Going digital: a Tanzanian Customs broker shares his experienceBy Charles Bwaira, Managing Director, Trinity Logistics (T) Ltd
Six hundred Customs brokerage companies are registered in Tanzania. Given the size and population of the country, this relatively high number of Customs brokers is due to the fact that Tanzania has three maritime ports, namely Dar es Salaam, Tanga and Mtwara, which are also used by importers and exporters of neighbouring landlocked countries.
But this number may go down in the near future with the implementation of the Single Customs Territory (SCT), the final stage of the East African Community’s (EAC) Customs Union. Indeed, with the creation of a SCT, a brokerage company licensed in any of the six EAC Partner States will be able to operate throughout EAC territory – a provision which is imposing a serious challenge to the industry, and threatening the survival of many Customs brokers in Tanzania.
Therefore, as the provisions of the SCT will place even more pressure on brokers, this highly competitive environment now requires brokers to:
- enhance their business management knowledge, and forces them to adopt modern working methods;
- ensure that they have suitably qualified staff, and set up a training programme to keep them updated on any changes in Customs regulations and procedures – for example, understanding how to lodge a declaration via the Tanzania Customs Integrated System (TANCIS) requires training and practice;
- use the latest information technology (IT) available to increase operational performance, and to facilitate the reinvention of the way they do business.
However, implementing such measures requires access to financial resources and being able to convince a financial institution that the business is sustainable, which is not an easy task for brokerage companies – some of which are small and medium size enterprises – whose licences need to be renewed every year.
As in many countries, Customs in Tanzania is the licensing authority for Customs brokers. In order to offer brokerage services, a company must have one of its directors and shareholders pass an examination as part of the licensing process. When it comes to renewing its licence, a brokerage company has to update its business information and pay a 400 US dollar licence fee.
Creating a digital business
In January 2016, I set up my own brokerage company after being officially licensed by the Tanzania Revenue Authority (TRA). Being well aware of the level of competition in the market, I knew that my capacity to penetrate it would be determined by my ability to manage the business with maximum compliance and transparency.
After reading the February 2016 edition of the WCO News magazine with its ‘Going Digital’ main theme, a revelation came over me: I had to develop an IT solution that would digitalize all my business procedures, making it easier to manage staff, finances and customer relations. One of the functionalities of such a system should allow my customers to login to a web portal to view the status of their cargo, all their documentation, and any invoices due for payment.
My next step was to hire an IT expert to design and create the software. He had to understand how the company staff operates in order to digitalize our procedures, and we spent hours mapping out processes and trying to find ways of improving and digitalizing them. Finally, after two months of hard work, “Clickers Auto Agent” was born – a web-based management software for Customs brokers.
The software automates all internal procedures, enabling us to inform our clients by email or text message on every stage of the Customs clearance of their shipments. As a manager, it helps me to keep track of my customers, save and track documents easily and systematically, and manage invoicing as well as finances such as day-to-day petty cash and balance sheets through an accounting package.
Every staff member has a profile and an account. They login to the system as soon as they start working, and are assigned duties by a supervisor to which they must report once their work is finalized. Managing workflow through such a system enables better visibility, including systematic performance rating that provides a quick analysis of what staff are doing and how well they are doing it.
Once the software had been developed, together with the developer, I reached out to other stakeholders and brokers to present our tool to them and to get their views on how to improve the system, including the possibility of making it available to them to use. During our marketing and outreach exercise, certain stakeholders suggested that we link our software to the TRA’s TANCIS and the IT system of the Tanzania Ports Authority (TPA), in order to enhance the quality of the information collected by these systems.
We also had constructive talks with representatives from the Dar es Salaam Corridor about the possibility of interfacing our software with the software that they are currently developing, in their quest to improve the performance of the corridor, by better monitoring issues such as the cost of using the corridor, transit times, border dwell times, security, and safety. Representatives attending their workshops on the issue are drawn from both the public and private sectors, and include delegates from Customs and clearing and forwarding agents.
After I signed a sale agreement with the developer, the tool was made available to other brokers, and a good number of them are using the system at the moment. The system also provides an interface with transport companies and border posts, which can connect to it and access some information. The idea is to have it linked, in the near future, to TANCIS and the IT systems of other stakeholders such as the TPA, in order to facilitate operations, enhance transparency, and enable better compliance by providing direct access to data on commercial operators’ transactions.
In Tanzania, the Customs service is in charge of licensing and monitoring compliance by Customs brokers. However, talks are ongoing with regard to the setting up of an autonomous board, whose members will be chosen from among Customs brokers and which will oversee all the profession’s requirements. The decision is motivated, among other things, by an aspiration to increase the professionalism and integrity of brokers.
Integrity has been an issue for so many Customs brokers and has cost them their businesses and operating licences. A good number of senior Customs officials have also lost their jobs for the same reason. With this in mind, I am convinced that digitalization will improve efficiency, encourage transparency, and boost integrity among Customs officers and brokers. For all these reasons, it is time to adopt modern working methods and business practices as the 21st century continues to unfold.