SUNConferences, 27th Annual Conference of the SA Institute for Industrial Engineering

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A simulation approach for reconciling customs and trade risk associated with cross-border freight movements
Alwyn Hoffman, Ernest Bhero, Sonja Grater, Anita Schaap, Juanita Maree

Last modified: 2016-10-11

Abstract


Southern Africa critically depends on increased exports to enable economic growth and job creation.  Logistic inefficiencies are however hampering exports, with cross-border freight delays a key contributor that adds cost and unpredictability to the supply chain, making South Africa an unattractive participant in global just-in-time value chains. The detention of cargo consignments at border posts is intended to reduce the risk of customs duties not being paid and to prevent the smuggling of illegal contraband.  These risks must be weighed against the risk to trade caused by unpredictable time delays, and the resulting harmful impact on the economy.  Increased use of ICT technologies has been proposed to enable a more attractive compromise between customs and trade risks.  This study investigates the impact of proposed new measures, including the use of technology, on the efficiency of cross-border freight movements. The research approach will combine the analysis of historical electronic transaction data exchanged between customs and consignors with the simulation of different scenarios for the ICT support of customs processes.  The expected impact of the proposed measures on exports within and from the SADC region, as well as the direct impact on corridor users, is estimated and compared against the estimated cost of the proposed measures.  It is shown that implementation of the proposed improvements should represent an attractive investment for the regional economy.


Keywords


data mining, statistical modeling, system simulation