Against a backdrop of strikes at multiple British ports, supply chain operators grapple with the question of how to make better use of the latest available technologies to improve the efficiency of cross border trader.
It’s a description that is appropriate not just for 2022, but also for the 1980s when Maritime Cargo Processing (MCP) was established.
“The shipping industry is very cyclical,” MCP’s business operations manager Ole Krebs tells the IOE&IT Daily Update. Indeed, the firm’s experience and success in modernising port customs processes in previous decades is already proving handy as the UK government looks at ways to deliver the world’s “most effective border” by 2025.
MCP is involved in two of the consortia behind the six Ecosystem of Trust pilots currently being trialled by the UK government. This is an initiative that uses data from across the supply chain to give government agencies better and earlier trade information to more efficiently risk-assess importers, reducing the requirement for checks at the border.
Same problems, different era
In the 1980s there was no such thing as Brexit and CDS, but there were issues with processing the customs declarations that were being submitted for goods moving through the Port of Felixstowe, which had risen in popularity due to strikes at other British ports, leading to congestion. Declarations were submitted in paper form at the time and it could take up to five days per consignment for customs authorities to clear the goods. Krebs explains:
“It was a convoluted process in that, a freight forwarder completed the customs declaration on a paper form and brought it down to the customs office. The officers would enter it into the national customs computer and you’d then get a response back.
“If the declaration was rejected, it would be put back into a pigeon hole for the forwarder to collect and this would ultimately cause a delay.”
MCP’s solution was to give the forwarders direct access to the customs computer so that they could deal with any queries or issues about the declaration data almost immediately.
“The clearance time came down to a matter of hours on average. The next step was then to link all of those non-inventory-linked customs declarations to the goods and the consignments themselves.
“And so, inventory linking was born and we’ve expanded functionality to cater for all containers, general cargo, bulk and roll-on/roll-off movements, within the functionality of the system now known as Destin8.”
Destin8 is a port community system (PCS) and is now used in over a hundred UK ports, making MCP the largest community systems provider (or CSP) in the country. The Destin8 system delivers and receives messages both to and from the relevant players within the port’s terminal operating system and external players, such as freight forwarders, hauliers, shipping lines, enabling the goods to be moved and scheduled for onward delivery once customs clearance has been confirmed by the border authorities.
Back to the future
Fast forward to 2022 and MCP is again looking at how to improve efficiency around the processing and clearing of customs data for goods entering Britain.
Krebs says that in the UK ports where Destin8 is in operation, 86% of the goods imports are customs cleared and released into free circulation within 60 minutes or less of their arrival. However, the remaining 14% are held up due to issues around either sanitary and phytosanitary controls (SPS), safety and security (S&S) information, or failed customs declarations.
MCP is helping to address the SPS and S&S issues through its participation in two of the six Ecosystem of Trust pilots currently being backed by the government.
Ecosystem of Trust
One of the pilots involving MCP builds on the Trade Logistics Information Pipeline (TLIP) developed by the IOTA Foundation alongside the Institute of Export & International Trade (IOE&IT). TLIP, which was developed for the establishment of a UK-Kenya digital trade corridor, takes data from commercial documentation and provides it as digital data, via blockchain encryption, into the relevant port and government systems.
[Pictured: Steve Lamb, general manager, Maritime Cargo Processing plc]
Krebs explains that, for the pilots, MCP has the key role of feeding this information into the relevant bodies within a port while interfacing with government systems to process and then message the customs clearance information.
“The TLIP system has the capability of taking in data from the commercial invoice, packing lists, health certificates and so on. It then provides this in a digital format – either as a pdf or as data (in XML or JSON format) onto an open distributed ledger infrastructure.
“This can be linked to the port community system – which is what we’re trying to do with this particular consortium – or you directly feed it into port health and a single trade window on an API basis.”
Time savers
The TLIP approach has been largely developed for SPS goods and Krebs says that it sits nicely alongside the methods being developed in the other pilots.
Another consortium involving MCP is addressing the delays around the provision of S&S information and is addressing this by effectively using data from a carrier’s shipping manifest to complete the entry summary (ENS) declaration at a far earlier point in the goods movement.
He argues that the reduction in port dwell time from both pilots could be considerable – particularly following a period in which Brexit, the pandemic and driver shortages have all impacted shipments into Britain. This has seen some recent shipments into the country sitting in ports for between three to five days, he says.
Under one of the pilots involving MCP, a shipment of frozen foods from the EU was cleared and made available for delivery within three to four hours. If a large part of that 14% of consignments entering Britain can be cleared in hours rather than days, the traffic jams and import delays we’ve seen over the last two years could be significantly reduced.
Don’t fix what isn’t broken
While MCP’s solution in the 80s was to move forwarders onto using a particular online system, Krebs argues that the main opportunity for 2022 is to better integrate stakeholders across the supply chain using existing technologies and platforms.
The challenge, however, is not to reinvent the wheel, he argues.
“There are lots of different ports operating on a global basis with different interfaces. One of the benefits of being in the UK is that you already have a system in Destin8 that’s being used in over a hundred ports.
“Carriers moving between ports don’t have to worry about how to interface with the different operators – we deal with that. Equally for the terminal operators, they are dealing with the same system.
“Don’t fracture the system because then you’ll have the opposite effect to what the Ecosystem of Trust is trying to achieve.”
Single Trade Window
He applies the same logic for the establishment of a Single Trade Window – an interface through which traders can submit all their trade data relating to a goods movement once, rather than numerous times to multiple government agencies.
“We recognise there is a need for us to work together with the Single Trade Window as well, and we are positioning CSPs as the gateway into that.
“We think this is a better option than having thousands of traders all individually going into a Single Trade Window for customs declaration purposes.
“In the latter scenario, firms are still going to have to duplicate a lot of the data back into the port community systems in order to make sure all the players have the right statuses and that the port is aware of what the status of the goods is.”
Futureproofing
When it comes to establishing time-tested solutions for improving UK border processes, MCP has plenty of demonstrable success.
As the UK looks to establish futureproof border systems for the 21st century through the Ecosystem of Trust and Single Trade Window initiatives, the challenge for MCP, government and partners is to build on this success.
Steve Lamb, the general manager at MCP, agrees, saying:
“Don't replace the process that isn't broken. Build upon existing systems and enhance them to deliver a better product.
“What we've got in the UK right now is better than what many countries have built. Don't throw out the old to bring in the new and call it progress.
“We’ve already shown that we can provide solutions for trade and the net result of that is reduced friction at the border.”
