ISSUE 3 2010


THE IT SEcTION FULL SCREEN VIEW - by Marcia MacLeod Freight industry not ready to hail new Chief


Customs changes in Britain and the EU are being held up due to a combination of the usual glitches that always pop up during major computer installations and the lack of preparation shown by member states, says Marcia MacLeod. In the UK, the full


implementation of Chief STE (Strategic Technical Enhancements), the replacement for Chief, the main customs computer, has been delayed until Spring 2012. The original


start date was January 2012. But if Chief STE is only held


up by a few months, shippers and forwarders should count themselves lucky. Although the Export Computer System (ECS) went live at the end of 2009 without any real problems, Estonia is apparently the only EU member state actually doing anything about the Import Control System (ICS) - despite a working launch date of January 2011. The UK’s HM Revenue and Customs has promised


that it will go live with ICS on 2 November. ICS is much more complicated


than its export equivalent because the responsibility for declaration lies with the carrier. All non-EU imports must be declared at the first port of call in a member state 24 hours before the goods are loaded. Most forwarders won’t even know what ocean freight has been loaded and what hasn’t, and will therefore play no part in the customs declaration.


Electronic systems help cars to move quicker


Two initiatives in the auto industry are set to improve and speed up international trade. US trade body, Automotive Industry Action Group (AIAG) is working on a trade collaboration system that will handle everything from order to delivery. Acting like a private freight portal, the system will enable all relevant parties to communicate with each other and produce all necessary trade and shipping documents, e- invoices and so forth. Co-chair of the initiative, Mike Commerford, explains: “A pilot with General Motors, a battery provider, DHL, Ceva Logistics and APL show that it works. The system will be Internet-based, allowing users to access it on an SAS (Software as Service), only paying when they use it, such as


per transaction. “The average freight shipment is


touched by a human 26 times; we have been able to cut this to nine, reducing cost, errors and delays, and speeding up the shipment process - 92% of the information needed to move goods globally is known before the cargo leaves the supplier. At the same time, shippers to the US can use the system to obtain the necessary pre-clearance information for US Customs.” The AIAG is working with the


Odette association of automotive industry groups., the Japanese Automobile Manufacturers’ Association (Jama) and steel maker Corus in Korea to try to roll out the system globally. Meanwhile, Odette is working on an e-invoicing solution. “The


automotive industry has been a leader in e-invoicing for production materials,” says Odette programme manager, Joerg Walther. “We are now trying to extend this for use with non-production materials and also enable smaller companies to start going electronic. The problem is that different EU countries interpret legal requirements differently, so that, for example, German and Spanish tax authorities required a qualified digital signature, which are not always easy for small companies to obtain.” Odette is also involved in an


EU project, Auto-Gration, which aims at bringing SMEs into the electronic age by facilitating integration of different, often incompatible, systems within the supply chain.


Liverpool leads the pack


Liverpool is now claiming the fastest turnaround times of any UK port, following a £1.1m investment in operational IT systems. It says that there has been a dramatic improvement in vehicle turnaround times, with 95% of truck drivers processed though the Port within an hour, and 65% within 30 minutes – a 30% improvement on previous performance. The new customised system,


developed for and by Peel Ports Mersey’s in-house team, includes: a major upgrade of the port’s terminal operating system, a new wi-fi networt, GPS for the port’s straddle carriers and a new SMART Vehicle Booking System.


Due to airfreight’s shorter time scales and the amount of consolidated cargo, forwarders will be more involved in the process. But neither air or sea freight forwarders are very happy about giving too much information to the carrier, even if the carrier has the legal responsibility to make the declaration. In the meantime, the first


phase of EMCS (Excise Movement Control System) for bonded goods is also due to go live in


January. Phase 0 (yes, really) covered goods received in the UK in bond, while Phase I covers the first stage of the movement of these goods. It is, says one onlooker, ‘a very messy project’, involving new declarations and new forms to be completed and sent with all relevant cargo. A new version of the


Accompanying Administrative Document (AAD) which travels with excise goods will be published and only electronic formats of the document will be


accepted - until the computers break down, of course, at which point HMRC will revert to paper back-ups. And if this weren’t enough,


consultation on the Modernised Customs Code’s preliminary draft is now taking place, with a vote on the final version of the preliminaries due for mid-December. The final final version will be voted on in June 2011. You couldn’t make it up if


you tried... Faster cargo cashflow


ControlPay, the freight audit and pay outsource company, is launching a freight factoring service this autumn which will speed up payments for freight companies. “Freight invoices will be paid within three


days, providing we have matched the invoice to the service,” explains chief operating officer Dietrich Kinds. “This compares very favourably with normal payment terms.” Customers of freight ‘audit and pay’ companies arrange for all freight invoices to go direct to their outsourced service providers. These are then checked for duplication and errors, and matched to the space booked and job requested. Once the invoices have been confirmed as correct, either the outsource company pays the outstanding amount or sends authorisation to the shipper, who makes the payment. Duplicate billing is unfortunately extremely common in the freight industry. Errors can include charges for more items than were shipped, to and from incorrect locations, and even separate invoices for multiple shipments going from the same origin to the same destination on the same vehicle. (The separate charges total more than they would if one invoice covered all of the shipments on that vehicle.) “During the recession, companies have


slowed down their decision process,” admits Kinds, “but there has been great interest in


freight audit and pay as shippers can gain visibility of all their global freight shipments. The money saved - typically from 2-7% of the total freight spend - is not as important as gaining more control and visibility of freight movements and spending.” Freight audit and pay was born in the 1950s


out of US legislation that standardised freight rates and also insisted freight companies were paid within seven days. The US still sees the greatest use of this service, but it is growing in Europe. ControlPay was the first dedicated European company, but NVision Global, although owned by a US company, operates as a separate entity in Europe. “US freight audit companies trying to set up


in Europe have faced difficulties understanding the freight terms here and dealing with VAT and the multilingual environment,” points out senior VP customer solutions at NVision Global, Dominic McGough. “In the US, freight charges are based on miles covered and unit measure – for example full load, part truck and so on but in Europe it is based on unit loads and kilometres covered, or per loading metre.” Freight audit and pay also benefits the


carrier. Even without ControlPay’s freight factoring add-on, service providers get paid more quickly. “If a shipper queries a bill, they’ll put it on hold while they investigate it,” Kinds emphasises. “Shippers are inundated with invoices and often can’t keep track.”


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