent Trade & Logistics Systems multiplies impact of other investments and efforts Time is right – ICT infrastructure now in place High impact & Low cost Rapid deployment Addresses a range of challenges in developing regions

27. About Us: • Delivers solutions to automate & accelerate Trade, Logistics, Security and other verticals to improve operational efficiency • Serves several US agencies and other national/regional governments & regulatory authorities • Deploys & manages logistic operations in US, South Asia, Middle East & Latin America. Our operations; • Captures & analyzes data on over 80% of global container cargo movement • Supports operational risk targeting, surveillance and enforcement of imports involving over 20 million transactions daily for Customs & regulatory agencies • Monitors & manages over 3000 truck operations daily for 200 trucking companies in a 375 sq. km. area around a seaport to mitigate congestion, facilitate cargo clearance, track inland freight movement & border crossings • Support air cargo screening for US Transportation Security Administration

28. THANK YOU Email: michaeli@tridentgrpllc.com Tel: +1 240 494 6691 +234 706 617 8563