With the ever-increasing customer expectations on shipment visibility, more and more shippers are using multi-sensor tracking devices to monitor different attributes of their shipments in the entire cross-border logistics movement, including temperature, humidity, location or shock. There are a lot of challenges faced in the customs clearance of these electronic tracking devices when moving across different countries; oftentimes, the customs procedures and requirements for these tracking devices are very complicated that causing unnecessary delays and damages to the shipments.
A research project1 was carried out by the postgraduate students of TLI-AP (The Logistics Institute, Asia Pacific) in NUS (National University of Singapore) and supported by GEODIS to investigate the existing regulatory requirements on cargoes crossing border with electronic tracking devices. In this project, the research students focused on a few countries in Asia Pacific region to understand the current regulations on importing and exporting of cargo tracking devices. In addition, surveys also sent out to a few suppliers of tracking devices as well as end-users (both logistics companies and customers) to understand more about the existing challenges of shipment tracking in international shipping.
(1) There is no universal regulatory procedure or guideline established in the handling of tracking devices in international shipping.
(2) When a logistics service provider wants to ship cargo with electronic tracking devices, customs declaration for the tracking devices is a challenge – as the tracking device is an add-on service to enhance the shipment visibility during transportation. If the additional customs requirement incurs costly customs processing charges and complicated procedures, this would greatly impact the business viability of such value-added service.
The research team has proposed a few recommendations in order to mitigate the existing challenges in using electronic tracking device for cross-border shipping:
International governing bodies such as WCO (World Customs Organization) or WTO (World Trade Organization) to issue clear guidelines on how to handle electronic tracking device used in international shipping. This is similar to the guidelines issued by WCO under “Customs Convention on Containers, 1972” (Container Convention) includes provision on the temporary admission of containers without the need for customs declaration. Likewise, WCO also published a set of guidelines in May 2021 on how to handle envirotainers for international vaccine transportation, these guidelines help to remove any un-necessary customs delay at the border.
Similar approach on issuing a universal operating guideline for electronic tracking device in cross-border shipping can also be accomplished via bilateral or regional FTA (Free Trade Agreement) such as RCEP (Regional Comprehensive Economic Partnership) or CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). Governments from multiple countries come together to establish simplified customs procedures for cross-border shipment tracking will greatly enhance the efficiency of supply chain flow for specialized products.
ATA Carnet is an international customs document that permits the tax-free and duty-free temporary export and import of goods for up to six to twelve months. Established by the International ATA Convention and controlled both by the World Customs Organization (WCO) and International Chamber of Commerce (ICC), ATA Carnet could be used to simplify international shipping with electronic tracking device. However, ATA Carnet may still encounter similar issues in import and export of the sensor when:
One practical and effective recommendation to mitigate the current situation of using tracking device in cross-border shipping is to apply for Advance Customs Ruling before cargo is shipped. Customs administrations in many countries provide advance ruling services to the traders offering binding decisions by the authority on specific particulars in relation to the intended importation or exportation of goods.
Under GEODIS global trade advisory service offering, we support our customers by presenting all the relevant details and supporting documents to local Customs department during advance ruling application. Customs dept. could provide a firm and official directive on how the electronic tracking device to be handled during importation with the cargo, as well as how to handle the recycling of the device upon exportation. For all multinational companies operating in different continents, it is absolutely useful to have clarity in customs requirements and procedures before cargo being shipped so as to avoid shipment get stuck at the customs due to clearance issues of tracking sensor, as well as to ensure full regulatory compliance for their customs reporting.
Due to the growing demand on the use of electronic tracking sensor in shipping over the last few years, complicated and additional customs procedures will result in some traders and logistics providers ignoring the regulatory requirements with no declaration and exposing themselves to potential customs violations. As the world’s leading customs brokerage service provider, GEODIS provides a full range of professional customs & trade compliance solutions to all our clients globally. We have more than 900 professional trade experts worldwide to support our customers in researching customs and trade regulations as well as providing effective solutions to ensure efficient cargo shipping and full customs compliance at all times.
Feel free to contact us if your company need any support at: [email protected].
1. Koh, W. L; Liu, Z. Y. and Lu, Yi. C. (2021) “Challenges in Customs Clearance for Cross-border Shipping with Multi-sensor Tracking Devices”, Master Thesis, National University of Singapore.