1. 1 Project no. 218588-FP7-SST-2007-RTD-1 INTEGRITY INTERMODAL GLOBAL DOOR-TO-DOOR CONTAINER SUPPLY CHAIN VISIBILITY Instrument: Large Scale Integrating Project – CP-IP Thematic Priority:Co-Modality – Encouraging Modal Shift and Decongesting Transport Corridors

2. Continuing global container growth – intra Far East, Europe and USA Bottlenecks in European ports and hinterland Complex logistics chains Information gaps New security regulations Call for supply chain visibility Background

3. Supply chain data – missing, inaccurate incomplete Lack of information flows Late arrival notices Incomplete seal checks Container deviation Unpredictable and unreliable procedures Increase inventory Goods locked in security processes Increased costs and reduced quality of service Problems to be Addressed

4. Link elements of the supply chain through tracking data Enhance trade facilitation Use sophisticated equipment, including scanning in ocean ports Supply chain visibility - accessibility, reliability, availability, sustainability, accountability, transparency, security, affordability and seamless solutions Build a Shared Inter-modal Container Information System (SICIS) accessible to all eligible stakeholders, large and small. INTEGRITY aims:

5. INTEGRITY is embedded into international strategies and initiatives: SAFE Framework of Standards - push cargo control to the exporting country and Mutual Recognition; EU/China Customs (SSTL) European Union - DG TAXUD, DG Enterprise, DG TREN AEO concept and scanning/monitoring technology - “trust but verify” Raise the standard for door-to-door container chains Providing high quality, accurate, timely information.

6. Terminal and Transport Operators Logistics Providers & Shippers Customs Authorities Academia & Technology Providers Coordinator INTEGRITY is a technology and processes integration project with a strong focus on data integrity It is a three year, €6.5 million, commercial research project, started in May 2008 with the following consortium members:

7. tracking and tracing - control and place; status and availability; continuous monitoring; event/exception management for container shipments; a central information directory for cargo information; compliance with Customs requirements; enhanced logistics processes and seamless flows. Shared Inter- modal Container Information System (SICIS) to provide web-based and back-end solutions for:

8. Contract of Sale, Invoice and Payment Current Customs and International Trade Systems Consignor or Exporter Consignee or Importer Container/Carrier Manifest Customs Export declaration (with overvalued invoices for recovery of tax) Risk Assessment for admissibility and compliance Post Export Assurance by Customs Post Clearance Assurance by Customs Freight Forwarder or 3PL Freight Forwarder or 3PL Data relating to the goods and the people Data relating to carriage EU Regulation Country B Port 1 Port 2 CARGO 3 rd Country Regulation Country A CARGO Customs Declaration for Home Use or Regimes (undervalued for duty purposes) Fiscal and Statistics Collection CARGO Contracts of Carriage House Way Bill Shipping Note Packing List Letter of Credit Freight Account InsuranceHandling Fees Carriers Receipts Vessel Booking Import Summary Declaration (manifest data) Import Control System safety and security summary declaration from Carrier Risk Assessment for admissibility and compliance Bill of Lading

9. Masters Thesis – Who Packed the Box? Identified Problems  Supply chain management is inconsistent  Movement of their goods is not visible to the buyer and seller  Information deficiencies and gaps  Costs are not clear  Goods are not always described properly  Data at export is divorced from the data at import  An importer is making a declaration about goods they have not seen and that are packed by the consignor

10.  Build a web-based, seamless, electronic data ‘pipeline’ with authorised levels of access to data  The consignor packed the box and should describe what’s in it  Consignment Completion Point (CCP) with legal responsibility on the consignor  Real-time data on goods and the entities, agreed by buyer and seller, one initial message to import and export Customs, updated as the goods move, visible to buyer, seller and regulatory agencies  Customs use automated targeting tools and identify high-risk shipments earlier and before goods arrive for export  Eliminate redundancies and duplication in the submission of data Masters Thesis – Who Packed the Box? Proposed Solutions

12. MSC Napoli, January 2007 Non-declared and mis-declared goods. 20% of dry containers on deck were more than 3 tonnes overweight - largest single difference was 20 tonnes. No means of identifying who was responsible for the containers and their contents. The sea Carrier of cargo can not provide accurate information relating to the goods being carried. The Consignor holds much of the data that everyone needs. Ship manifests to contain more detailed cargo information. Annual losses in international trade caused by maritime fraud are estimated to be as high as US$31 billion.

13. Supply Chain Language (an example)  The consumer: Sony, LCD TV 42” Black  The shop: Sony, LCD TV, PFL 472-342  The supplier: Stock code, 453673-ADFu7865 472-342  The Terminal Operator: one TEU  The sea carrier: one TEU, 18 tonnes, no reefer, loaded HK, discharge Rotterdam  Export Freight Forwarder: boxes of consumer electronics  Loading 3PL: boxes, electronics, 50” x 30” x 8”, weight 22 kgs  Buyer and Seller: Sony, LCD TV 42” Black, PFL 472-342, 453673- ADFu7865 472-342 2010, value Without a standardised means of describing goods each player ‘talks in his own language’

14. Shared Intermodal Container Information System Consignor or Exporter Consignee or Importer Port 1 Port 2 CARGO Freight Forwarder or 3PL Freight Forwarder or 3PL Data relating to the goods and the people Data relating to carriage 3 rd Country Regulation Country A EU Regulation Country B Import Control System safety and security summary declaration from Carrier Risk Assessment for admissibility and compliance Container/Carrier Manifest SICIS GPS position and trader ID

15. Conclusions A valuable project designed to meet very real supply chain problems; Clarified the activities and players along the supply chain; Customs set a visionary requirement - the ‘pipeline’ concept; Consortium not fully engaged. Reluctance to expose established practices and to embrace change; Proved the concept of container tracking and security; Significant difficulties in capturing consignment data; Weaknesses in supply chain management - role of the consignor and the integrity of transport data including manifests; The Cassandra Project – the future.

16. Future Customs and International Trade Systems Consignor or Exporter Consignee or Importer Carrier Post Export Assurance by Customs Post Clearance Assurance by Customs Port 1 Port 2 CARGO Freight Forwarder or 3PL Freight Forwarder or 3PL Manifest Data relating to the goods and the people Data relating to carriage Seamless Integrated Data Pipeline Contract of Sale, Invoice and Payment GPS position and trader ID 3 rd Country Regulation Country A GPS position and trader ID EU Regulation Country B GPS position and trader ID Contracts of Carriage House Way Bill Shipping Note Packing List Letter of Credit Freight Account InsuranceHandling Fees Carriers Receipts Vessel Booking

17. 17 Frank Heijmann Netherlands Customs David Hesketh UK Customs