Safe logistical chains within reach
Within the enforcement vision of Dutch Customs, the so called yellow flow of goods is regarded as the highest feasible: fully reliable logistical chains thanks to complete and correct digital data.* In the run-up to these ideal safe and secure trade lanes, various pilots are under way under the banner of the European CORE project. One of them is an air cargo pilot under the management of Royal FloraHolland, a cooperative auctioneer that buys flowers from Africa. Martijn van Kruining, CORE project secretary on behalf of Customs NL, recently flew to Kenya in order to map out the chain locally, from nursery to container ship or aircraft.
Accompanied by a colleague from Customs and representatives from the business sector and the Netherlands Food and Consumer Product Safety Authority (NVWA) Van Kruining visited a rose nursery, among other things. At least 60% of all nurseries in Kenya are affiliated with Royal FloraHolland. Van Kruining: “The cooperative established the contacts and set up the programme. It was a real fact-finding mission into the route followed by flowers in the country of origin and into the role the authorities play in that. Although the extent of digitalisation within the Kenyan authorities is fairly high, some of the formalities are still processed on paper. Also, in countries like that you will often come across some level of corruption. Together with the local NVWA and Kenyan Customs, we try to curb it by reducing the number of human interventions in the logistics process. Also, at times, administrative costs are charged, which may be legal, but their purpose and added value are not transparent. All in all, it takes five to eight days for the roses to arrive at the end user – this can be done much quicker and more efficiently. However, it’s not up to us to take action in that respect. We only have an advisory role within this project.”
From producer to haulier
It is often the first part of the chain that Customs have little insight into. “We're roughly aware of the contents of a container that enters the EU via the Netherlands, but we don’t know all those responsible for it”, says Van Kruining. “Our mandatory declarations often say ‘from logistical service provider to logistical service provider’. That still doesn’t tell you who the original sender or buyer is. For the import of flowers from Kenya, we’ve been able to map out the various players involved in the process from nursery to aircraft or container ship, and their share in that process.”
Sharing is knowledge
Via their own business dashboard, Royal FloraHolland and other players in the chain exchange data with each other during the project. This is gradually turning into a data pipeline, which Customs can use as well. It gives them access to useful additional information, such as phytosanitary certificates, certificates of origin and packing lists with specific source data. Some of that information used to be available before too, but Customs had to trace it themselves.
“For reasons of competition, businesses do of course not share every little detail”, says Van Kruining. “Businesses that are right in front of or behind one another in the chain will have to coordinate quantities and weights, for instance, but when it comes to product prices, they keep their cards close to their chest. We do see this protected information on the customs dashboard, a separate interface in addition to our declaration systems. This enables us to conclude that nursery X took care of the shipment and that flower shop Y is the recipient – or Royal FloraHolland itself, before a shipment is sent to auction.”
Safety comes first
“That extra information is very important for our risk analysis”, Van Kruining continues. “At Schiphol, pre-arrival selectors help us out by matching up the relevant declarations from Royal FloraHolland that have been earmarked as CORE shipment. They currently use the customs dashboard to find out if the additional information is of any added value and if it leads to a more efficient selection. And also if it is possible for us to find out quicker if a shipment is safe and reliable, because ultimately, that’s what we're concerned about. We want those Kenyan flowers to be of high quality and we don’t want them to carry any undesirable diseases or insects.”
Also by land and sea
In addition to the Royal FloraHolland project, which focuses on air cargo, there are also two CORE pilots in the Netherlands in the maritime environment. The first one – under the management of Seacon Logistics – focuses on IT products from Malaysia, which arrive by container in the port of Rotterdam and are then transported to Venlo. The second – under the management of Maersk – focuses on fruit and vegetables in a chain that runs from Africa to the United States via Rotterdam.
“It’s good to see that all participating businesses recognise the importance of such a data pipeline and invest in it, and not because we ask them to”, says Van Kruining. “Seacon for instance, designed its own IT system in order to be able to share additional information and it ensured it is in line with the customs dashboard. Maersk is working on a shipping information pipeline which will be linked to our dashboard. Royal FloraHolland is working on a similar initiative with its FreshTrade system. Still, not every link in the chain is eager to join, due to the aforementioned competition-related reasons. It is up to the businesses to convince each other that this method will ultimately result in a much more efficient and effective logistics chain – business to business. And when a global player like Maersk is involved, others have to join in if they don’t want to fall behind.”
“Although these are purely exploratory processes, we've agreed that we’ll have to come up with tangible results by the middle of next year”, says Van Kruining. “We hope to have answers to questions such as: do the pilots support our cutting-edge vision, and did they yield one or more trusted trade lanes that demonstrably work? After all, we don’t have a completely developed chain in the yellow flow yet. That’s why CORE is such an interesting programme. It enables us to study how we can optimise the integrity of goods and data, what a safe and reliable flow of goods looks like and how to organise the supervision thereof.”
* Dutch Customs distinguishes blue, green and yellow flows of goods, each requiring their own level of Customs supervision. Businesses in the blue flow are subject to the strictest supervision regime, those in the yellow one to the most lenient regime.
A faster, more reliable and more efficient trade and logistics, combined with an even more adequate supervision of goods chains – that is the objective of CORE (Consistently Optimised Resilient Secure Global Supply Chains), which started in 2014. The programme encompasses dozens of initiatives, under which customs administrations and other enforcement organisations make maximum use of the in-house information from businesses. Dutch Customs is involved in three of those pilots. About 75 public and private partners take part in CORE, including Royal FloraHolland, Maersk, Seacon Logistics, NVWA, Interpol, the Netherlands Organization for Applied Scientific Research and the universities of technology in Delft and Eindhoven.