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ICLogistics-Balkan Trade Corridors

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					            INNER
CIRLCE
LOGISTICS
INC.





     ICT
Based
Trade

       Facilitation

    The
Silk
Road
of
the
21st
Century

                         

                         



Executive Summary
An ICT based trade facilitation solution (Inner Circle Logistics Trade Facilitation Solution-ICLTFS),
demonstrated during the summer of 2008 offers that provides an immediate impact on trade volume and
support for trends in the growth of East-West trade through the advantages, savings and opportunities to
improve the efficiency of intra-company, Business-to-Business (B2B), and Business-to-Government
(B2G) data and document exchange. Using the Inner Circle Logistics (ICLogistics) Software Suite,
allows for unparalleled product visibility throughout the global supply chain. During a Pilot
Demonstration funded by the United Stated Trade and Development Agency (USTDA) and in
conjunction with Customs Administration Republic of Macedonia (CARM) the ICLTFS was used to
successfully create a “single window” data entry and electronic document exchange system. This system
allows for businesses to submit all import and export documentation in electronic format to one address
that can be accessed by all authorized customs and border agents in Macedonia, Serbia and Bulgaria in
advance of a shipment’s arrival at the border. The system enables Customs and Integrated Border
Management (IBM) officials to process information faster and share documentation across the border to
avoid duplication. This simplified process complies with all current efforts to standardize trade
documentation and processes by using the UNeDoc format for trade documents. This solution allows for
ease of access and efficiency to required government controls for the business community, creating the
integration needed to provide the critical linkage to create a Silk Road for the 21st Century.

The reemergence of this modern Silk Road can be traced back to changes in the geo-political climate,
mutual economic interests, and strategic allegiances for the movement of labor and capital that lead to
increased globalization and economic integration due to the comparative advantages offered by the
mutually beneficial flow of goods and services. These economic realities and the opportunities that they
present provide Governments and the private sector with an impetus to find mechanisms to capture these
strategic benefits and create sustainable growth. With the rapid improvement of transportation
infrastructure and increasing regional stability as countries progress towards EU Integration, operators are
paying increased attention to the Balkans. Forward thinking countries in the Balkans are positioned to
capitalize from these corridors for global trade in a way that has not been witnessed since the wane of the
original Silk Road between the 14th and 16th centuries. Many of the ancient trade routes that crossed the
Silk Road were the foundation of modern day trade corridors that cross Europe and Eurasia. The Silk
Road of the 21st Century is one built on the advancements in ICT infrastructure, web-based technologies,
and the understanding that continual innovation is a must to access and benefit from the global supply
chain. Leveraging these technologies is of paramount importance to countries that find themselves along
East-West trade corridors. The reduction and/or elimination of transaction costs that impede corridor-
based trade is possible using the ICLTFS by introducing an ICT infrastructure that makes the process of
moving goods and communication along these corridors easier and cost efficient. These efficiencies
allow developed and developing markets closer access to key trade goods. Strategic opportunities exist
for the countries involved that cross economic sectors and political lines. These opportunities address
individual country goals and those of the international community. Macro and micro economic stability
in turn helps improve overall regional stability, strengthen democratic governance, and improve regional
security cooperation as a result. The improved and reliable access to global supply chains and regional
trade corridors that the ICLTFS provides creates benefits that cross public and private sectors and offer
the potential for long term economic growth and improvement in livelihoods across countries. These
benefits are both achievable at macro and micro economic levels. These benefits are possible by
providing measurable impacts in three critical areas for global trade: border crossing procedures, trade
costs, and standards.




                                                                                                          2
Table
of
Contents


Introduction ................................................................................................................................................... 4


Balkan Trade Corridors ................................................................................................................................. 5


    Transaction Costs & Corridor Based Trade.............................................................................................. 5


The ICLogistics Trade Facilitation Solution ................................................................................................. 6


The Benefits of the 21st Century Silk Road................................................................................................... 8


    Border Crossing Procedures ..................................................................................................................... 9


    Trade Costs ............................................................................................................................................. 10


    Standards................................................................................................................................................. 10


Conclusion................................................................................................................................................... 11





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Introduction
In 1877, the German geographer Ferdinand von Richthofen first used the phrase “The Silk Road” to
describe a vast expanse of land stretching from China to Western Europe that consisted of various trading
routes bringing silk, spices, and other goods to Western European markets. In reality, these trade routes
were actively being used for thousands of years prior to this definition providing a steady flow of goods,
culture, religion, and East-West interaction that created the basis for the modern world as we know it.
After a period of decline and disuse due to political instability, exacerbated by the formation of spheres of
influence and “pact-based trading” witnessed during the Cold War, these strategic trade routes are once
again an important corridor of exchange between the Eastern and Western worlds. The reemergence of a
modern Silk Road can be traced back to changes in the geo-political climate, mutual economic interests,
and strategic allegiances for the movement of labor and capital that lead to increased globalization and
economic integration due to the comparative advantages offered by the mutually beneficial flow of goods
and services. These economic realities and the opportunities that they present provide Governments and
the private sector with an impetus to find mechanisms to capture these strategic benefits for sustainable
growth. The Silk Road of the 21st Century is one built on the advancements in ICT infrastructure, web-
based technologies, and the understanding that continual innovation is a must to access and benefit from
the global supply chain. Leveraging these technologies is of paramount importance to countries that find
themselves along trade corridors. Worldwide the Internet and spin-off technologies are recognized as a
catalyst for fundamental change in the way that governments and business operate. Today, experts and
insiders are focusing, not only on the macro effect the Internet has on transparency and functioning but
also, on how Internet technologies positively affect internal and external processes. ICT infrastructure
makes improvement achievable in the speed at which trade takes place by providing easier
communication and exchange between the private sector, government agencies, and across borders. On-
line access to supply chain information in a secure environment with real-time data access offers
significant opportunities to not only improve transparency and corruption initiatives that strengthen the
public sector through improved security, revenue generation, and confidence but also, private sector
competitiveness by providing information for decision making, better asset visibility, and management
that leads to a lower cost of trade. It is on this premise that the Silk Road for the 21st Century is being
built

The ICLTFS showed how these technologies can be combined to provide a solution that makes the Silk
Road for the 21st Century a reality with long term positive implications for global and regional trade.
This solution is made possible using a cost effective ICT solution that allows for the exchange data and
documents (B2G & G2G) while simultaneously positioning the data in a manner that allows for efficient
and thorough analysis by the private and public sectors. As opposed to regimes that guarantee security
and visibility, the ICLTFS demonstrates a solution that will provide these services along modern-day
trade corridors while simultaneously giving countries access to current trade initiatives promoted by
multilateral organizations such as the EU, UN, WCO, WTO and WB. Using this same solution to
implement proven processes, Supply Chain Management (SCM), and adoption of innovative technologies
to better access global markets through corridor based trade, private business and their Governments will
leverage this position into sustainable profit margins, long term growth, and sustained economic
development. The remainder of this White Paper outlines how corridor based trade is dependent upon
improvements in ICT infrastructure and how the ICLTFS demonstrated in real-time along Corridor X
provides these improvements. Information is provided about Balkan Trade Corridors, the ICLTFS,
impacts and benefits associated with its implementation, and the political realities surrounding its
adoption.




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Balkan Trade Corridors
The Balkans are located at a strategic hub between Asia and Europe, providing locations in high demand
by logistics operators due to their strategic importance for manufacturing, value added and shipping
visibility. With the rapid improvement of transportation infrastructure and increasing regional stability as
countries progress towards EU Integration, operators are paying increased attention to the Balkans.
Forward thinking countries are positioned to capitalize from these corridors for global trade in a way that
has not been witnessed since the wane of the original Silk Road between the 14th and 16th centuries.
Many of the ancient trade routes that crossed the Silk Road were the foundation of modern day trade
corridors that cross Europe and Eurasia. For example, Corridor X traverses Norway, Finland, Poland, the
Czech Republic, Slovakia, Austria, Slovenia, Croatia, Serbia, Macedonia, and Greece. This strategic
corridor also includes branches that enter Bulgaria and provide linkage to Turkey, Central Asia, and the
Middle East making it one of the most strategic transportation routes in Europe. Aside from this critical
trade corridor, several other important trade routes intersect the Balkan Peninsula (Corridors IV, V VII,
and VIII). When taken as a whole these trade routes link Balkan Countries to every major city in Europe
and provide trade linkages to the countries of Central Asia and beyond. Several factors are behind the
reemergence of the Balkan Peninsula as a prominent factor in global trade. Two of these factors are the
economic expansion of Southeastern Europe (SEE) countries that created a rise in disposable incomes and
the concerted efforts by the EU, UN, US, and WB to improve the transport infrastructure throughout the
region. Combined, these efforts have given rise to several years of consistent growth in regional
export/import that are outperforming the current EU average. The Silk Road for the 21st Century can
further fuel this growth by opening new markets that lead to economic opportunities for countries include
job creation and increased foreign investment opportunities which in turn fuels reductions in poverty,
increase regional and democratic stability, and fosters regional security and cooperation. In order for this
concept to be successful, a combination of efficiency, security, and transparency must be present and
functional that leads to the sharing of information and trust between both the private and public sector, but
more importantly across borders to multiple countries along trade corridors.

         Transaction Costs & Corridor Based Trade
The transition to a sound, market-oriented economy driven by private sector growth and a competitive,
free-market environment is the key to the success of economic reform in countries that make up SEE.
Strengthening private sector competitiveness through improved infrastructure, increased productivity and
a transparent regulatory environment that reduces administrative barriers is fundamental to ensuring long
term economic growth. The international community has worked diligently to improve the business and
regulatory environment with the intention of preparing SEE economies for the rigors of competitive
pressure and global market integration. Through these efforts significant time, energy, and resources
have been allocated to job creation and improvements in livelihoods across the region. The original Silk
Road began to decline primarily due to political instability that led to the breakup of the cohesive
governing bodies that provided security and passage into smaller units ruled by regional warlords. This
led multiple check points and fees payments to these rulers as each excised a “toll” for access, making
trade more time consuming and expensive. This breakup also disrupted safety along the Route, furthering
increasing the costs of trade as a result of this banditry, corruption, and increasingly requiring trade
caravans to provide their own security. These transaction costs eventually became prohibitive to the point
that other trade routes became more practical, efficient, and reliable. A similar situation exists today in
the wake of the breakup of the Soviet Union and Yugoslavia. Now, many borders exist that are governed
by multiple forms of governments and regimes that require various forms of antiquated paper-based trade
documents and provide little capability for shipment visibility due to an often non-existent ICT
infrastructure. These factors lead to modern-day transaction costs that cross both into the public and
private sectors. The first factor that creates barriers to corridor based trade is policy based. Many
countries enact protectionist policies, encompassed in the country’s legal and regulatory schemes, which
create multiple control points along transit routes, high import/export taxes, and cumbersome border


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crossing procedures. These policies create formal and informal barriers that impede cooperation due to
poor governance, corruption, and criminal activity that become institutionalized and resistant to change.
Impediments to corridor trade are further exacerbated when countries react to each others policies,
creating a prohibitive “infrastructure” resulting in regional discrimination of neighboring Governments
through complicated customs policies and tariff schedules that stifle economic productivity throughout
the region. The business community also creates transactions costs associated with corridor-based trade
due to a lack of economic diversity and inadequate markets of scale that erode the productiveness of
improved corridor based trade. Typically, businesses from developing countries fall victim to a small
market mentality that does not foster the diversification and commitment to innovation needed to capture
foreign market sales. This problem is made worse by intense competition that often leads to cannibalism,
creating social and business network effects that lead to barriers in cooperation, despite the fact that
cooperation could lead to long-term benefits for both parties. This creates a cycle that makes it
increasingly difficult to access these important foreign markets needed for growth, sustained profit
margins, and needed scale to break out of this cycle. The reduction and/or elimination of these
transaction costs is possible with the ICLTFS by improving trade facilitation and business
competitiveness across these trade corridors introducing a ICT infrastructure that makes the process of
moving goods and communication along trade corridors easier and cost efficient. These efficiencies
allow developed and developing markets closer access to key trade goods. Strategic opportunities exist
for the countries involved that cross economic sectors and political lines. These opportunities address
individual country goals and those of the international community. The next section describes the
ICLTFS in detail and provides additional information describing how the solution facilitates corridor
based trade initiatives and document sharing along trade corridors.

The ICLogistics Trade Facilitation Solution
On July 1st the ICLTFS was successfully demonstrated in partnership with the USTDA and the CARM.
The solution creates a “single window” data entry system for Customs documentation for the Customs
Administrations of Macedonia, Serbia and Bulgaria, greatly simplifying the process for the business
community and allowing greater cooperation between SEE neighbors on strategic issues. The solution
integrates Automatic Identification and Data Capture (AICD) and Radio Frequency Identification Devices
(RFID) technologies with the added flexibility of combining these data elements with electronic trade
documents that can be entered and distributed in multiple languages for data reporting that is designed to
be operations oriented. The ICLTFS provides the connectivity required to complete the "last mile" of
supply chain integration in an inexpensive and easy-to-use format. It delivers significant cost savings,
international reach and an unprecedented level of access to critical information by combining a B2B
technology model with a unique process for B2G and G2G data and document exchange. The
ICLogistics’ Software Suite combines Web-based data and document management, the integration and
information management capabilities of enterprise resources planning with Department of Defense level
security to power full enterprise integration. The Pilot demonstrated the flexibility of the solution to
provide access across trade corridors and trading partners by incorporating a diverse cross-section of the
public and private sectors. These partners included the businesses Alkaloid, Learnica, and Tikves; freight
forwarders Birkart Globistics and Kuehne & Nagel; and Custom broker SkySped International. The
Pilot’s technology partners included Sun Microsystems (hardware and servers), Motorola (Canopy
SystemTM ), GeoNET GPS, Neology and Motorola/Symbol Technologies (RFID and AIDC technologies).
These above partners’ tools were coordinated allowing for the movement of six shipments through the
required processes to export from Macedonia and be moved along Corridor X. All parties involved in the
Pilot were linked using the solution with access to all required documents before the shipment reached the
In-Land Customs Terminal and BCP Tabanovce. This linkage during the Pilot was provided through the
CARM intranet system for added security however, the ICLTFS provides tremendous hosting flexibility
and ability to work seamlessly with internet infrastructures such as the Motorola Canopy SystemTM. To
illustrate this flexibility, a full backup of collected Pilot data was supported using SUN Microsystems
servers housed at the University of Kiril and Metodi’s Faculty of Mechanical Engineering. This backup

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system allowed for data recovery and transition in the event of a disruption of power or internet
availability using the primary system, illustrating the ability to “bundle” the software solution with proven
hardware systems. The need for data recovery from backup servers and ability to transition to a backup
internet system was illustrated during the first Pilot Day as a powerful storm disrupted power supply and
internet connectivity at BCP Tabanovce. This resulted in delays in border crossing of up to 24 hours.
Having these backup systems in place would allow Customs and IBM to quickly get back “online,” keep
delays to a minimum, and efficiently manage shipments and processing. In addition, the Motorola
Canopy SystemTM can also provide crucial linkage in remote areas for better overall coverage at all BCPs.

The ICLTFS was designed to meet the requirements of global standards in trade, as well as handle any
type of documentation using a custom Graphical User Interface (GUI). The solution has the ability to
handle integration between trading partners with varying ICT infrastructures and levels of sophistication,
critical for integrating trade corridors that include SMEs and large multinational corporations from
developing and developed countries. Data flow of this type, which is not software platform dependent,
can support integrated supply chain and border management across trade corridors, allowing for
cooperation and information sharing among companies, countries, and inspection agencies to improve the
functioning of their supply chains, minimizing costs and improving information exchange that lead to
further reductions in wait times at the border and better policing of illegal shipments. All of these
efficiencies are possible without reductions in security. A key aspect of the ICLogistics’ Software Suite
is its powerful security measures to maintain the confidentiality of data elements as deemed appropriate
by the data’s owner(s). New users are integrated by simply installing the software and having access to
an Internet connection, which makes this solution easily scalable, seamlessly using existing data elements.
Current data and document requirements can be met today, while quickly managing the inevitable
changes and future requirements with minimal disruption to businesses or government agencies. This
capability results in unprecedented access to data and information in the form of web-services reports that
increase regional trade facilitation and business competitiveness by presenting trade data in useable and
efficient formats. Each shipment during the Pilot was tracked throughout the supply chain with the
AIDC/RFID hardware (tracking devices, security seals, and truck/driver/shipment identification tags and
readers, and a wireless internet system) installed. A GPS component was integrated into the solution set
to provide seamless tracking of shipments throughout the delivery process. This addition provides a link
to reports containing data about shipments, allowing for real-time shipment visibility using integrated
maps or movement history in map and detailed report formats. Documentation and shipment tracking
were integrated using the ICLogistics’ Software Suite in a secure Virtual Relational database (VRdb)
where the data was made available in real-time to the shippers and required governmental agencies using
the ICLTFS. Static and dynamic data are stored the VRdb that can be linked or combined to create
reports or provide existing systems with the necessary data to improve decision making capabilities. In
the case of the trade facilitation solution, an association was made at the beginning of the delivery process
between the RFID tag IDs (truck, cargo, and driver) and trade documents related to each shipment. Thus,
the data from all the RFID tags read throughout shipping were linked in the database to the corresponding
shipment and associated shipping documents. The data can be “cut” in any number of ways and with any
type of underlying trade and transportation data elements, allowing data to be pre-populated, updated and
shared with multiple users who have varying levels of access for an unlimited combination of data flow
possibilities. These reports avoid a “data dump” by routing specific information to those who have “need
to know” in a format that is suitable to gather the requisite information pertinent to the task or situation at
hand and thereby improving resource allocation and border security measures.

These web-services reports allow for the electronic exchange of critical data across borders that underpin
the development of a Silk Road for the 21st Century. A good example of this cross-border communication
is the exchange of the Customs Information List (CIL). The CIL is a report of shipments processed at a
border crossing point over a period of time between countries that choose to share this information. With
the ICLTFS, the CIL for Pilot shipments was available for electronic, exchange creating instant access to

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information currently available, using paper-based exchange, once each day. This electronic exchange is
possible in several ways. First, the CIL can be exchange as a list of shipments that can then be “cut” in a
myriad of ways. In addition to this format, each CIL can be viewed individually to provide an additional
layer of information that is quickly accessible, printable, and available for intra-agency exchange for
further analysis and evaluation. The ICT solution demonstrated provides the capability of electronic CIL
exchange in the form of a report that allows the Customs officer to view each shipment individually as
needed. This allows Customs authorities to exchange cross border information by shipment, hour, shift,
or when risk assessment analysis suggests that critical data needs to be shared. Another way in which the
demonstrated solution improves security is through improved accuracy and time requirements to compile
critical trade information between borders. Reductions in the time associated with data entry and key
stroke error add improved accuracy and veracity to regional trade data while simultaneously allowing for
improved personnel management for better focus on other critical areas as the amount of man hours
needed to enter and verify data is reduced.

A key aspect of the creating reliable and efficient corridor based trade is the use of and adherence to
international standards and trade initiatives. A good example of this is the use of UNeDocs for
international trade. The use of these electronic documents provides for document compatibility along
corridors where countries may have different document structures and requirements. The ICLTFS
provides the ability to view these documents in multiple language formats that contain the same data
elements and structure for added flexibility to agencies and businesses. During the Pilot UNeDocs
(Single Administrative Document (SAD), International Consignment Note (CMR), and the Phyto-
Sanitary Certificate (PSC)) were used for each of the six shipments. These trade documents were entered
once using the “single window” port the solution provides and moved electronically prior to arrival at In-
land Customs and the BCP Tabanovce for processing. These documents were available in Bulgarian,
English, Macedonian, and Serbian. Other language formats are available for every country along
Corridor X and other trade corridors worldwide providing critical linkage for global supply chains. In
addition to the primary trade documents highlighted during the demonstration, the ICLTFS provides
every document currently available through the UNeDocs pallet in multiple languages. This ability
improves global trade opportunities in the face of varying speeds at which developing countries adopt
both electronic trade documents and the standardized format offered by UNeDocs. The ICLTFS provides
for real improvement in both the capacity of Customs operations and the private sector competitiveness
needed to access and survive on the Silk Road for the 21st Century. In the next section, a more detailed
explanation of these capabilities and opportunities are presented along with key benefits that the solution
provides associated with costs, border crossing, and standards along trade corridors.

The Benefits of the 21st Century Silk Road
Improved and reliable access to global supply chains and regional trade corridors resulting from the
ICLTFS creates benefits that cross public and private sectors and offer the potential for long term
economic growth and improvement in livelihoods across countries. These benefits are both achievable at
macro and micro economic levels. Some of these macro-level benefits that affect both the public and
private sectors include:
• Increased economic opportunities through
    o market expansion
    o job creation
    o foreign investment
    o poverty reduction
• Increased regional stability
• Strengthening of democratic governance and transparency
• Fostering of regional security and cooperation on issues of trafficking and terrorism.



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Benefits to the public sector and Customs Administrations associated with implementation of the ICLTFS
are substantial and include:
• Decreases in border transit times
• An immediate impact on trade volume and support for trends in growth in East-West trade
• Improved and reliable government revenue generation from trade and the overall rate of economic
    growth with associated tax revenues
• Border security is improved by more ethical and transparent border crossings and the reduction of
    illegal trade
• Preservation of public infrastructure by decreasing corrupt practices and access to better information,
    leading to justification in needed public infrastructure improvements
• Provision of evidence to justify changes to the institutional framework
• Reduced operating costs by eliminating fax, phone, manual data entry and related errors
• Increased systemic and procedural predictability using an integrated and automated trade process for
    efficient data exchange
• Avoid duplication of controls along a given corridor
• Transfer advanced information to multiple agencies before vehicles arrive at borders
• Bolstered confidence in the public sector through increased transparency of procedures and
    regulations and lower risk in cross-border trade.

Direct benefits to the private sector accrue via regional growth opportunities provided by delivery of a
quality solution that fits budget constraints and allows for the:

•   Enhanced regional competitiveness by the participation and collaboration allowed through electronic
    trade
•   Increased access to participants and competitors in the global supply chain.
•   Reduced operating costs by eliminating fax, phone, manual data entry and related errors
•   Increased systemic and procedural predictability using an integrated and automated trade process for
    efficient data exchange
•   Access to new business opportunities in other countries leading to greater competition and more
    competitive pricing of goods sold into the national and international markets
•   Creation of regional demand for skilled workers, reducing brain drain.
•   Maximization of throughput of goods at border crossings with minimal delays
•   Avoidance of control duplication along a given corridor.

These benefits are possible by providing measurable impacts in three critical areas for global trade: border
crossing procedures, trade costs, and standards.

         Border Crossing Procedures
Border crossing issues are often cited as some of the more burdensome challenges faced by companies
engaged in global and regional trade. Border agencies often have no mechanisms to exchange data and
information with their counterparts across the border and if policies are in place that allows this exchange,
it takes place using paper based documents. Areas that are improved by using the ICLTFS include
increased efficiency, reduced delays, and improved security and transparency. Creating an electronic
system for in-land terminal border crossing and border crossing procedures that can read, record, and
share information collected through AIDC devices and other electronic data flows has major advantages
in trade facilitation. As the Pilot demonstrated, these benefits include:

•    Time and cost reduction of border crossing by uploading shipment information electronically
     through AIDC devices
•    Improving data reliability exchanged and stored in Customs and customer databases using electronic
     data transfers

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•    Shipment tracking capability to determine where a shipment is located and where a problem might
     exist using integrated GPS technology
•    Improved border security and accountability reducing corruption by increased visibility and
     transparency of procedures, documents and shipments.

This reduces opportunities for corruption among border officials as the exchanged data is stored,
searched, standardized and verified in a VRdb. Authentication technologies like electronic signature
capability and biometric identification further decrease opportunities for corruption and are easily
integrated into the ICLTFS.

         Trade Costs
Findings suggest that there are several areas where improvement can be made to better facilitate global
and regional trade. Trucks and drivers waiting at borders for extended periods contribute to poor asset
utilization and higher delivery costs. Research has indicated that every day of delay reduces a country’s
trade impact by approximately one percent. Zoran Jolevski, Vice Chair, United Nations Economic
Commission for Europe (UNECE) Committee for Trade, Industry and Enterprise Development, noted
that the United Nations Conference on Trade and Development (UNCTAD) estimates that the average
Customs transaction involves 20-30 different entities, 40 documents, and 200 data elements (30 of which
are repeated at least 30 times). This entry, re-entry, and associated errors represent real losses in
efficiency, cost, and manpower. Implementing the AIDC-enabled, net-centric ICLTFS allows for single
point data entry and transfer that eliminates the need for re-keying and enables data sharing among border
agencies and across borders to counterpart agencies, improving efficiencies and the facilitation of global
and regional trade. It is estimated that by eliminating multiple points of data entry, providing data
electronically in advance of shipments, and the sharing of information across agencies and borders, total
shipment transit time can be reduced by 18 percent.

         Standards
The ICLTFS accommodates multiple standards for ICT, language, and document requirements. These
capabilities are a cornerstone of the 21st Century Silk Road. Perhaps the most critical issue is the varying
ICT standards between countries and along trade corridors. The ICLogistics’ Software Suite is designed
to work in conjunction with any ICT platform, cooperating with existing systems rather than requiring
additional investments in new ICT. This minimizes the need for additional ICT acquisition and training
costs that can be debilitating to small business and Governments. Because of the solution’s flexibility, it
also allows users to easily transition to next generation e-Commerce platforms in the future. The ability
of the solution to supply data to multiple users in multiple desired formats provides additional value.
When considering standards across the supply chain and trade corridors, a customer or Government may
have a preferred or required format for invoices and trade documentation that can create a cost burden
that is especially difficult for SMEs to bear. The ICLTFS allows the user to accommodate multiple format
requests for each of its trading partners or multiple Government agencies with ease.

This flexibility of multiple formats, languages, and views is crucial in cross-border trade with respect to
G2G transactions due to issues of national sovereignty. The demonstrated solution eliminates the need to
select one particular country’s forms and formats in order to share information across borders and
agencies. Each country can enter data using its own Customs or IBM documents, in its own language,
and format, while the receiving country can view this information in their preferred format, language, and
layout with no additional formatting or manipulation required. This is particularly important across
borders where countries do not share a language and where Customs Administrations and IBM require a
customized GUI.




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Conclusion
ICLogistics, in coordination with a diverse set of international, private, and public stakeholders,
successfully demonstrated an ICT-based trade facilitation solution that provides immediate impact on
trade volume and supports trends in the growth of East-West trade. The ICLTFS allows businesses and
Governments to improve efficiency and cost savings through electronic document exchange (B2B, B2G,
and G2G) capability and enhanced data management for superior shipment visibility and web-services
reporting that transform key trade data into useable and efficient formats for analysis. This capability was
successfully demonstrated using a state-of-the-art Software Suite that allows for full supply chain
integration and real-time data analysis. This trademark solution provides the technology that makes a 21st
Century Silk Road possible by creating linkages along global and regional trade corridors.

The global supply chain is long and in many cases impeded by cross-border delays due to: border
processes, trade costs, and standards. These realities underscore the need for information technology
support in communication and collaboration. The ICLTFS providing a demonstrated solution that
produces positive impacts in these three critical areas and adheres to the standards and efforts of the EU,
WTO, WCO, and addresses critical areas identified by the TTFSE Projects for the improvement of trade
facilitation in the Balkans:

•   Continued work to strengthen and harmonize the regions’ policy and regulatory framework
•   Implementation of Integrated Border Management Principles
•   Optimized border processing
•   Border processing using electronic documents.


The ICLTFS supports SCM by enabling links in communication and collaboration between trade partners
and Governments for effective and efficient decision making. Businesses in the Balkans are in a position
to capitalize on their strategic locations on and around major trade corridors that intersect the region.
SCM strategies that are provided as a result of the ICLTFS solution are enhanced SC visibility and trade
compliance, allowing companies that leverage this supply chain visibility platform to decrease landed
costs and lead times while increasing supply chain budget accuracy. This last point is crucial to
businesses with little capital to remain competitive. Using the ICLTFS allows for automated import or
export compliance procedures that increase the speed at which customs procedures are cleared, while
improving data accuracy and clarity with improved event tracking, data management, and
collaboration/relationship management. Throughout the world use of systems that integrate and automate
the trade process are recognized as crucial to success in the global marketplace. Implementing an
automated “single window” provides the basis to employ standardized electronic documents for trade that
replace an antiquated paper based system that is inefficient in the face of global trade and the need for
supply chain integration, making it easier for those countries and their economies that use this web-based
system to compete in the global marketplace.

Any strategy aimed at improving and promoting corridor based trade must address and overcome the
transaction costs of cross-border trade. In addition to the technical solutions provided by the ICLTFS, the
Project surrounding its implementation focused on several methods and mechanisms to address this need.
These efforts included high level meetings and interactions between Government officials, academicians,
and the business community, involvement by the international community, viable improvements in
security and infrastructure development, and the building of trust and relations within Governments,
across borders, and between the private and public sectors. To implement a trade facilitation solution that
creates the 21st Century Silk Road, several broad policy objectives should be the focus for countries along
trade corridors. Primary among these objectives is the reduction of high transportation costs and transit
times to produce more predictable corridor based trade with focus on mechanisms to establish a


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consensus approach that includes both the business community and academic institutions. The inclusion
of these important stakeholders helps privatize much of the cost associated with trade facilitation, create
positive externalities that strengthen other economic sectors as a result, provide incentive for barrier
reduction, and institutionalize these concepts through contributions to research, policy, and function that
in turn lead to long term benefits in the form of improved governance, security, and infrastructure. One
method to leverage this solution into long term sustainability is adoption of the Supply Chain Centers of
Regional Excellence (SCcORE) Model, developed in-conjunction with the Pilot, to institutionalize the
concepts of SCM and technical innovation as drivers to improved trade facilitation. These Centers of
Excellence represent a model of public-private partnership that will enable technology transfer, training,
and process infrastructure to support international and regional efforts for cross-border trade and supply
chain integration. SCcORE will play a central role in fostering the competitiveness of SMEs and will
initially incorporate the countries of Macedonia, Bulgaria and Serbia with the intention to include other
countries and locations in the future. In addition, the Center is seeking to partner with other educational
institutions around the world for collaboration and competitive benchmarking efforts.




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