Overview of transport operational connectivity and challenges for integrated transport Challenges to seamless border crossing and national strategies for transport facilitation By Sakhone PHILANGAM Vice President - LIFFA Phnom Penh 25th September 2017 AGENDA 1. Current status of cross-border & transit transport facilitation including implementing of international transport agreements 2. National strategies(plans) for transport development 3. Current modal share of each mode of transport and plans for modal shift to encourage sustainable transport 4. Current status of connectivity from ports to hinterland & vice versa 5. Challenges to transport facilitation and possible solutions 6. Proposed LIFFA’s Solutions 1. Current Status of Cross Border & Transit Transport facilitation FUNDAMENTAL ISSUES Current Status Legal basis Remarks Transport permits & Traffic rights Thailand, Vietnam unlimited Bilateral China 20,000 permits Bilateral Cambodia 40 quotas Blateral Myanmar N/A N/A Visa requirement Thailand No ASEAN Vietnam No ASEAN China Yes Cambodia No ASEAN Myanmar No ASEAN Temporary Importation of road vehicles All borders Use of D53 Customs Law Trucks can go anywhere Insurance of vehicle Local provider Law on insurance Cross Border and Transit Mandatory Land Transport Law Vehicle weight and Dimension Axle load 11 tons seasonal factor Maximum weight 40 tons seasonal factor Alteration Allowed Special Transport Permit Overweight/oversize Vehicle registration and Inspection certificate CLVT Mutual ASEAN/Bilateral Pay deemed profit tax and VAT China Mutual Bilateral MM pending agreement 1. Current Status of Cross Border & Transit Transport facilitation Supporting Modalities Current Status Scope/framework Remarks Legal regime Transit Transport Operational CBTA, AFAFGIT R3 & R9 Cross border Transport Operational Bilateral Agreement Most popular Container Regime N/A Declared as goods Need proper segregation Guarantor scheme (container & vehicle) Open but not implemented Customs Law & MOU Pay bond in cash. Must be LIFFA member Designated route Corridors only Customs Law No tool, not ratified Technologies ASYCUDA Declaration Module only TF Needs Manifest Module LAO TRADE PORTAL Operational TF MOIC OTRTS Development stage LIFFA Tool under guarantor scheme I Spot Solution Pilot LIFFA Tool under guarantor scheme Others Subject to needs Private Private use Professional Training AFFA Courses 5 certified Trainers One course conducted for 30 participants MI Training Not attractive* MI Cooperation "Master" degree AFFA institute Under "construction" AFFA TIFFA is leading the role Facilitation coordination mechanism NTFC Active MOIC Funding from World Bank NTC Being reorganized MPWT Joint control at border crossing Danesavanh/Lao Bao Operational CBTA, AFAFGIT Savannakhet/Moukdahanh Under negotiation CBTA, AFAFGIT Domestic Law adjustment SEZ, Dry Port and Logistics centre Vientiane Logistics Park Nippon Express Y/N? Agreement on Dry Port SAVAN SENO Operational Agreement on Dry Port No Business Others Under FS Agreement on Dry Port Boten, Thakhek Facilitation tools Secure Cross Border Customs seal is used Bilateral Agreement Mainly on SOC Efficient Cross Border Transport Under trial Ad Hoc request Trans-loading Operational Bilateral Agreement Most popular * No participants or few from Laos lately 2. National Strategies for Transport Development National Logistics Strategy from 2016 – 2020: 1. International Logistics Parks Development and construction of Dry Port 2. Feasibility study, design and construction of regional logistics Parks at Nateuy and Savannakhet 3. Improvement of international routes linking to Dry Port 4. Development of multimodal transport between road and rail 5. Leading logistics company cultivation program 6. Guarantee Association Development Program 7. Capacity building program 8. Development of law and regulation for the management and promotion of logistics 9. Capacity building program for Lao International Freight Forwarders Association 10. CBTA Implementation and Monitoring Program 11. Common Control Area Development Project 12. Cross Border Checkpoints Standardization Program 13. Cross Border Points Development Project 14. Customs Facilitation Program 15. Use of IT Systems for the management of transport logistics 3. Current Modal Share and Trend ➢ Road transport is the dominant mode Laos PDR as main sectors are within D1 (500-750 km) and because of its land locked status ➢ Demand on cross border and transit transport by road is increasing drastically following the shift to road transport for consuming/ perishable goods and high value goods and the recent measures taken by Lao PDR ➢ Modal shift is expected after completion of Lao China railway link and transport nodes are in place. Preparedness for Modal Shift: ➢ Multimodal Transport Law was promulgated in 2012 ➢ Dry Port/ICD are being developed as transport nodes to service trans-shipment operation ➢ Some operators already use FIATA Bill of Lading (Multimodal) as transport document ➢ Liability Insurance Working Group led by MY under AFFA 4. Connectivity from ports to hinterland – Current Situation 1. Absence of Transportation Node that can support multimodal transport 2. Long process at Border Post (causing congestion)due conveyance clearance since it enters customs territory after the border post 3. Heavy reliance on neighboring countries’ policy: ➢ Problematic for special transports (OOG, DG) ➢ Lao truck cannot enter seaports for various reason 4. Trans - loading operation as there is NO space for container depot 5. Return of empty container is almost immediate 6. Integrated Transport in Laos NEEDS transport Node (Terminal/Dry Port). Mode: Road Truck Node: Seaports Direct delivery Laem Chabang, Vung Ang, Danang to customers Link: Asian Highway AH12, R12, R9 Delivery to LLSE Bonded warehouse BorderPostLao Problem occurs here! 4. Connectivity from ports to hinterland – The Problem! Current Process A 1. Clearing agent (CA) wait for Clearing agent trip truck arrival at point 1 or go to point 2 to get all B documents from driver via trip A 2 2. CA travel trip B to get document stamped 1 “arrival” on Thai Truck Carrier Report/Outward Manifest at 1 3 3. CA get passports (driver and truck) stamped, get D53 (TAD) from customs, pay the bills at 3 and hand carry all documents back to 2 via trip B 4. Truck proceed to 4 to get customs inspections signed on D53 and conveyance released to bonded 4 warehouse 5. Total time used is from 30 mins to 2 hours per TRUCK!!! 4. Connectivity from ports to hinterland – The ideal! Proposed Process 1. Dedicated Truck lane and single checkpoint at 1 2. Use Advance Document Information (ADI) to prepare/print all necessary documents before truck arrival 3. Border operator update ”arrival” checkpoint in ADI. Customs collect fees against Trip Receipt and sign off TAD Document. 4. Conveyance Released and Border operator update “conveyance released” checkpoint 1 5. Time used: 5 minutes 5. Challenges to Transport Facilitation and Solution Challenges: 1. To find an optimal balance between transport facilitation and controlling/regulatory measures! 2. To narrow new SMART scope: We had been trying hard to get consent on standard practice but there seems to be no global norms set by an international intergovernmental body that is recognized by countries globally. Question: Do we NEED global recognition? Or travel across more than 3 countries in our region by truck ? Can we just work out something that cater to our needs? 3. To Set the Operational Standard that Works: Since there is no ideal model for Laos (for its different set up and stage of development), it should take the lead to set the standard of the Lao Model based on its experience and success story on the ground as the most linked country by land (bilateral agreement and trans-loading seems to work well?). 4. To allow flexibility in the process (e.g. dual plates) and make compromise on fees to accommodate sustainability? 5. To get support to accelerate the process and fund the Transport Facilitation the same way it funds the Trade Facilitation? (We have 3 years left to realize the strategy) 5. Challenges to Transport Facilitation and Solution Possible Solution: Extract from ADB’s Key lessons for the new CPS for Laos: ➢Infrastructure needs to be developed in a well planned, coordinated, and prioritized way, with attention to the associated transport and non-transport services; ➢Attention is needed on continued development of human resources and their skills; ➢Private sector development should be promoted; and ➢Resource mobilization needs improving, particularly domestic revenues. 5. Challenges to Transport Facilitation and Solution Possible Solution: Extract from Paragraph 63 (Note by the ESCAP Secretariat – Moscow 5-9 December 2016): ➢Standardized and advance information exchange ➢Effective guarantee management systems ➢Streamline border crossing processes and/or inspections, no inspections at border crossings or ports for transit cargo; ➢Introduction of the concept of trusted transport operators ➢Standardize trans-shipment procedures at gateway ports and dry ports ➢Modern customs procedures 5. Challenges to Transport Facilitation and Solution Possible Solution: Extract from the Statement of the 5th JCM CBTA, on16 December 2016 in Chiang Mai The ‘early harvest’ will be based on the text of the Memorandum of Understanding on the ‘Early Harvest’ Implementation of the CBTA provided in ANNEX 1 of this Joint Committee Statement, noting that it includes simplified procedures, such as simplified, standardized,