Post Pandemic Evolution of Global Supply Chains and the Role of Customs

Kashmala Tahseen, Assistant Collector, Pakistan Customs

Articles

 

For much of the world, the pandemic disrupted life as it knew it. From causing an unprecedented public health crisis and overburdening health care systems to disrupting supply chains and trade flows, it will take a long time for us to untangle from the damage caused by the pandemic.

The COVID-19 pandemic disrupted global trade and exposed vulnerabilities in our supply chains hitherto unrecognized. From shortages of personal protective equipment (PPE) to delays in acquiring medicines and food items, the pandemic revealed the key inherent weaknesses in our global trade and supply chains .

As front line fighters against the barriers created by COVID-19, Customs departments had their resilience and flexibility tested by the pandemic, as they tried to maintain vital operations in the face of the crisis.

Short term measures were taken by most customs administrations over the world to check the disruption in supply chains and reduce the need for human intervention. Pakistan Customs, for instance, diligently played its role in facilitating the public in these adverse circumstances.

Measures were taken for swift clearance of medicines, food items, and equipment pertaining to treatment of Covid. Moreover, the government waived off all duties and taxes on the import of essential materials necessary for containing and combating the COVID-19 pandemic and 24/7 clearance of Cargo at Ports/Airports and land borders stations was done during the pandemic to ensure supply chain continuity.

Meanwhile, the web-based customs clearance services helped all clients declare pay and request for services without having to visit Customs Offices.

These, however, were only short term measures. What remains to be seen now is how the long term evolution of supply chains and international trade will take place post the COVID-19 pandemic and how the associated stakeholders will adapt.

With much speculation over the pandemic resulting in permanent changes on global trade, there is expectation that the structure of demand and the associated supply chains in the long run will go major changes.

Industries with extensive value chains including developing countries are likely to undergo drastic transformation. Demand for autos and clothing may go down with many companies opting to continue with the work-from-home modus operandi resulting in lesser need for daily commute and everyday office wear. Similarly, the demand for electronics may go up.

These changes will require supply chain leaders and stakeholders like the Customs authorities to adapt their procedures and processes accordingly.

Long term support to supply chains from Customs will need a major shift in the Customs decision-making process, customs procedures and customs formalities with a reduction in the level of human intervention required in all of these.

Many Governments implemented restrictions related to international trade and transport to curb the spread of the pandemic causing interruptions to international trade flows and value chains leading to negative social and economic effects in the countries concerned.

Consequently, Governments and border agencies, including customs administrations, need reforms to keep trade moving while protecting populations and workers in the face of barriers like the COVID-19 pandemic in future.

One likely key reform area is an increase in the pace of automation in departments like Customs as both firms and government organisations are now aware of the risks of potential disruption in supply chains from pandemics and other eventualities like these.

These risks make the cost of automation a necessary investment required to adapt to rapidly the changing requirements of maintaining supply chains and trade flows.

The World Customs day theme for celebrating the annual World Customs Day on 26th January this year resonates with these expected changes. This year, around the globe, Customs Administrations will celebrate World Customs Day under the slogan “Customs bolstering Recovery, Renewal and Resilience for a sustainable supply chain”.

This year’s WCO theme focuses on the digitization of supply chain processes, instating swift data sharing mechanisms across supply chains and strengthening collaboration of Customs Administrations to make Customs more resilient and better prepared for future contingencies.

Pakistan Customs has already taken steps in line with this year’s theme.

To streamline trade activities across the border and reduce dwell times, Pakistan Customs is serving as the lead agency for implementation of NSW (National Single Window), a platform that will connect relevant government departments with each other and with economic operators like importers, exporters, customs agents, shipping agents, and transporters in Pakistan for efficient management of cross border trade via a single point of entry.

Pakistan ratified the WTO’s Agreement on Trade Facilitation on 27th October, 2015 and under its Article 10.4 committed to the establishment of a trade related National Single Window (NSW) with an implementation timeline of five years with effect from 22nd February, 2017.

Pakistan Customs has not only made substantial progress on NSW implementation but is also already working on improving cross border trade facilitation.

The indigenously developed Customs Single Window has already been implemented in the shape of WeBOC, which handles 90% of Pakistan’s external trade providing 24/7 paperless processing services and end to end automated customs clearance of import and export of goods, thereby reducing customs processing time (under 04 hours).

The upgraded version WeBOC-Glo includes new modules and functionalities that ensure speedy processing and improved user interface. This plays a major role in integration of supply chains and promotion of trade facilitation but will also enhance controls through integrated risk management.

Once fully implemented, the NSW will eliminate the need for physical engagement between the traders and regulators while simplifying the procedures and improving predictability.

So far, Pakistan Customs has shown great commitment and professionalism in its implementation. This shows its resolve towards fostering sustainability which gives hope for a much more resilient, responsive and sustainable system that will be better adapted to crises like the Covid- 19 pandemic in future.

During the reconstruction process after the world begins to assess the real damage the pandemic has wreaked havoc on supply chains globally, Customs will have to assume a leadership role, at national and international levels and work for coordinated border management in an efficient and sustainable manner to ensure that the world is even better prepared the next time a crisis like this arises.

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