An explorative study into the effectiveness of a customs operation and its impact on trade

Abstract

There is a lack of overall efficiency in Sub-Saharan Africa’s logistics systems, with a large contributor to this problem being inefficient customs processes and unnecessary customs delays. Many comparisons have been drawn between the levels of efficiency of different countries and regions, especially in recent trade facilitation research, and some models have been developed to demonstrate how the efficiency of a customs operation can potentially be improved. The development of effective policies, strategies and operational procedures, supported by business intelligence and predictive models, however, depends on an in-depth understanding of the reasons for long delays in the customs process. There are multiple factors impacting the customs and logistics process; in order to progress towards improved solutions it is essential to identify the areas of worst performance, their common denominators and the underlying causes that contribute to low observed performance. This requires exploratory analysis of a large set of data representative of an overall customs operation. This article describes the first attempt to analyse transaction-level data and derive exploratory statistics representative of customs operations as implemented in South Africa. The most important process outcomes from the perspective of both trade and customs are defined, the key input factors are identified, and performance measures are extracted from data exchanged between the customs authority and cargo consignors during the period September 2014 to September 2016. The time duration per category for the completion of the customs process was measured, as well as the effectiveness of the customs authority in screening consignments for inspection. The study indicates that, for the selected dataset, of all shipments delayed by customs, more than 90 per cent were delayed unnecessarily, indicating inefficient risk identification in the South African customs process. This study highlights the need for improved customs processes in the southern African context to ensure more efficient trade