As countries adopt radical measures to bring the coronavirus pandemic under control, international trade and transport systems are under tremendous stress.
Early evidence shows that international trade is collapsing, threatening access to goods and critical supplies.
In response, on April 27, the UN Conference on Trade and Development (UNCTAD) outlined a ten-point action plan to help industries involved in the movement of goods keep free-flowing trade afloat during the COVID-19 crisis and its aftermath
“Trade facilitation is about keeping goods moving, so we must do our utmost to ensure the crisis doesn’t slow the movement of critical supplies,” said Shamika Sirimanne, UNCTAD’s director of technology and logistics. "Facilitating trade and the transport of goods has become more important than ever, to avoid logistical obstacles that lead to shortages of necessary supplies.”
1. Ensure uninterrupted shipping
Around 80% of global trade volume is transported by commercial shipping, which moves the world’s food, energy and raw materials, as well as manufactured goods and components. For carriers to remain operational, flag and port States need to continue to provide all necessary services, from bunkering and supplies to health services for sailors and certification of regulatory compliance. Seafarers are critical personnel, for whom teleworking is not possible. It is particularly important to allow crews to board their ships or be repatriated from any seaport in the world.
2. Maintain ports open
Ports provide essential services to international trade. They need to remain open to ships and intermodal connections. Staggered working hours and non-stop operations, if not already practiced, can help spread workloads and physical contacts. Certain restrictions – for example, on weekend operations – may need to be lifted during the current emergency. Governments need to ensure that health measures are implemented in ways that minimize interference with international traffic and trade.
3. Protect international trade of critical goods and speed up.
The World Customs Organization has recently provided a list of Harmonized System codes for critical medical equipment that helps Governments and customs agencies to allow for fast-track clearance of these goods. Government and airport and border agencies need to ensure express clearance and release of these goods. UNCTAD is compiling country case studies on good practices and lessons learned.
Several specific trade facilitation measures. can be particularly useful to speed up clearance and release of critical goods at ports and border crossings. These include special and accelerated provisions for expedited shipments, relief and medical consignments, and perishable goods. Schemes such as the authorized economic operator and pre-arrival processing key tools for ensuring a secure, transparent and predictable trading environment should be fully used where already in place or implemented as a matter of urgency.
Sanitary and health restrictions should not become a disguised barrier to trade in goods or services. Some measures, as identified in guidelines prepared by the Automated System for Customs Data (ASYCUDA) of UNCTAD, such as the separation of release from clearance and the acceptance of digital copies, can be effective tools for faster clearance, but will require particularly careful monitoring when it comes to potentially contaminated cargo.
4. Facilitate cross-border transport
Lorries, trains, airplanes and relevant transport workers need to be able to cross borders in order to keep supply chains functioning. Limits on transport operation during weekends may need to be suspended. Airfreight is particularly critical for certain goods and urgent deliveries. Available geo-tracking solutions for critical goods could help customs and other border agencies to speed up clearance through pre-arrival processing. Governments and industry should liaise closely to facilitate the availability of strategic supplies throughout supply chains, and industry should be encouraged to provide transport and storage facilities where critically needed.
5. Ensure the right of transit
All countries, including landlocked and transit countries, need to maintain their access to seaports. National Governments, in particular transit countries, and regional organizations should support transit, transport and trade corridors and maintain customs transit regimes and other transit-related facilitation procedures, such as use of special procedures and lanes for transit traffic. Recent experiences suggest that transit is indeed. impeded by increasing health controls, slowing down the flows of goods to landlocked countries.
UNCTAD supports cooperation among transit countries and landlocked developing countries, inter alia, through the Empowerment Programme for National Transit Coordinators and the Transport Corridor.12 Ongoing UNCTAD collaboration in the East African Community and other regions show that regional agreements and the mutual recognition of certificates and other documents, for goods and for lorry drivers, can further facilitate transit. There is an important role for regional economic communities to play in this regard.
6. Safeguard transparency and up-to-date information
In times of a rapidly changing trading environment, it is particularly important for Governments to communicate clearly and ensure information is available to all actors and stakeholders and to keep online trade information and help desks updated and operational continuously. Trade information systems should provide remote access to all forms and requirements and ensure that anyone interacting with a Government can find what is required of them online, without having to go to seek information physically. International efforts such as the Observatory on Border Crossings Status due to COVID-1914 can also be very helpful. Governments should support industry associations in their efforts to share information and offer assistance throughout their global networks.
7. Go paperless
As physical contact between people needs to be minimized, electronic submissions and paperless transactions become ever more important. Although goods still need to be moved physically, clearance operations and the exchange of information should make use of existing electronic data interchange as much as possible. Electronic alternatives to traditional, paper-based negotiable bills of lading should be used by contracting parties where possible.
Non-negotiable transport documents should be used where independent documentary security is not needed or the sale of goods in transit is not envisaged. Processes need to be dematerialized, including through automation, electronic payments and the acceptance of digital copies. Contactless terminals, contactless delivery and automated transport minimize the risk of COVID-19 transmission through contaminated surfaces and protect the health of all workers involved. At the same time, efforts to combat cybercrime and address cyberthreats need to be scaled up as a matter of urgency.
Allowing traders to electronically submit applications for permits and licenses, and obtain the corresponding certificates from border regulating agencies, is an easy and quick way to eliminate physical interactions and dematerialize the process. Ensuring that destination and importing countries accept digital copies of certificates that can be further secured through easy-to-install Quick Response (QR) codes can also be an effective trade facilitation measure.
8. Address early on legal implications for commercial parties
The unprecedented disruptions associated with the pandemic and its massive socioeconomic consequences are giving rise to a plethora of legal issues affecting traders across the globe (for example, delays and performance failure, liability for breach of contract, frustration and force majeure). The effects of such issues may lead to business losses and bankruptcies, and overwhelm courts and legal systems. Industry and traders need to be encouraged to waive some of their legal rights and agree on moratoriums for payments, performance and the like, where appropriate.
The International Maritime Organization’s list of recommendations on the facilitation of maritime trade during the COVID-19 pandemic, proposed by a broad cross-section of the global industry, is an example of the type of collaborative action that is needed.
9. Protect shippers and transport service providers alike
Economic emergency and social protection measures need to include the international logistics industry among its priority beneficiaries. Transport and logistics service providers may need financial support to enable them to stay in business and ensure supply chain resilience throughout the pandemic and post-pandemic period.
At the same time, Governments should ensure that carriers do not impose undue fees and charges, such as demurrage on charterers and shippers for delays in loading/discharge operations or returning equipment/containers that are not within their control. Blank sailings, abandoning contracted rates and other measures taken by transport service providers need to be minimized in order to protect critical services provided by shippers and ensure that supply chains remain open, especially for the benefit of the most vulnerable countries
10. Prioritize technical assistance
Many of these measures require investment in human, institutional and technological capacities and should thus be given priority immediate technical support by development partners. Even before the current pandemic took hold, many developing countries were already confronted with challenges to undertake the necessary investments in transport infrastructure and services and trade facilitation reforms.
Implementing electronic trade facilitation solutions is easier for countries that already have electronic single windows, modern customs clearance systems and digital trade solutions in place, such as that provided by ASYCUDA in over 100 countries and territories. The international community is called upon to provide technical assistance in support of trade logistics solutions as a matter of urgency. In view of the practical obstacles to travel, online and distance-learning tools need to be used to a maximum, combined with support to developing countries in the area of the persistent digital divide and digital connectivity.
UNCTAD is providing extensive support to its member States in their efforts to address the unprecedented global challenges resulting from the COVID-19 pandemic. Support includes tailormade advisory services, as well as research and capacity-building programs in international transport services and legislation, port management, trade and transit facilitation, and customs automation.