Standardizing platforms and adapting to the latest technological solutions available is the way forward
22nd February 2019By Steven Pope, Vice President Customs & Regulatory Affairs, DHL Express Europe & Chair of the Customs Committee of the Global Express Association
Technology is changing at what seems like an ever-increasing pace, raising discussion about autonomous cars and the future of employment, as well as the future of trade. Whilst cars are not quite driving themselves yet, global trade has seen a dramatic shift in the way that we shop.
I am talking, of course, about e-commerce. Only a few years ago, we all went shopping in the “High Street” or the local shopping mall. Today we shop online and have purchases delivered right to our doorstep in a matter of days or even hours.
E-commerce has completely transformed how we shop and also how we trade across borders, with a growth in single smaller shipments as opposed to bulk shipments in containers. This has brought great opportunities, and challenges as well.
In the Express Industry, we have had to adapt our principal B2B delivery model to an increasing B2C model, servicing consumer deliveries at home or elsewhere. As e-commerce has grown at speed, so the Express Industry has invested heavily in adapting its integrator model to match that growth, adapting both our delivery models and networks.
Before the evolution of e-commerce, the Express Industry principally served the B2B market, which required our couriers to collect a large volume of shipments from one commercial address and deliver multiple items to another commercial address at destination.
B2C changed that, especially at final delivery, requiring couriers to make more stops, often with only one shipment per stop, and delivering to residential as opposed to commercial addresses, where the key challenge is ensuring that someone is available to receive the shipment.
This evolution has come on top of, and not instead of, our traditional B2B business, so we have had to manage an evolutionary change in conditions where we are seeing fast growth in shipment volumes entering our networks.
The Express Industry is an innovative industry by nature, bolting together extensive air and road networks, local pick-up and delivery services, and massive information technology (IT) services to create one integrated and secure supply chain, driven by the needs of our customers.
A major balance for us is maintaining our traditional B2B model alongside the more resource intensive B2C model, and here technology and a vision for innovation play a key role, with IT at the forefront. So what do we do and how do we assure our supply chain integrity, so that clients receive their shipment, (as long as it is compliant), on time at their door?
Having an integrated network is a major advantage; however, the Express Industry has backed this up with sophisticated IT and technological control systems developed and implemented into our supply chain by experienced and well trained experts. Some of you, who know our members attending the WCO and other fora, are well aware of the background and experience of our experts. Some of you may even have worked with them as colleagues in the public sector.
Linking this experience with a culture based on adapting to an ever-changing world enables the Express Industry to thrive. Automation plays a pivotal role in the success of ensuring that a package is picked up in Hong Kong in the evening and delivered to New York the following morning. Using bar-code technology, a shipment is tracked from start to finish travelling across the globe, with every stage in its delivery cycle recorded centrally.
Take a visit to one of our hubs and you will see the six-sided bar-code scanner (designed to read the bar code, no matter the position of the shipment on the belt) recording the arrival of a shipment in the facility together with information on the waybill linked to it, and indicating where the shipment came from and where it is going to, among other things.
This signals the system to direct an individual shipment to a specific channel to ensure that the shipment is either sent to a container for inward transportation, or to Customs for inspection, or held if other checks are required. This, of course, is subject to the availability of electronic Customs clearance systems, which can communicate with our systems and generate a stop message.
Checkpoints record key integrity-based processes such as security screening via x-ray, or checks against the consignor or consignee for any potential breaches of trade sanctions or denied parties.
At the customer level, we have adapted our courier mobile technology to offer delivery windows for private consumers, in particular to ensure that they are at home when a shipment arrives. For some, a delivery at home is not what they want, and so we have adapted to deliveries to self-developed lockers situated at key geographical locations in towns and cities, or to pick-up points in, for example, shops. Notification is often via an app, email or SMS, depending on customer preferences.
All of these developments require one thing; the standardization of platforms, and adaptation to the latest technological solutions available. The Express Industry is data rich, supporting a log recording the journey of a shipment, which assures its integrity along the supply chain.
However, for regulatory bodies such as Customs authorities, this goldmine of information is not as valuable if there are no standardized and up-to-date means for Customs to collect and interpret this data.
Utilizing our data to its full extent requires closer cooperation between policymakers and the Express Industry, something we see at a global level via the WCO, but needs refining at a national and regional Customs level. And this goes for industry as a whole.
As an industry, we are a naturally curious and outcome-orientated partner. We are always looking for better ways to engage with our stakeholders to share knowledge and increase understanding of each other’s priorities.
There is probably no better example than the development of the Air Cargo Advanced Screening, or ACAS, programme, the name given in the United States (US) to what is known at the WCO as the “Pre-loading Advance Cargo Information (PLACI)” programme, which provides for the submission of a reduced data set by industry to Government to risk assess air cargo for a potential terrorist threat, often referred to as the “bomb in a box.”
The programme first started in December 2010, and the Express Industry led the way by piloting means to transmit data to US Customs and Border Protection (CBP) and the US Transportation Security Administration (TSA). The open dialogue and commitment on both sides to find an effective and practical way to implement the screening of air cargo data paved the way for a low-cost, but effective, way for the US to screen data, quickly and simply.
The transparency between Customs and carriers allowed the programme to be adaptable, and in addition, having a shared focus on security, encouraged participation, and cooperation. The result was a successful programme that, through technology, maximized the use of early data and risk assessment without impeding the flow of commerce.
In the years to come, technology will continue to play an ever-increasing role in supply chain integrity, with blockchain offering an even bigger leap in terms of the availability and use of data to assure the integrity of a shipment along the supply chain, and, of course, we are now looking at how best to exploit this technological innovation.
Using such technological advances to their fullest advantage requires investment, both from the public and private sector; however, that cost pales into insignificance compared to the cost of not harmonizing systems, or even worse, not adapting to the future in a timely fashion.
The Internet has changed our daily lives and made the world smaller via harmonized systems, enabling people to search for information, book a hotel room, or buy a product anywhere in the world. Commercial processes are now global in nature, and Customs processes need to be following that trend.
The WCO recognized this trend a long time ago, engaging with the private sector via the Private Sector Consultative Group (PSCG) on programmes such as the SAFE Framework of Standards to Secure and Facilitate Global Trade, the Revised Kyoto Convention, and, of course, the discussions on e-commerce.
The fact that we were invited to submit an article is a typical example of the WCO’s commitment to co-creation and to working closely with its various stakeholders, and we look forward to a continued partnership to the benefit of the public and private sector alike.