WORKSHOP ON SUSTAINING TRADE FACILITATION GAINS THROUGH EFFECTIVE AID:ADDIS ABABA 12TH -13TH MARCH 2009.PRESENTATION BY; THE CENTRAL CORRIDOR TRANSIT TRANSPORT FACILITATION AGENCY (TTFA) .
TTFA • Is a cooperation among Stakeholders and Governments of Burundi, DRC, Rwanda, Tanzania and Uganda. • It is a legal institutional framework to enshrine the cooperation through a legal Agreement. • The TTFA Agreement was signed by Member-States on 2nd September 2006. • THE Agreement underlines the modalities of this cooperation. • The scope of TTFA activities cover the corridor transport and logistics systems.
Governing Organs of the TTFA • The Council of Ministers of the Member Countries • The Executive Board comprising of 5 Permanent Secretaries and 5 Representatives from the Private Sector. • Stakeholders Consultative Committee (STACON) • Stakeholders Representative Group (STAREP) • Permanent Secretariat.
MAIN PROTOCOLS The main issues for cooperation covered in the Agreement are:- • Maritime Port facilities • Customs Control • Documentation and Procedures • Transport • Transit Operations • Rates, Charges and Payment Arrangements
General Trade Facilitation Issues • Monitor handling and movement of transit traffic • Investigate performance of the transit traffic • Propose strategies for improvement • Coordination of stakeholders involved in the handling of transit traffic. • The TTFA has a Regional Stakeholder Consultative Committee and National Stakeholder Committees in each Member State. • Stakeholder Committees provide information on the performance of the Corridor.
The Story of Clotilda • This is a story of a Lady entrepreneur from Tanzania. • She has been operating as Clearing and Forwarding Agent for more than 20 years now. • As her business grew from an agent of one small trader to large exporters and importers, complaints from her customers started as her service delivery became unreliable, sometimes with excessive delays leading to heavy costs to the importers. • On examination of her service she came to the conclusion that the rail which was her major transport supplier could was underperforming hence could not supply her with adequate capacity to convey her customers goods in time, she feared she was going to these precious customers.
Clotilda (continues) • She decided she must solve the problem, there is nothing impossible. She came to a decision that although not common in her part of the world and that she was a lady. she was going to venture and buy her own railway capacity, i.e locomotives and wagons. After about 4 years of negotiations and endurance she managed to get approval for purchase of 100 wagons to which she started with 20. • Question; did she succeed? Initially she enjoyed the new invention in Africa, if not the world but sooner the railways lacked locomotives. Wagon utilisation started to reduce while cargo was piling and transport and logistics costs to the importer increased. So her problems did not go away completely. Should she get her own locomotives, no the Railways was being concessionerd as a way of improving transport for trade facilitation.
Clotilda (continues) • After concessioning troubles did not go away in fact they increased, the Agreement needed to be improved to ensure higher productivity from the Concessionaire. • The Govt is handling that, but lack of capacity in the railways leads to phenomenal costs and affects trade facilitation. • Solution: Get assistance with better conditions to purchase more equipment; a study to determine the conditions and effectiveness of open access in the railways would help to increase capacity in shorter time than to wait for concessionaire to deal alone. • For Clotilda business had to continue, but still encountered more problems. Now that the business community has heeded to the call for SME entrepreneurship, more and more came on line. Unfortunately, every one wanted to move with speed.
Poor/wrong document declaration! • The speed did not allow them to study systems and procedures clearly, so Clotilda found more and more of her customers were increasing her tension. Every month she would find that her 3 to 4 of her customers have not correctly prepared their import documents , bill of lading etc. For example, instead of endorsing the actual consignee the importer quoted the Clearing and forwarding Agent as the consignee. That calls for documentation alteration. Although Customs, shipping line agent and Port Operator takes two weeks or more , on two recent occasions it 2 months to get the customs release. It is common that much longer time is taken than the container free holding time resulting in heavy container demurrage and storage costs. Solution: Get assistance to conduct Sensitization seminars to importers in the region, because when asked to pay these heavy claims many just refuse .
Documentation(continues) • At times she requested other C&F Agents to assist when traffic volume increased it was found that many of the former were not conversant with the customs rules and regulations so could not advise client correctly . Result delays and penalties. • Many occasions occur when Shipping line report that her client’s containers were short landed –e.g. instead of 6 as on the bill of lading – 4 had landed. Going through the process of getting a short landed certificate and this took 2 weeks. However , more often the Shipping Line fail to give correct information or delays arrival information leading to additional days and costs. • There is need for capacity building Assistance to train the service providers on the import procedures as well as sensitize them on the impact of their performance. A training with more focussed and practical approach
is required to improve handling of documentation. With 70% of documents currently rejected impact of training should see these numbers reduce. • Ms Clotilda presented her observations to the Corridor for assistance. She sounded that Lack of coordination of the industry results in formulation of rules and regulations which impact each other and add costs to the importer/exporter. • On consideration that is an accepted challenge. While the latter is the business of the Corridor, getting in sight of some of the best practices will help the corridor management to be more clearer and more persuasive in harmonising the key players of the industry. Assistance is requested in terms of TA and or Study Tours.
Transport Capacity problems. • With average dwell time of 30 days for transit traffic there is no doubt that the corridor has serious transportation capacity problems. There is need for the Corridor to examine to the exact reasons for low investment in trucks. As although the truck mode is more costly, availability of trucks is critical to port operations in early off take of goods.. • Infrastructure and equipment is in bad shape in both the Railways and the road. • The Corridor management request s assistance to establish this fact so that correct measures can be taken. • The call is to support the corridor to take action and coordinate the service providers.
Other Challenges Faced and How Addressed • Challenges: • Data Collection: Regional Stakeholders consultations cannot be held as frequently as preferred . • To reduce border delays and regulatory checks along the highway in order to create a faster turn around of trucks along transit routes • Documentation: Computerization of documentation and an electronic interface between port users and port operators. • Many of the processes in the clearance process appear to happen consecutively as opposed to simultaneously. • Conflicting Regulations: To remove bureaucracy and checks in the release of containers by shipping lines impacted by debts on demurrage, deposit collection and refunds. • Capacity constraints in cargo off take capabilities of the railways, as well as on the Lake Victoria. • Capacity constraints at Dar Port due to high container dwell times.
Measures being taken: • Efforts are underway to strengthen the National Stakeholders Committees so as to handle fully issues of trade facilitation in logistics and transport. The Port Decongestion Committee formed with the Govt has enabled realisation of the need to work together in the industry to co-ordinate efforts with a view to coordinate the service providers. • Regular workshops help to establish the changes needed and agreed, later followed up by a Special Sub- Committee to follow up implementation of agreed issues of which TTFA is the Secretary. All issues agreed are allocated responsible institution (with lead institution if many) and timeline. • In the same manner as above, follow-up with the Governments on issues of inter-state like border posts.
Measures (contd--) • Support form SSATP for baseline survey and eventual setting up of the Observatory will improve data collection along the corridor. Currently Collection of data on container dwell times from the Container Terminal and ICDs. • Construction of Inland Clearance Depots in Dar and revival of the Mbeya and Isaka Dry Ports to augment container storage capacity. • Installation of Asycuda ++ at border posts partially reduces delays to traffic as well as reducing costs to the operators for example in areas of bond cancellation. To be completed on Central Corridor Routes by 15th March 2009.
Conclusion: • Shipping Agents/ lines to be sensitized to harmonize their operations in container interchange points as done in other corridors. • Goverments to expedite investments and improvements in the railways. • To finalise the legal and operational framework of the National Stakeholders Committees so as to bring about the required coordination and cooperation among the stakeholders. • Assistance to develop one stop border post between Tanzania and Uganda; Tz and Rwanda; Tz and Burundi.
THANK YOU FOR YOUR ATTENTION. • Ahsante sana.