Latin Aimerica and the Caribbean TeChTnical Department Re(10W0t'l Studies Program11 Report No. 25 MICROFICHE COPY Report No.: 11280 Type: (MIS) Title: TRADE FACILITATION AND TRANSPO Author: DICK, MALISE Ext.: 0 Room: Dept.: TAP T-NICAL DEPT REGIONAL STUDIES Trade Facilitation and Transport Reform by Malise Dick Infrastructure and Energy Division September 1992 Paper in as aeries are not formal pubHeaions of the World Bak 'Roy present preinins and unpolshedl sesubs of counthy analysis or research a Is autmto eourg discussion and comment; any citation and toes of tispaer sbould take accont of its prwvislonal chaMactor. lIt fin g iner las, anW c o epressed in tls paper are entirely those of the author(s) a should a be atributed in any mean to teS Would Beak, its afiliated l s, mabs of its Board of ecutive Diectors or t countries ey represent ABBREVIATIONS AND ACRONYMS CEPAL (UN)Economic Commission for Latin America and the Caribbean CIF Cost, Insurance and Freight CIP Carriage and Insurance Paid to.. DCP Carriage Paid to.. DTI Direct Trader Input (of Customs data) ECE (UN)Economic Commission for Europe EDI Electronic Data Interchange ESAL Export Sector Adjustment Loan (Mexico) FCL Full Container Load FOB Free on Board FRC Free Carrier at.. GDP Gross Domestic Product ICC International Chamber of Commerce 1CD Inland Clearance Depot IFS Intemational Financial Statistics IFTMER hnterational Forwarding and Transport Message Framework IMT Mexican Institute of Transport INCOTERMS ICC Carriage Terms "just-in-time' the concept of minimizing inventories by arranging precise delivery schedules uKTNet" South Korea EDI network LCL Less-than-container load MTC Multimodal Transport Convention MTO Multimodal Transport Operator uMultimodal" Empresa de Transportes Multimodal (Mexico) NIC Newly Industrialized Country NVO-MTO Non-Vessel Owning Multimodal Transport Operator teu twenty foot equivalent unit TMM Transportes Maritimos Mexicanos oTradelinkV Hong Kong EDI network "Tradenet Singapore EDI network UN/EDIFACT (UN)Electronic Data Interchange for Administration, Commerce and Transport UN United Nations UNCTAD UN Commission for Trade and Development UNTDED UN Trade Data Elements Directory USAID United States Agency for International Development 'Value Added Networks" Organizations translating between EDI networks VO-MTO Vessel Owning Multimodal Transport Operator TRADE FACHJTATION AND TRANSPORT REFORM By Malise Dick Infrastucture and Energy Division ACKNOWLEDGEMENTS ls utady as widnaken by Malse Dck, Senor Dansport Economlit and Raiwys Adviser, L EAIE. Feldwork as executed by Nancy Jesurun-anenm (Consultant) on Costa Rica, ike Ituto Mwcano dd Transpoute in Mexco, and die Economic Canu;frnsionför Lain Ameria and the Caribbean In Argenina and ~ulie, whose assistanc ws nud appre . Mr. David Hughar reve~d an earller krt of dis docmnent and provided hekfu commens and suggesdons. ie report w prepara by Snia C Molna, LIE. ABSTRACT This report reviews the institutional obstacles to the efficient use of containers in the international trade of four Latin American countries. It looks particularly at four areas of potential concern a) Treatment of consignments which are insufficient to fill a container (commonly called Less-than-container load or LCL) b) documentary processes in general c) customs procedures in particular and d) the development of Multimodal Transport and Electronic Data Intrchange (EDI). The method employed was to issue a questionnaire to selected importers/exporters in Argentina, Chile, Costa Rica and Mexico, undertake follow-up interviews, discuss with providers of transport services and review current literature on developments in the area. The macro-economic setting in the four countries was also considered. After brief chapters introducing he study, and outlining its objectives, the report focusses on two key chapters. The first reviews the responses to the questionnaire which asked for shippers views on the quality of service provided by the various agents in the transport chain, and places these in a macro and micro-economic context. The second investigates in detail developments in three areas which are believed to be of critical importance; the terms of carriage of foreign trade, the necessary conditions for the development of efficient multimodal transport, and the benefits (and costs) in the development of electronic data interchange. The report concludes with responses on the four areas of particular concern, draws conclusions and makes recommendations. Annexes include a bibliography, detailed responses to the questionnaire and extracts from documents with particular relevance to the report themes. About 60 pages including annexes and bibliography. CONTENTS ExecutiveSumary . ................................ iv Chapter I Introduction ................................ 1 Chapter I Study Objectives ............................. .2 Chapter III Methodology ................................ 4 Chapter IV Questionnaire Results and Macro/Microeconomic Framework . . 6 Questionnaire Results ...................... 6 Macroeconomic Overview .................... 7 Microeconomic Review ..................... 8 Chapter V Terms of Carriage, Multimodal Transport and Electronic Data lnterchange (EDI) ................. 14 Cost, Insurance, Freight (CIF) and Free on Board (FOB) 14 Multimodal Transport .............. * . . ... 15 Electronic Data Interchange (EDI) ............. 18 Chapter VI Results .................................. 20 Less-Than-Container Load (LCL) Movements ...... 20 Documentation and Procedures . . . . . . . . . . . . . . . . 21 Customs Organization and Procedures ........... 21 Multimodal Transport ..................... 23 Chapter VII Conclusions and Recommendations. . . . . . . . . . . . . . . . . 25 Contents fl ANNEXES I Questionnaire .......................... .. 30 2 Satisfaction with Agencies - Sumnary Results .......... 35 3 Detailed Res-dts of Questionnaire and Interviews ........ 37 4 Costa Rica: Customs Reform; USAID Analysis and Recommendations . . . . . . . . . . . . . ............ 46 5 Customs Process as a Restraint to Trade .... .......... .48 6 Mexico: Truck Tariffs 1991/Truck Transport Cost Calculation 1986187and 1991 ............................ 52 7 Agents Participation in the Distribution Chain 1987/88 . . ... 54 8 UNCTAD/ICC Draft Rules for Multimodal Transport Document§5 9 UN/EDFACr Messages ........ .. .............. 60 10 Major Documents Prepared to Support Export/Import of Cargo 61 IV Erecuive Swmnary EXECUTIVE SUMMARY Introduction, Objectives and Methodology i. During the last quarter century, the nature of non-bulk seaborne trade has changed dramatically, with the substantial substitution of movement in containers (basically, steel boxes 20 to 40 feet long) for traditional movements in pallets or bags. Containerization in Latin America lagged behind, probably partly due to the comparatively closed nature of the economies. In the last five years or so, however, the physical development of container facilities, and the volume of container traffic, has increased substantially, more than doubling in some countries. However, there were indications that the institutional developments necessary to take full advantage of the possibilities of the container have been slower to materialize. ii. Accordingly, the objective of this investigation was to review the institutional constraints on containerization in four countries (Argentina, Chile, Costa Rica and Mexico) which it was hoped would give a picture reasonably representative of the region. The study was to focus primarily on: a) less-than- container-load (LCL) movements, particularly relevant to small shippers; b) transportation and associated documentation. The underlying issue was whether cumbersome documentation and procedures were a significant problem; c) customs and customs associated requirements and procedures. Customs are clearly a central element in international transport movements; and d) the development of multimodal transport, with its ramifications such as Electronic Data Interchange (EDI). Multimodal transport is principally distinguished from unimWodal by having one agent (the principal) responsible for all movements in the transport chain. iii. The importance of the topic is demonstrated by the various estimates of the benefits of improvements in the institutional framework. Review of Mexican customs procedures some three years ago indicated that the proposed reform program, which has since largely been implemented, would generate benefits of more than US$2 billion annually. Similarly, some years ago the Economic Commission for Europe estimated that the substitution, where possible, of Electronic Data Interchange (EDI) for paper documentation could save up to 8% of the value of intra-EBC trade. iv. The methodology chosen was to determine upon a list of typically containable commodities, identify a sample of companies handling them, issue a questionnaire soliafmg information on their operations and views on the workings of the transport iain, review comparative literature, and undertake more &Ecwye SwnMWY 1 intensive work on the key problem areas. The last activity was not accomplished due to resource limitation. Conclusios and Recommendations v. The conclusions of this report can be considered under four headings, the macro/microeconomic linkages, the formal impediments to efficient operation of the transport chains, the dynamic of recent developments in the countries surveyed and, finally, the emaining weaknesses. vi. At the time when fieldwork was undertaken, (early 1991) there were significant differences in the macroeconomic situations in the four countries. Chile was enjoying steady and satisfactory economic growth, Mexico had emerged from several years of stagnation, and Argentina was in recession. The Costa Rican economy was growing, but only marginally above the population growth rate. The perception of users regarding the efficiency with which the transport chain was operating largely reflected the macroeconomic situations, and the objective evidence, such as it was, tended to be in line with user perceptions. Chilean Institutions were generally functioning satisfactorily, Mexican were improving though not uniformly, while the Argentinean situation was generally unsatisfaetory. Only Costa Rica, where transport and trade institutions were not seen as working well, despite economic growth, was inconsistent with this pattern. It is exceedingly difficult to assess which was the driving force, but it does seen clear, and almost tautological, that countries, in which foreign trade Is significant, cannot expe&- to achieve satisfactory economic growth without a generally satisfactory trade/transport chain. vil. Legil regimes were probably less of a problem than the manner in which the laws are interpreted, and the tendency towards inertia and acceptance of conditions which would be considered unsatisfactory elsewhere. For example, there are no legal impediments to establishment of inland facilities for consolidation of Less-than-container-load (LCL) cnsignments, but in fact these are rare, and small exporters (and importers) fice considerable uncertainty in their international trade movements. In some countries, facilitation centers were established to address this problem, but in fact tended to restrict entry, thus defeating the objective. Similarly, there is a tendency for the terms of carriage normaly employed to encourage the international element of external trade movements to be left to foreigners, with the local freight forwarders (whose legal status is, admittedly, inappropriate to modern conditions as he acts only as an agent for a consignor, thus not taking responsibility) handling only national movements. vI &ecuWve &UMMay viii. The situation is, however, changing quite rapidly, and (eg) conditions In Argentina are reportedly perceptibly improving. The Mexican experience gives a good Indication of what can be achieved and can be summarized as follows: a) the trucking industry, previously subject to numerous directives from government, was substantially deregulated in mid-1989. By 1991, significant improvements had taken place; rates had been reduced, particularly in highly trafficed corridors, and investment in new vehicles, which had been minimal for nearly a decade, had started to recover. b) customs, which had previously been notorious for slowness and cost, had been substantially reformed. In particular, the liability assessment function had been separated from revenue collection and a system of 10% random survey had replaced theprevious discretionary system, with its frequent inspections. Additionally, the customs agent profession, previously a 'closed shop", had been opened up and the number of agents accordingly increased. These measures had increased both the speed of service and the satisfaction of the customers, significantly. ix. There are still significant weaknesses in the trade/transport chain. First, practice does not always follow theory closely. In Mexico, for example, the 10% customs inspection rule often translates into a whole consignment of containers being held up for several days, because all are oa the same bill of lading'. This obviously was not the intention, and Mexican customs will hopefully be addressing the problem. Another example is that movement of containers inland may be legal, but the paperwork too complex for the consignee/consignor to take advantage of this conceptual advantage. x. Secondly, best practice would suggest that containers spend as little time in part as possible. There are three main reasons: a) the risk of damage or theft is generally accepted as being higher in ports than in ICDs or outside warehouses; b) the technical characteristics of container ports are increasingly deteratined by shipping lines that demand that their very expensive ships are turned round rapidly. The advantage to the customer of such speed is lost if the container then sits in the part awaiting processing or collection. This clogging of ports also tends to encourage proposals for new port investment, even when better landside operations could avoid them; and c) modern industrial practices increasingly call for mJust-in-time" supply of components. The emphasis is usually more on predictability than absolute speed of delivery, and such predictability is inconsistent with port delays. Unfortunately, practices such as EecWve Swmnary VII allowing excessive free storage of containers in ports, and imprecise distribution of responsibility for port operations, can, and do, inhibit efficient use of both facilities and equinment. Furthermore, the various links In the transport chain are usually under different managements, and their coordination is often less than ideal. xi. Increasingly tied into all of the above are documentation and communications. Developed countries, including the so-called Newly Industrialized Countries (NICs) of the Pacific Rim, are increasingly employing electronic rather than paper communications and documentation. The subject is complex, and experts in the field point out the dangers of superimposing an electronic system on inappropriate documentary practices. This has led, in many countries including Singapore and Korea, to central government playing a leading role in setting up systems, which may take several years to become operational. In Latin America, only Brazil is a member of UN/EDIFACT, which is becoming theinternational standard, and in none of the four countries was use of EDI well advanced. xi. The recommendations flow almost naturally from the conclusions. If encouragement of international trade is an objective, inefficiencies in the trade/transport chain should be reduced. Some of these relate to information. Small exporters will be encouraged if they have sources of information on how to deal with commercial documents, arrange transport and liability coverage. Also, if freight forwarders had a stronger legal position, their willingness to invest in computational equipment and start assuming the role of multimodal transport operators could be increased. Documentary improvements should be encouraged from two standpoints a) simplification and adaptation to the realities of container rather than breakbulk transport and b) preparation for the substitution of electinic for paper transmission of information. Customs reform, where not underway, should be encouraged, with adaptation of proven good practices preferable to reinvention of the wheel. Again, this goes hand in hand with increased use of computers and shifting the focus from comprehensive to selective inspection, coupled with significant penalties rigorously enforced. The Mexican experience suggests this approach is welcomed by traders. Other Issues xiii. Two issues and recommendations relate directly to the role of government and promulgation of this report. First, should the workings of market forces by themselves be expected to address the deficiencies that still exist in the trade facilitation and transport chain. The answer might well be *yes" if time were not at a premium. Latin American countries are now much less protected from the forces of competition than a decade ago, and their competitors vitU Ec.zdve Swanary are not standing still. If the process of identifying in detail the main problems, which will vary in relative importance and intractability from country to country, is not undertaken quickly, the next generation of advances will have occurred before regional countries have absorbed existing ones. Governments are inevitably involved in trade and tran-port policy and major institutions involved in them, and if the governments of countries like Singapore and South Korea take a leading role in facilitating trade, there are sound reasons for Latin America doing likewise. The Bank, for its part, is well positioned through either transport or trade loans, and associated studies, to assist in this work. 1dv. Finally, this report would not pretend to be comprehensive even at the time it was prepared, and with changes taking place rapidly it would in any case soon become out of date. However, strong interest 7a the subject of trade facilitation and its links with transport was expressed by nearly all parties involved in the report's preparation, and it does at least provide a basis for discussion of the main issues. For this reason,it is for consideration that it should be employed as the basis for a regional or sub-regional conference on the subject. There may be merit in concentrating on the northern part of Latin America, as the Economic Commission for Latin America and the Caribbean (CEPAL) has already organized a conference with a similar, but not identical, theme, attended mainly by southern countries. Costa Rican authcities have expressed an interest in assisting with arrangement of the suggested conference. 1 INTRODUCTION 1.1 During the last quarter two years ago, to yield annual benefits of century, the form in which international more than US$2.0 billion. Substitution of seaborne trade in non-bulk products is electronic transmission of information for moved has changed dramatically, from small paper documentation was estimated, by the units, prearranged on wooden pallets, to Economic Commission for Europe (the steel containers up to some 45ft. in length. "father* of Electronic Data Interchange The container now dominates non-bulk trade (EDI)) to yield cost savings of about 8% of between developing countries, but it is only the value of intra-EEC trade. In terms of in recent years that the "container the international trade of the four countries revolution" has penetrated Latin America. reviewed in this document, this would be the Part of the reason has been inadequacy of equivalent of US$15 billion yearly. physical structures, and the characteristics Obviously, the magnitude of the savings and shortcomings of these have been the would be less in economies where labour subject of studies and seminars dealing with intensive methods are less expensive than in the cast and west coasts of South America, Europe, but they would still be Impressive. the results of which are summarized in * Containerization and Multimodal Transport 1.4 Although the study was in LAC - A Strategy for the approved before issuance of Procedures for Nlineties(Ref.1). LAT's Regional Study Program, the study conforms to the objectives of the program in 1.2 Part of the comparatively providing an insight into a regional sector slow development may, however, be due to development Issue, supplementing institutional rather than physical knowledge on trends and drawiug lessons impediments. The term "institutional! can from experience in selected countries which be subject to a variety of interpretations. may have relevance elsewhere in the region. For the purpose of this study, the simplest definition, impediments which are a function 1.5 This report is presented in seven of processes including the legal and chapters. After a brief Introduction, the administrative framework rather than those study Objectives are noted, and the that need to be addressed primarily through Methodology chosen to meet them, which investment in structures and equipment, was included issuance of a questionnaire, chosen. described. Thereafter, the responses to the questionnaire in the Macro/Micreoasonmc 1.3 Some indication of the amework are reviewed, and a section is importance of the subject can be gauged then devoted to the interrelated topics of from two of the more precie estimates of Multimodal Transport, Terms of Carriage benefits to be gained from improvements in and Electronic Data Interchange. Results the areas covered. In Mexico, the and overall Conclusions and government's program of customs reform are then presented. was estimated, 2 STUDY OBJECTIVES 2.1 The basic objectives of the study of a system whereby containers were to identify, for a representative wouldmove by differt transport selection of Latin American countries,the modes under the responsibility of a importance of institutional, as opposed to single agent. Within that framework, essentially physical, issues in the transport the study would examine the of traded goods, and make recommendations implications of the development of on how these issues could be addressed. Multimodal Transport Izto (MTOs). Because the container can 2.2 There are basically four theoretically be moved from the door elements which were, a priori, identified at of the consignee to that of the study commencement as important. These consignor without its contents being were: disted (the ODMrtodoorX Concept) in Contrast to the segmented a) procedures particularly affecting Less- movements associated with traditional than-container-load (LCL) cargo movements (eg. by truck to nsignments. The relevance is that part, storage in a transit shed, loading containers have large capacity (8' x o ship with reverse procedures at the 8'6* x 20' is the capacity of the other end) there has been a strong Twenty foot equivalent unit (TEU) trend towards the Of which is the standard employed for foeg carriers offering door-to-door measuring containers capacity) and services. The potential issues wer consignments which are insufficient to whether MMs would tend to be fill a container necessitate foreign and monopolistic, and whether consolidation with other indeed fully comprehensive trgh conmentstransport services were available. b) transport documentation. The 2.3 A fifh consideration, whose underlying concern was whether close association with those identified above improvements in documentary has become clear during study procedures had kept pace with the investigations, are the benefits from the physical improvements associated introduction of Electronic Data with containerization.Processingterchange (EDI) in trade docuenttio, the issues encountered in its c) a special, central, focus of development, and the extent of its use in the documentation is customs. The study countries under review. would examine the extent to which customs procedures were an obstacle 2.4 The ultimate objectives of the to trade facilitation; study were to analyze the situations of the four subject countries with respect to the d) the status of development of above, identify the issues arising particularly multimodaltransport,inthefullsense astheymightapply to thercountriesinthe Chapter 2 3 region, recommend actions to address these issues and identify any further, analysis required. 3 METHODOLOGY 3.1 To obtain a r6asonably This modus operandi was envisaged as representative sample of country conditions, having the following step: and to confine attention to trade in products which are likely to be typical of those a) Preparation of a questionnaire to elicit moving in seabore containers (as distinct relevant information. (Annex 1); from bulk products, which normally move in specialized ships, and to highly perishable or b) assembly of a list of potential high value items which normally move by interviewees which would i be air) the study concentrated on four countries reaoably homogeneous between the and products which were of medium value four countries ii) be sufficiently large (up to US$5000 per metric ton) and to obtain a reasonable cross-section of generally containerizable". The four opinion, without becoming countries chosen were a) Mexico: large, and ii) give a spread diverse and undergoing a process of across large and small companies; restructuring; b) Costa Rica: comparatively small, economically quite dynamic but c) issuance of the questionnaire, review without pronounced restructuring; c) Chile: of responses, undertaking of with an impressive record of economic interviews, tabulation and analysis of growth in recent years and d) Argentina, results; which at the time was in economic recession, and in which economic activity d) follow-up investigation of the main was heavily concentrated geographically.issues identified, through review of existing material, discussion with 3.2 It was envisaged that the study expert opinion, and further fieldwork would draw upon a combination of review as appropriate; of existing documentation, and discussion, both within and outside the Bank, and that e) preparation of conclusions and the primary interlocutors would be the for review by the international trade oriented users of LAT Regional Studies review transport services. Initially, Chambers of meeting, and, if then aproved, Commerce were seen as a means of dissemination first within the Bank obtaining wide experience economically, but and latterly at a workshop in which after further consideration it was felt there by regional country would be a tendency to "filter" information representatives and outside and accordingly direct contact with users zations would be invited. was chosen. 3.4 In order to stimulate local 3.3. The work program was devised interest, and to implement the study cost- to obtain representative user opinion of the effectively, it was decided to undertake the transport chain at an early stage, and work more or less simultaeously in all four through follow-up interviews, determine the countries, under the overall supervision of underlying causes of problem identified. the Bank, with the fieldwork being executed Chapter 3 5 as follows a) in Mexico, by the Instituto Exports, they adopted a somewhat, but not Mexicano del Transporte (IMT), b) in Costa significantly, modified version of the Rica, by consultant Ms. Jesuran-Clements questionnaire. (Ref.2) (working from the Bank) and c) in Argentina and Chile, by the Economic 3.5 In addition, the Bank decided to Commission for Latin America and the undertake some complementary discussions Caribbean (CEPAL). As CEPAL agreed to with foreign and domestic freight undertake this assignment in conjunction forwarders, and other organizations such as with work they were independently customs and as appropriate, initiate or attend undertaking on the subject of relevant meetings as the study progressed. Commercialization of Latin American (Re.3) 4 QUESTIONNAIRE RESULTS AND MACRO/MICROECONOMIC FRAMEWORK 4.1 A total of fity seven companies aggregate satisfaction levels are found (A responded to the questionnaire and discussed gives the percentage dissatisfaction using the their responses. The response rate was in number of respondees considering the aggregate approximately 90% and there was agency important or very important as the no discernable pattern to the non-responses. numeraire, B employs as numeraire the total Neither was there systematic variations in number of respondees) the completeness of the responses, which generally were comprehensive. They ranged Argentina Chile Costa Rica Mexico in size from subsidiaries of international chemical companies to small producers of A 55 20 44 36 ceramics. Annex 2 shows the aggregated B 31 13 23 9 results of the responses; Annex 3 gives specific details by company. 4.4 There are no significant variations in the results that can be 4.2 The respondees indicated correlated with company size, except in the whether an agent (e.g. a freight forwarder) use of EDI, noted below. Large companies was unimportant, important or very have more or less the same complaints about important to them. For the last two customs delays or poor rail services as small categories, the respondees were asked ones. However there are some clear whether the agent was satisfactory or not distinctions between countries in the absolute and, if the latter, why. At an aggregate and relative importance of different agencies level, two features stand out. First, the as a source of frustration. In Chile, almost level of satisfaction with the agents in the universal discontent with agricultural transport chain is appreciably higher in inspection procedures was expressed, the Chile than in the other three countries. only other serious complaints being with Secondly, out of the thirteen activities bank inflexibility (by exporters). In separately identified, five accounted for Argentina, customs and port problems, most of the dissatisfaction. These were expressed in terms of bad management and Government Departments/Agencies, high costs and risks, overshadowed all Customs Authorities, Port Authorities, Land others. In Mexico, land transport (the Transport Operators and Banks. railway) and customs agents were the main source of complaint, again on the basis of Satisfaction Levels Summary (%) unreliable service. In Costa Rica, discontent was more broadly based. Slowness and, to Argentina Chile Costa Rica Mexico a lesser extent, costs, of government and 67 87 68 71 customs procedures, land transport and the ports, and risks of cargo damage, were 4.3 For the agencies most closely widely reported. associated with documentations customs and customs agents, port authorities, government 4.5 It is quite clear that the etent to agencies, banks and insurers the following which there have been improvements in Chapter 4 7 documen-ation, and the extent to which this EDIis used to only aliited extent ia area is reasonably satisfactory, varies trading sense, almost exclusively by foreign markedly from one country to another. subsidiaries. (See Chapter 6). Broadly speaking, documentation is satisfactory in Chile, improving in Mexico, 4.7 Although, with the exception of and (at time of investigation) unsatisfactory Chile, the statistical data suggests a in Costa Rica and Argentina. Also, good perceptible level of di with the documentation by itself is not sufficient. If workings of the transport chain, most the procedures are Byzantine, the scope for intervieweei focussed attention on corruption tends to exist and, equally, if the procedures in such as customs officers handling documents are encouraged and banks, which are outside the traditional to be cooperative (for example, by being transportchainandmorewithintheoverall adequately paid and supervised) external trade chain. To present possible comparatively antiquated documentation can elanatory scenarios, it is thus desirable to be made to work. These observations apply start by briefly reviewing the particularly to customs and associated macroeconomic conditions, including the activities. Customs are clearly a key, if not external trade performance, before the key element, in the transport chain from proceedingtomiaoeconomic the trade facilitation perspective. Aaroeconomic Overview 4.6 There was little evidence of multimodal transport as a concept featuring 4.8. The table below shows that prominently in the four countries, where the Chils macroeconomic was impression was gained that foreign trade clearly superio to the other countries during transport was seen as something 'received' the last five years. GDP, GDP per capita4 rather than "conceived'. The prevalence of imports and exports all grew rapidl, while the use of CIF (Cost, Insurance and Freight) the of the other countries arrangements for imports, and FOB (Free on vared from reasonable in Costa Rica to Board) for exports, tends to support this poor in Argentina and Mexico. It may be impression. This is not to suggest that argued that as extena trade was the most terms of carriage or other measures should dynamic element in Chilean growth, this be deliberated designed to reintroduce the derived fom a comparatively smooth cargo reservation systems, formerly tradettransport chain and/or that an efficient prevalent in Latin America, by the 'back chain induced or reinforced trade and door', but merely to note that CIF/FOB economic grWth. We have insufficient data tend to discourage local initiative in entering to address this 'chicken and egg' question. the multimodal transport market. Likewist 8 Chapter 4 GDP and Trade Growth 195- 90 (%) ARGEN _ CH E COSTA N RICA GDP (real) 1 35 25 7 GDP (real/pers.) -5 24 4 -4 Imports (US4) 6 157 85 126 Exports (US4) 47 117 49 24 Inflation (89/90) 217 26 19 27 Source: IFS 4.9 In Argentina, by contrast, economies that were becoming more external trade performance, export oriented, oriented towards trade in was reasonable but GDP growth was poor. could not do so without a Argentina was, In fact, in a recession when reasonably satisfatory trade/transport the interviews were carried out (spring system, and that where (as in Argentina and 1991) Costa Rican performance was quite Costa Rica) the system was not responding, good across the spectrum, while Mexico was the complaints woud be vociferous. emerging from the stagnation of the mid- 1980s. The level of inflation was much Microeconork Review higher in Argentina than elsewhere, although it had been reduced from near- 4.11 in reviewing the mireconomic hyperinflationary levels. On the whole, the features, an essentaly qualitative approach macroeconomic indicators suggest an has to be taen. This is party because we association between macroeconomic growth ae observing dynamic processes, no and satisfactory trade facilitation, but little comparing static situations. Nevertheless, it from which firm operational conclusions can is possible to see some patterns on a country be drawn. bass which seem consistent with the user perceptions exposed in the survey. Thewe 4.10 While it would be presumptuous for a are described below, sm i the main review of this nature to claim to establish of the kmy elements in the macro/micreconomic relationships, it does transport chain. seem clear that the trade/transport chain was working more satisfactorily in countries Argentho where economic performance was perceived to be good or significantly improving. 4.12 Argentina in 1991 was in a indeed, it may almost be tautological that recession, with key trade institutions which CYapter 4 9 had changed little in recent years but, with unpredictability of the exchange rate, was an the substitution of containers for traditional inhibiting factor. general cargo handling methods and continuing trade growth, were under Chile increasing pressure. The port of Buenos Aires, which handles over 90% of 4.14 The contrast between Argentina Argentinean general/container cargo, was and Chile is marked. The Chilean port never built nor organized for containers, but system was reorganized/rationalized under nevertheless the number of TEU nearly the Pinochet regime, with apparently doubled from 1985 to 1990, to over spectacular results in terms of port 200,000. (Ref.4) This traffic had to be productivity.(Ref. 5) There is also an accommodated on three berths, and, using element of competition for the main port of the "rule of thumb" that a container berth Valparaiso from the much smaller port of approaches capacity at 50,000 TEU per San Antonio, although the initiative seems to year, it is obvious that even though the three lie with the shipping lines, which can, and private cargo-handling (stevedoring) have, moved to the other port when service companies are considered efficient, there was unsatisfactory. (Ref.6) Also, the cargo was (and is) considerable congestion in the reservation systp.m was effectively port. Furthermore, lack of finance has abandoned in 1979, again with beneficial obliged the port authorities to defer dredging results.(Ref.7) and maintenance of navigation aids, both of which restrict port operational efficiency. 4.15 Customs procedures are less Additionally, Argentina still operated a restrictive than in Buenos Aires, with cargo reservation system, the elimination of random sample inspection at the ports. which produced clear benefits in Chile (see However, there has been no establishment of below). Finally, Argentine customs are still inland clearance depots (ICDs) outside a operated on the basis that import containers facility located in Valparaiso, even though must be unloaded (unstuffed) within the the advantages of consolidation/ port, even though the legal requirements deconsolidation of cargo in Santiago, which allow movement under seal to the is the industrial and commercial centre and consignees premises.(Ref.1 c) Thus the risk pre-clearance of aports before entry to the of damagelpilferage is high, especially for port, in terms of reduced delays within the LCL. port, are obvious. Vested interests in Valparaiso are reportedly blocking such 4.13 It is less obvious what banking moves. It also appears that despite a long problems would be. Argentina is an period of export growth, commercial banks exporting nation with large companies services in providing letters of credit, etc., experienced in international trade and, are in some cases unsatisfactory (Ref.6). presumably, an appropriate banking system. Chile has had a much lower and more stable It is, however, probable that the inflation level of inflation and exchange rate than rate which was still high, though less than in Argentina, which makes this weakness the recent past, and the associated surprising (Ref.7). 10 Chapter 4 Costa Rica the USAID assessment of problems found, the initial program of assistance, and the 4.16 Costa Rica achieved the dubious work still to be done. Apparently one distinction of having the highest across-the- problem has been that Costa Rican customs board dissatisfaction level. The underlying decided some years ago to introduce new reason seems to be that all elements of the systems without reference to developments transport chain, except shipping, where elsewhere, these have been found there is more competition than in either unworkable and Costa Rica has had to start Argentina or Mexico, are subject to all over again. inefficiencies (Ref.8). The railway system is physically re -adown and administratively Mexico weak, and the trucking system, while unregulated, is generally considered to be 4.18 While Chile has for some time less modern than , say, that operating experienced a flexible and generally efficient between Mexico and the US border. The transport chain, and Argentina, and to a port system also has physical and lesser extent, Costa Rica have still to administrative problems. All were further reform, Mexico is in a transition phase. It affected by the recent earthquake. Physical thus probably has more lessons for other problems, in particular lack of appropriate LAC countries than the other subject storage for exports, exist at San Jose countries. The main features of recent airport. Air transport is used for a Mexican experience are reviewed below. significant proportion of Costa Rican fruit and vegetable exports. 4.19 Before and during the de la Madrid presidency, Mexico was a society 4.17 Costa Rican traders seem to in which regulation was pervasive in the experience more problems with government transport sector, and the customs system than the banking system, in contrast to the was very much geared to restriction of entry other countries surveyed. An explanation is of imports of goods subject to quotas, and, the reported tendency for the government to in theory, accurate recording of imports address problems by establishing committees subject to high import duties. In other which deliberate and recommend, but have words, its main objective was not trade little success in producing action. This facilitation. The Salinas presidency altered assertion was obviously rather difficult to the focus across the board. Customs were substantiate within this survey. What is reformed, road transport was almost clearer, however, is that customs completely deregulated, and even Mexican procedures, and facilities, are neither Railways were accorded greater freedom in modern nor adequate. There is no provision such key areas as negotiation with users. as yet for direct movement of containers Obviously this did not happen all at once, under seal to ICDs nor consignee premises, but by early 1991, when interviews were and customs procedures for the release of conducted with Mexican international cargo from customs warehouses are slow transport users, significant changes had and unpredictable(Ref.9). USAID has, taken place. These are briefly described however, started a 1991 - 93 program of below, together with preliminary assistance to customs. Annex 4 summarizes assessments of the consequences. Chaper 4 11 4.20 As noted above, Mexican In a study (Ref.10) which found, not customs services have been substantially surprisingly, ta these retrictive practices reformed. The deficiencies in the previous had tended to reduce efficiency and raise system, from a fiscal point of view (the transport costs. Mexican Railways, which trade facilitation perspective Is somewhat had been subject to a somewhat different set different) the measures proposed and taken, of regulations (including tariff control) was are best described in the customs annex to not deregulated, and even a reasonable the Export Sector Adjustment Loan (ESAL) degee of relaxation of tariff control had to (Annex 5). Two important features were a wait nearly two years(ltd.11). wther to separation of trade tax from tax assessment compensate, or for less calculating reass, functions, thus reducing temptation to Mexican Railways have been less inhibited underrecord, and introduction of random from establishing lCDs than trucaers.(See rather than universal inspection. These were Box 1). Finally, the Mexican ports system, linked with liberalization of entry to the which had previously been rather closely customs agency profession, and the controlled by a poorly coordinated set of introduction of stiff penalties for government agencies, was changed to one in infringement of customs regulations. which local ports were given more Effectively, importers (and to a lesser autonomy, but in which major investment extent, exporters) were put on trust to decisions were made by a single centralized record accurately. At that time the new agency O'uertos Mexicas). system had been introduced only at the three most important entry points (two on the US 4.22 Attributing results to actions in border, and Mexico City airport) with these conditions is particularly subject to the significant improvements in processing hazard that the number of possible speed and revenue collection. The system determinants is much greater than can be has now been extended to all major entry analyzed in a study of this nature. points. Unfortunately, overzealous Nevertheless, there are ftctual changes interpretation of the rules at the ports has within the transport chain which ae resulted in processing delays continuing, directiolly consistent with trade faclitation. First, the qetoniereveled 4.21 There were five key elements to that substantial variation now exists in Mexican land transport deregulation. trucking rates (there are no longer tariffs). Previously, trucking for hire was restricted Annex 6 gives examples. Although te in tariff setting and route selection and were certainly breaches of official tariffs obliged to use the services of cargo centres prior to deegulation, it is very doubtul if to consolidate cargo. Furthermore, control variations of the present magnitude ever of multimodal transport was assigned to a existed. It is possible such variations are state monopoly (Empresa de Transportes competitively determined, but it is also Multimodal S.A. - Multimodal'). The possible that such competition is very results were reviewed some four years ago imperfect in some areas. Secondly, 12 Chapter 4 BOX 1: INLAND CLEARANCE DEPOTS The underlying principle of the establishment of Inland Clearance Depots (ICDs) Is a simple one. Sea (and land) borne containers or other intermodal transport units such as wheeled trailers, should operate on the basis of movement directly from consignor to consignee without unloading and reloading of contents. Thus the risk of damage and loss In minimized. Unfortunately, there are two common obstacles to this optimal situation. One Is that customs are often reluctant to allow containers to exit from the port (or land frontier) customs area, and prefer to Inspect the contents In these areas. This is something that applies to cargo consignments regardless of volumes, and Is being addressed, In theory at least, by the adoption of sample random, or stratified random, Inspection, normally based upon a 10% inspection rate. The second problem applies to small consignments. Often these are insufficient to fill a container and thus have to be consolidated/ deconsolidated with simlar consignments, under the control of freight forwarders or simlar agents. If the total volume Is sufficiently high and balanced directionally the freight forwarder may find It worthwhile to arrange with customs for customs inspection at the freight forwarder's premises, which, In a country like Mexico, are probably a substantial distance from the frontier. However, If the volume is Insufficient, the solution may be a pooling arrangement whereby less-than-container load (LCL) cnsignments (and full container load (FCL) cnignments where the consignor/ee prefers to leave transport arrangements to a freight forwarder) may be consolidated/deconsolidated at an Inland terminal with customs clearance fadlities. This is the ICD concept. It might be added that legal restrictions on internal movements of containers generally result from the documentary definition of destination (which relates to the Terms of Carriage discussed in Box 2) something which does not require substantial legislation to correct. In Mexico, the only fully ftnctioning ICD Is that operated jointly by Mexican Railways and private truckers, at the main Mexico City rai wagon marshalling yard at Pantaco. In 1990 over 30,000 TEU (Twenty foot equivalent units) or 18% of total Mexican container traffic moved through this terminal, the remainder either moving directly toffrom customers' premises (probably less than half the remainder) or being consolidated/deconsolidated in the ports. As studies (noted In Ref. 10) have Indicated that insurance claims on cntainAzed cargo are only about 10% of on unconsoldated, the advantages in minimizing unconsoldated movement are clear. Chapter 4 13 investment in trucking has recommenced ls flexible than the trucking industry, has after many years of stagnation (Rd.12). lost traffic to truck. more promisingly, it Thirdly, cargo centres appear to have has started to establi meaningful reverted to a much reduced function of contractual relations with clents and develop assisting small truckers to obtain cargo new traffics (such as *double-stac consolidation and. contractual assistance, container trains). Mexican port contaie which was the original intention. Fourthly, traffic has expanded significanty, but Mexican freight forwarders were become more concentated on four main increasingly employing ICDs and thus ports. The demuse of Multimodal seem in avoiding the need to unload LCL cargo at fact to have stimulated mqjor Mexican ports or frontier posts. (This progress, shipping line CIWIM) to develop a reportedly, has been reversed as customs multimodal system and be in the forefront of have applied stricter inspection at these EDI development in MexicoWd.13) though entry points, for reasons which are not its dominance in several impOrtant Mexican clear, as the same limitations have not been ports is perhaps a cause for concern on applied to rail movements) Fifthly, Mexican MOnOy groUnds. Railways which, admittedly, is structurally 5 TERMS OF CARRIAGE, MULTIMODAL TRANSPORT AND ELECTRONIC DATA INTERCLANGE (EDI) 5.1 These three aspects are interrelated, link choice is a subject which goes beyond and the interrelationships complex. What the scope of this study. Howev, there are follows is based upon a summary of an a number of specific observations below, UNCTAD analysis(Ref.14) and other that are appropriate. documents. 5.4 Until fairly recently,, Latin America 5.2 There are two pointers to a lack has generally operated within narrow of national involvement in multimodal institutional confines. In shipping, cargo transport and EDI within the four countries. reservation systems which effectively One is the fact that very few respondees to allocated a fixed proportion of cargo to the questionnaire employed multimodal national shipping lines, within Liner transport, or EDI. The second is the Conference systems, were common. prevalence of the use of CIFIFOB carriage Likewise, land transport services were often terms, in which nationals are not commonly highly regulated. The net result was a fairly the principals. An elaboration on CF/FOB rigid tan chain. This may have and their alternatives is accordingly in eliminated the need to worry about tranport order. choice, but was hardly designed to encourage initiative in searching out the, Cost, Insurance, Freight and Free on least cost alternative. This situation is now Board changing; cargo reservation systems are being abandoned and trucking (and even 5.3 CIF are terms of carriage rafl) operations being derulated. commonly employed for imports and FOB for export (collectively known as 5.5 Cotinrzation, by is very INCOTERMS, from the International natu, places less emphasis on two Chamber of Commerce, ICC). Under CIF, predetermI ports. being the dominant the seller arranges insurance and freight points in a internand journey, and indeed (though the buyer actually takes the concept of ports, and associated responsibility for the goods from the time organations such as customs authorities, as they are loaded on the ship, and should points of interruption rather than termination make any insurance claim). Under FOB, In the flow of goods was recognized mor the responsibility for freight and insurance than two decades ago(Ref. pass from seller to buyer when loaded on the ship. Thus importing CIP and exporting 5.6 Itisfor therefore, FOB, the traditional Latin American pattern, that the retention of the means the involvement of either importer or traditional COB distribution in Latin exporter in determination of the physical America is a function of lack of knowledge links of the transport chain to be employed mWor lack of interest in greater is limited to domestic !and transport. i in tie transport question of the pros and cons of greater market and that in the long run this will dee i countrypo in transport inhibit the competitiveness of regional Chapter 5 15 exports (and increase the cost of imports). Multimodal Transport This is a view held by CEPAL, which has drawn attention to it in recent studies 5.9 One of the main differences (Ref.16). between transport which is segmented by mode, and that which is known as combined 5.7 Another CEPAL study (Ref.17) or multimodal, is in formal responsibility for gives a breakdown of distribution chain carriage. The UNCTAD/ICC Draft Rules costs for Chilean fruit exports. (Details in for Multimodal Transport Documents give Annex 7) While the authors note the data the flavor of the legal obligations, and are should be used with caution, they illustrates reproduced as Annex 8. Under a segmented the importance of transport cost elements. transport regime, a transport agent, such as The study shows that the costs incurred a freight forwarder can, and normally does, between FOB Chile and after discharge at arrange through transport - but his liability the port of destination (i.e. those costs does not formally extend beyond a certain susceptible to variation according to the point, usually the ship's rail. There liability routing chosen) amount to between 28% and passes to another agency, which may, in 42% of total distribution costs. As the fact, accept no liability at all. A second residual to the exporter can be as low as issue, which relates to the -Rules- that 8%, and the remunerations of the workers, govern seagoing shipping, and the proposed most of whom are on minimum wages, as Multimodal Transport Convention (MTC) little as 2%, the possible effect of savings which covers all forms of transport in a from more flexible routing are clear. multimodal movement, is that even for the segment of transport represented by the sea 5.8 The CIP and FOB carriage voyage, the liability may be very limited, terms have another characteristic which depending upon the rule applied. This makes them inherently inappropriate for relates partly to when the various rules came container movements. The formal change of into force. The "Hagueu rules date from responsibility for cargo under these terms 1924, with subsequent amendments passes from seller to buyer at a ship's rail. (OHague-Vis, etc), promulgated long before This was generally acceptable for general containers were even dreamed of, and as a breakbulk cargo, but it is worth repeating result are really only applicable to breakbulk that the full advantage of containerization is cargo. not realized unless transport from door to door is envisaged, and the institutional 5.10 Attempts have been made to arrangements, of which carriage terms are address the above problems, dealing in an important part, adapted appropriately. parallel with the liability of the ocean carrier What has been proposed are the so-called and the increasingly important Multimodal now INCOTERMS , promulgated i- 1980, Transport Operator (MTO) arranging the which essentially change the transfer point door-to-door container movements. The away from the ships rail (See Box 2). former would be addressed with ratification 16 C~apeer 5 BOX 2: LIABMLTY AND TERMS OF CARRIAGE Conider a typical movement of a product from point of prodution to a %a destination overseas. It can esily pmase evely into the tender care of seven transport ai sometime lss and not countg the no-transport agents or the differet age~ts within a link. Tho trucker who carrie It to a railhead, the ralway, the port, the shipping line and the equvalent operators at the other end may al have different carriage and insurauce obligations. This was someting that, while ardly ~ ~trsfary, was resenably consstent with the fact that breakbu~k cargo, a~mnly stored on pallets orn bags, was at teat visible at a transfer points and, if daage or lss ocum d, responsiility could be pinpointed fary accrately. The Contine, however, pos the problan that, in optimu usage, It is not opened from ouigin to desia^tin, and consequenty, 'concealed damage' is very difcult to attribut. The ~hanges in the transport characterisdes have tended to be re~ected in the "Rules" governing tiability, but with a time lag. The fo~owing smnaries, in chronological order, the mai chags Introduced or proposed, from the starting point of the Hague "Rules". Except for the proposed Mutti~oal Transport Document rue, the rules referred to apply to sea transport. T (1924) employed the concept of a unit as the basis of liabiEty. Thus, a containe could be classed as a unit, with the liability applg tog unit, not the number of units contind. The original ahilty per unit was 100 pounds sterdag m ^a~imnn Many mability exeepeos pemttod. Thr are 7 contraed~g countries. P (18) anae the Hague Ruie, and is commonly referred to as the Hague- Visby Rules. Under these, the unts In~de the container are recnnd as the basis for ~ #abity, provided they are men~nd in the transport documents, and provided the contines are m to be under-deck cargo. iabilty was doubled in real terms. Defenc from liabity virtuay nschangedm There are about 20 less contraedg parts, including some very important trading countri. Th H br M (adopted 1978 but not yet rad~ed). This introduced liabity for deay, and eliminated the prevou tiabity distinctin between dock and under-deck cargo. The signi~cance is many continer are carried on deck t aIO rune and clarified defene aga~ut liability. Importandy, It atendod liabity of the ocean carrier uni dever of cargo, I.e. beyond the ship's ra. R, aNso, recogni e other than the rater rustricdve "Bil of Lading". ne MuModÉcalunpr =ntion (adopted 1980 bt not yet radfed). This codies what las bec~me increasigly commn pra~ce among multModal transport operators (MTs); the amm pon of door-to-door tiablity. Such liability teneion is pardy a fmetion of the difculty of den%ning when "cnealod damage" to the contente occur when cargo is contan~ *ed; only when the antine is &Onay opened is damage (e.g. by seawater) revealed. The åabilty is expressed in the muldmdal transport doc ent, whch is u e the bi-of4adng, which was United to sea transport (Ar transport had different documents). Tr of Car have a4unted accordingly, in theory at ast. 14ee on Board (OB) generafly a d to e ad Ct I n e ight (CIF), for imports, related to Movemt frOmlto the ship's raR. The modern ter~s (W * Carrier at..) FRC, Carriag pald to.(DCP and Carriage and Insurance paid to..(CIP) all pass full liability for final delivery of goods to the principal carrier, commonly a ITO. Chapter 5 17 of the "Hamburg' rules, formulated in consignors/consignees may be unaware of 1978, which requires one additional the options open to them, and how these are contracting party to meet the required changing over time. Thus national twenty,(expected in late 1992) and the MTC authorities are faced with a classic dilemma. which is much further behind with only five They would aot wish to restrict entry to the out of a necessary thirty signatories. transport market, and certainly not to establish "national* transport companies 5.11 The relevance of the rules and which, lacking the stimulus of competition, convention, apart from the determination of have a tendency to become overstaffed liability per so, is that they do provide a bureaucracies. On the other hand, where common framework within which competitive, or even contestable, markets contracting countries can actually operate. have failed to materialize, the state has an For example, Chile has written the Hamburg interest in ensuring that unregulated private rules into national legislation but is not monopolies are discouraged. applying its main provisions until ratification. This seems to give an Electronic Data Interchange (EDI) advantage to major international transport operators in establishing themselves as 5.13 EDI is the concept of dominant Vessel Owning,or Non-Vessel transmitting electronically information that Owning Multimodal Transport Operators traditionally has taken a paper form. As (VO-MTO or NVO-MTO) insofar as they with most activities employing computers, can, and do, independently arrange (see Box 3) EDI was introduced as a wide- liabilities, while if the MTC were ratified, spread concept only in recent years, and has the issuance of a multimodal transport been undergoing a period of rapid evolution; document would require adherence to an the scope and concept today are substantially internationally established liability regime. different from those obtaining only five The fact that Mexico is already a signatory years ago. EDI, like all new systems, has to the unratified MTC does not seem to have had its "teething troubles* and as a result, it stimulated multimodal development there. has been argued in some quarters that as the FAX system is well-nigh universal in 5.12 It might be argued that business and even personal applications, and international transport is a high risk activity, can transmit copies of documents increasingly one characterized by economies instantaneously, there is really no need to go of scale (particularly in the sense of into EDI. A review (Ref.19) of recent generation and use of information) and that developments in EDI gives the basis for the operation of the marketplace will ensure disputing this position. against "exploitation" by the foreign shipper. Thus there is no real need for 5.14 The first dynamic aspect of EDI Latin American countries to concern is that both the scope and universality of themselves with establishing their own the system has developed significantly. The multimodal systems. This may be true system relies upon the development of a where the transport markets, both in their series of standard messages which can be physical and informational aspects are passed electronically from a consignor or reasonably perfect, but it is doubtful if this freight forwarder to the various members of is universally the case; shipping of imports the transport chain, and it was only in the and exports in some countries tend to be mid 1980's that such messages began to be dominated by a few major carriers and 18 Chapter 5 BOX 3: ELECTRONIC DATA INTERCHANGE (EDI) EDI Is dey auodated in international transport, with Dred Trader Input (»Tt) of infor~atlon required by tens~ The underiying concept is straightforward; subetitutin of legally acceptable trmleln~ of Information by de~tronic rather than phslcal (paper) mans. This reduces costa, wr~ie and time requred. The impl em .ation bowever, Is much kes simple. EDIin Its ultimate form Is a systea of computers, and If the languages are at va~anc, mm~eges will not be passed. The language that is now generay accepted bs know as UN/EDIFACT, a document standard that bas been devdoping over the past decade und the auspics of the UN Economic Commisseon for Europe (ECE). As recentfy as 1985 several distinct standards isted in different parts of the work, and it was only in 1987 that first EDIFACT mesage was adopted. These mesages (current status given at Annem 9) are still In various states of trial and acceptance, bot in essence encapsulate information that in paper form require over 30 documents and over 300 pieces of paper. The "wrd", or data demnent, cover such concepts as Invoice aumbers, date of shipment, customs dassfincadn. To date som. 700 are stored In the IUN Trade Data Elements Directory (UNTDED). The development of EDIFACT is unde the ECE Working Party on Faiitao Internaional Trade Pr,ocedurs, wbch In tum has laison ofic s In the 35 main trading countries (indudIng only Bra in Latin Amfeica). A central focu of EDI we is cutoms. AD international trade passs through local customs, and if nse are passing in dectronic form from cousignor to comignes, but being passed to cetoan in paper form, many advantageare lost. Unfortunately, there has been a tendmncy forindividualcutoms to develop their own systems, which may require adaptadon to become compatible with those of other cutoms orgnhations, and of different traders. Even the US cntmns had to introduce EDIFACT in paraflel to ifs own Autamated Broker Input System, bot It appears that In most mador trading countries, cpiomtie systems are now in place. The mp web f sa passing in a normal trade ati requr compadbty not only between A and 5 bot with C....Z. In Singapore, which was a leader in EDI development, the goveranment toök a leading role in estaihing a standard syste ("Tradenet"). Hong Kong has developed "Tradelink" and the Republic of Korea is currently developing what appears to be an even more comprehenlve syst MKTNet". The alternative approach is the development of so-ca~ed "Value Added Networks" which act as intermediaries between different systems. The use of EDI Is growig rapidly. Although difterences in the scope of the use of EDI mkes cross- country comparsons sspect, the folowing are Mstrative a) USA 9,00 muen I1989, 30,000 by mid- 90's; b) Europe 5,500 in 1991, 40,000 by mid 19s90s; c) Singapore 50 in 1989, over 2000 in 1991. By contrast, Meic, which appears to be the most advanced country in Latin America, expec s to have about 1,000 us in 1992, mostly with strong US connecdo. Possible fnancial savings vary from one situatin to another. The ECE estfimated that EDI could save 8% of the value of intra-EEC trade. At the other end of the scale, the Meuican hipping line TMM ame~s current savings of US$ milton per year fkom EDIänksg of kis fleet, with reduction in data receiving and processing time fram 16 days to half as many Jan,i Chapter 5 19 systematically developed. Naturally, traff, most of which will eventually be establishment and testing of such formats replaced by electronic messaging) The takes time, and again, if one goes back five possible use of EDI is not necessarily years, not only were the number of confined to large companies; the use of messages limited, but so was the degree of "third-party services", companies standardization. An example is that when specializing in data transfer from one Singapore, where centralized Government system to another can enable small led decisions are common, decided to companies to join, and indeed will be a introduce EDI in 1986, it had to devise its central feature of the system in the own messages, which are now having to be foreseeable fture. reviewed to be compatible with what is becoming the worldwide standard, known as 5.16 All of this tk time, first to UN/EDIFACT. Since then EDIFACT establish satsfctory and frameworks (the schemes into which procedures, then to set up systems and messages fit) and the messages themselves equally to correct mistakes. The Republic have been substantially developed (including of Korea established "KTNet" in 1990, but the International Forwarding and Transport the comprehensive system is not expected to Message Framework (IfTMFR), and thus be fully operational until 1995. the Singapore pioneering approach is much less necessary. (Annex 9 summarizes the 5.17 The narrowly defined costs and present range of messages, and their states benefits of EDI, as with of development). vary from one organization to another. charges to join and operate within the 5.15 The second dynamic aspect is Singapore system were expessed in terms that, just as breakbulk general cargo of a connection charge of S$ 750 (about operations are becoming rare where US$ 250 equivalet), about S$ 3.5 per containerization is feasible, it is probable declaration, and from S$ 5,000 to S$ 8,000 that in the future paper documentation will hardware and software. With subsequent be superseded generally by faster, less shai reduction in computer costs, expensive and more reliable electronic presumably entry costs are lower. The documentation. The ultimate objective will benefits per cosi -t in term of be to have direct computer communication document cost reduction, have been of trading data (known as Direct Trader estimated by the Economic mission for Input (DTI)) In the near future, it seems Europe for intra-EBC trade, as equivalent to inevitable that trading countries and about 8% of its value of companies which cannot meet acceptable Other estimates give different figures, but data interchange standards will be all cases savings are expected to be disadvantagedcommercially. "Just-in-Time substantial. Clearly, even allowing for the concepts cannot operate effectively on the smaller benefits which will obtain where basis of paper dominated documentation. labo costs are lower the rate of return on (Annex 10 illustrates the current "paper EDt investment is potentially substantial. 6 RESULTS 6.1 To briefly recapitulate the Thus no insights into LCL problems were objectives described in paras. 2.1 to 2.4, obtained from the survey. As far as we can the specific areas of concern were LCL judge, there are no legal distinctions or movements, documentation, customs restrictions that apply particularly to LCL procedures and multimodal transport movements. However, LCL shipments in development. It is clear from the results of particular rely on freight forwarders as thequestionnaire, and intuitively obvious, intermediaries - and freight forwarders that these elements are interlinked, and thus commonly have a status in civil law only as there Is an element of artificiality in agents of the shipper. In other words, their analysing them separately. Nevertheless, liability in case of loss, damage or delay to these four elements are examined separately cargoes, is rather limited. Thus unless a below, with the interrelationships noted. freight forwarder has taken on the status of a Multimodal Transport Operator (MTO), A. Isem-Than-Contaner (LCL) which is not commonly the case in Latin Movements America, the small shipper has little control over his cargo, which may well inhibit his 6.2 *ontaInerization" is essentially the entry into the international market. We also substitution of movement in large boxes for have the impression that small shippers have moveme"t in comparatively small quantities limited means of obtaining information on on pall As or slings ("break-bulk) and its international trading opportunities and develck,ement has generally taken the form of procedures. both increasing the percentage of movements of a particular product which occur in 6.4 Freightforwarders, eitherindependent containers, and broadening the range of companies or subsidia associates of products which are containerized. Thus an international freight forwarders, suggest that exporter of a medium/low value product LCL problems, where they exist, are (say ceramics) would typically move through particularly related to customs. As was stages of both broadening of the groups of noted in the previous chapter, customs in products cntainrized, and deepening of the two of the countries surveyed have in theory container penetration of the particular quite trade facilitation "friendlyl procedures. product group. In both stages, which will In practice, an underlying preference by proceed interdependently, different customs for close control of containers at destinations, and possibly product mixes, the country frontier, and excessive concern will result in the company initially about keeping track of containers, means producing an insufficient amount to fill a that even where Inland clearance depots container, and eventually justifying a full (ICDs) exist, they are little used. ICDs container movement on a regular basis. have the major advantage that they enable containers to be sealed away from the ports, 6.3 The intrinsic difference between LCL where goods are generally believed to be and Full Container Lnd (PCL) movements particularly vulnerable to theft and damage. is the need for an intermediary to consolidate/deconsolidate LCL movements. 6.5 Thus the situation regarding LCLs is In fact,. all the survey respondents bad a) there are no legal problems pertaining reached the stage where they were able to specifically to LCLs b) freight forwarders send or receive cnsignments as FCLs. are well established, and are competent to Chapter 6 21 handle the particular operational players on the paper trail are less requirements of LCLs but c) however, bureaucratic and have less scope for gaining freight forwarders legal status generally from flexibly interpreting procedures than leaves small shippers at risk and d) customs those in Argentina and Costa Rica. practices, in inhibiting the use and development of ICDs, put LCL shipments at 6.8 A special case of documentation unnecessary risk. is that concerned with obtaining access to foreign exchange. As all four currencies are B. Docuentation and Procedures convertible, the problem is presumably In assumption of the foreign exchange risk, the 6.6 The role of documentation in transaction cost, and the notification international trade is a very wide subject, procedures. The problem has not been ranging from the arrangement of the means investigated in depth in this study, but it of financing a transaction in two or more does appear that it is significant. currencies, which may involve exchange controls, through insurance, to evidence of 6.9 In summary, a) substantial the type and volume of goods being shipped. documentation is involved in ternational A typical transaction may involve over 50 trade b) probably most of this is separate documents. (Annex 9). For the commercially necessary in most countries; surveyed countries, it seems that a large Latin America does not appear to be more number of laws are involved, and it is not subject to petty regulations than anywhere possible in a paper of this nature to else c) documentation concerned with the comment in detail upon them. It is banking system, which presumably relates to however, clear that for most foreign foreign exchange transactions, seems to be transactions, the resulting documentation is a particular problem and d) documentationis generally that associated with break-bulk inevitably subject to interpretation, and general cargo movements, in which the interpretation to possible abuse. It is natural point for transfer of responsibility is probably no coincidence that discontent with the ship's rail, rather than containers, whose documentation was greatest in the two whole essence is movement with minimum countries where trade reform was in a interruption from origin to destination. (see comparatively early stage (and where discussion on CIP/FOB below). customs had not been reformed appreciably). 6.7 The procedural aspect is what is done with this documentation. A regime in Customs Organization and Procedures which the strict letter of the law is enforced can make conformation to comparatively 6.10 What customs are permitted to enlightened documentary requirements more do, and how they interpret regulations, are onerous than where common sense is critical to trade facilitation, particularly applied to outdated documentary when a conceptual change such as requirements. It is obvious that the situation containerization is introduced.(See Box 4) in the four countries on this aspect is even It is quite clear that when survey fieldwork more difficult to determine than whether was undertaken, Chilean and Mexican the documentation is appropriate. We have customs were viewed as being reasonably the impression that Chilean and Mexican 22 Chapter 6 BOX 4: CUSTOMS REFORM Customs services have several functions. Control of entry, or exit, of forbidden or restricted products, collection of duties and taxes (not necessarily entering foreign trade) and collection of relevant statistics are all important. From the point of view of transport flows, afl of these represent hpediments and in particular, rigorous Inspection to ensure that there Is no underrecording or misdassification In a complex regime or import or export duties can be very time consuming. Customs reform has therefore gone hand In hand with trade reform. The best enample of this Is in Madco. Five years ago, Mexican tariffs were as high as 100% and quota restrictions were commonplace. Currently the top import duty rate is 20% and the average under 15%. In customs, major improvements described below, were made almost concurrently. In other countries both trade reform and customs hmprovements were well behind. In Argentina, Industry was still heavily protected, and customs operations traditional, with poorly paid officers, while in Costa Rica, a report (see Annex 4) described the organizations of customs as chaotic, slow and poorly trained and paid. The general thrust of the Mexican customs reform program which, conceptually, seems a sound model for other countries requiring reform to review, had seven main features a) sIplification of documentation and, probably more Importantly, procedures for processing it; b) subsequent Increased substitution of electronic processing for manual; c) associated Introduction of objective, electronicaly generated, random Inspection for (theoreticaly) comprehensive Inspection; 4) clear separation of the liability a men functions from payments, which go directly to commercial bank accounts; e) Increased salaries which make the profession more attractive, and make the potential loss of a job more of a deterrent to dishonesty; f) liberating entry to the customs brokers profession, thus reducing 'rents'; g) Increase In the disincentives to Inacurate recording through higher flues on consignors/consignees and possible disqualification of the associated broker (see Annex 5 for more detail). Although the Mexican reform program has largely been Implemented, there are reportedly still discrepancies between theory and practice. Heavy traffic at the main US border crossing has encouraged attempts to bypass even the Improved procedures, and at the ports overzealousness, misinterpretation, or badly drafted rules (we are not sure which) reportedly results in whole consignments being delayed for the inspection of one container. The lesson, perhaps a depressing one, Is that while regulations can be changed at the stroke of a pen, changing behavioral patterns takes much longer. Chapter 6 23 effcient, while those in Argentina and Costa Where only one or two containers are Rica were not. involved, as is typical in cross border truck movements, the chances of stoppage are 6.11 A comparison of the analyses of obviously less. the problems in Costa Rican customs (Annex 4) and Mexican (Annex 5) suggests that, 6.13 In summary a) except in Chile, even allowing for stylistic differences, the customs services needed reform b) the problems were more fundamental in Costa Mexican reform program is the most Rica. The Costa Rican situation was advanced and appears to be a good model, described as chaotic, with poor control, though procedural problems still exist c) inadequate data and (we surmise) even such reforms should be tailored to best inefficient corruption! Mexico, by contrast international practice. The Costa Rican suffered more from the locus of customs experience suggests that "going it alone' can services in the government structure, the have serious consequences d) however, Internal organization and procedures modem means of speeding up customs encouraging corrupt practices, and a 'closed operations, such as those associated with shop' of customs agents, who were the EDI, need to be introduced if a country's experts who piloted the shipper through the competitiveness (and ability to fulfill such system. The summary of Argentine customs conditions as *just-in-time) are to be met d) problems prepared for the East Coast of poorly paid and inadequately supervised South America Study Containerization customs officers, faced with theoretical seminar 1/ suggested that they were obligations which cannot be fulfilled (such different from the other countries, partly due as to inspect the contents of every container) to the dominance of Buenos Aires, the are liable to discriminate between clients for congestion in the port, the resultant personal gain. desirability of moving containers out of the port for clearance procedures, and the reluctance of customs to allow this. Multimedal Transport 6.12 It is also apparent from the 6.14 Multimodal transport, in the Mexican survey that movements across the limited sense of the movement of a single land frontier to the US encounter fewer unit of transport (a container) by more than problems than through the seaports. This one mode, is increasing quite rapidly in all may be due to the greater flexibility, both four countries. However, it is much less physically and administratively, of truck clear that multimodalism in the broader movements where the transition from one sense, of a single entity (commonly a freight country to another involves change of forwarder or shipping line) taking full tractors, (and drivers) rather than a responsibility for the movement of a completely new mode. It may also be due container from consignor to consignee, has to the fact that bills of lading (used for sea developed to the same extent. movements) can include quite a large number of containers, and customs 6.15 The survey showed that few procedures dictate that If one container is respondees considered they employed stopped for inspection, the whole multimodal transport. This was despite cnignment movement is Interrupted. using containers, which meant they were 24 Capter 6 thinking of the term in the broader sense. company. It appears to be in the forefront This deduction is supported by the of multimodal transport development, in the prevalence of the use of CIF and FOB terms broader sense, and is also developing EDI of carriage, which are associated with capability. It does, however, have almost a rather than multimodal monopoly position, notably on the Pacific transport. Nor was any mention made of coast, where competition from international problems with shipping lines as a result of shipping lines is intrinsically less. Do the monopoly practices or foreign domination. monopoly gains, in technological development, outweigh possible losses? 6.16 Other sources suggest that, with We do not know because we do not kow the exception of Transportes Maritimas what have been the inhibiting factors on Mexicanos (TMM), the main Multimodal similar technological development by other Transport Operators (MTOs) are foreign actual or potential MTOs. rather than domestic, but that shipping services are more competitive than a decade 6.18 In summary a) multimodal ago. This has resulted from the transport, in the broad sense, does not seem progressive abandonment of cargo to have developed as rapidly as might have reservation systems and the entry of been ctpected b) there are a number of shipping lines already experienced In possible explanations, which were described intermodal transport (such as those operating above but cannot be analyzed adequately out of US Gulf ports). without more fieldwork c) there appear to be sufficient differences between countries 6.17 ThesituatlanofTMMillustrates for such further work to be best undertaken the potential dilemma posed by multimodal at a country rather than a regional level d) transport development TMM dominates probably at this time, and certainly if Mexican shipping, handling in aggregate present trends continue, dominance by more than half Mexican seaborne cargo. foreign MTOs does not appear to be a While there is substantial, if dispersed problem and e) in any case, the scale public sector ownership of its assets (eg economies of advanced MTO operation may Mexican Railways is a shareholder) TMM mean that sacrifice of some elements of acts as a private, financially independent competition may be inevitable. 7 CONCLUSIONS AND RECOMMENDATIONS 7.1 The conclusions and true is that procedures for processing these recommendations that follow are presented documents is still labor intensive - probably under two headings, those which address the more so in some countries than others - and potential issues described in Chapter 2, and that this characteristic gives more scope for those which flow from ancillary analysis delay in processing, and for manipulation to speed up the process, than more mechanized On Chapter 2 Isues systems. Thus it can be concluded that the development of procedures for handling 7.2 LCL Constents As none of the documentation has not improved at the same companies Interviewed habitually fell into pace as physical developments, even though the category of LCL, it is difficult to arrive they themselves have not, in some cases, 'at definitive Conclusions. Nevertheless, it been adequate to cope with demand. Also, appears that there are no specific legal or procedures associated with the banking documentary requirements that would system, presumably related to foreign particularly operate against LCL shipments. exchange transactions in particular, are a Recommendation. The basic problems are cause of universal discontent. therefore, lack of information and lack of Recommendation. Documentation and responsibility. Chambers of Commerce are procedural requirements related to foreign an obvious source of information, but their trade, in the commercial banking syste., remits are rather broad and, as most trade is should be reviewed to determine whetr internal, they naturally tend to focus on that allegations of high cost and slow processing area. There are clear economies of scale in are justified, and what measures can be obtaining and maintaining information taken to address such problems. This is dealing specifically with international trading clearly a specialized area, more suited to a questions. Thus the establishment of what TF division. For directly transport related might be called Trade Facilitation Officese, documentation, its appropriateness and need strategically located, which would be staffed in relation to increasingly containerized by individuals experienced in intemational traffic should be reviewed on a country by trade documentation, is recommended. country basis, by experts. If the They would be financed in the same way as documentation is found appropriate, the Chamber of Commerce activities, and access procedures should be sequentially examined, to their services would be open to all. Their and once both areon a satisfactory basis the constitutions should make clear that use of scope for the ultimate stage, of introduction their services is not obligatory and that they of EDI on a national basis, should be would not be acting as intermediaries in the determined. It should be emphasized that provision of transport services. (Tis was a the long lead time in introduction of problem which detrimentally affected the comprehensive DI means review of former Centrales de Carga in Mexico). documentation and procedures should be initiated quickly. 7.3 and Procedures. The Conclusion is that there are a large 7.4 Customs. The Conclusions on number of documents involved in docmentation and. procedures apply internatioal trade anywhere, and there is no particularly to customs. With inadequate conclusive evidence that number is excessive customs reform, improvements elsewhere in the four countries. What does seem to be cannot achieve full potential. The efficiency 26 chapter 7 of customs services, and their locus within the *Hamburg Rules" should be adopted into goverment, are clearly under review in all national legislation. The same applies to the four countries, but at different stages. The Multimodal Convention, where ratification Mexican model seems to provide a good may be further off. Where cargo example of a systematic approach to reform, reservation systems still exist (in practice as though the bias, almost inevitably, is well as legally) they should be abandoned towards collection of duties rather than trade unless clear evidence of their benefits at a facilitation. Recommendaton. The locus national level can be established. Also, and eficiency of customs should be where a single shipping line, whether measured against the Mexican, or other domestic or foreign, enjoys monopoly or systematically developed model, making due near monopoly conditions, the determinants allowance for local conditions. Proposed or of such conditions should be reviewed with Installed customs computer systems should the objective of introducing competition. To be reviewed to ensure compatibility with the ensure that the full benefits of broadly increasingly standardized international EDI defined multimodal transport are secured, networks(In effect, with EDIFACT). the introduction of EDI needs to be Procedures should be reviewed to ensure encouraged. they are not being applied with the objective of supplementing meager salaries (which implies the salary levels should also be On Ancillary Matters reviewed). 7.6 Some Conclusions canbe drawn 7.5 Multimedal Transport. The from the Mexican experience with transport Conclusion is that the ratification, and, on deregulation. First, competing sub-sectors a specific country basis, adoption, of the should be afforded the same degree of "Hamburg Rules", will be a big step in deregulation. This may seem obvious, but establishing multimodal transport In the in an otherwise successful deregulation broad sense of clear and adequate process, Mexico's unwillingness (or responsibilityfordoor-to-doormovementsof Inability) to deregulate the railway at the containers, which include a sea component. same time as trucking conferred a clear Ratification of the Multimodal Transport advantage on the latter. Secondly, trucking Convention which has broader implications, deregulation can lead to wide disparities In and its adoption, will be of further trucking rates. This may be due to Ramsey assistance. Beyond that, however, pricing, (effectively, covering fixed costs appropriate terms of carriage need to be from charges on traffic with low elasticity of adopted. This might occur naturally, as a demand) in which case it is unobjectionable; result of the above ratifications, but it is not if society wants below-market rates it will certain. There is no evidence of detrimental have to target subsidies. If, however, the domination of multimodal transport by cause is the continued existence of foreign operators. nn t monopolies and barriers to entry, previously Existing country specific legislation should not evident because of controlled tariffs, be reviewed to ensure that it does not anti-monopoly action may be necessary. If unnecessarilyinhibitdoor-to-doormovement there is no legislative framework for such of containers (door-to-door including action, its creation should be considered. movement to/from ICDs). Once ratified, The same problem may be occurring in shipping. Chpter 7 27 7.7 This report is partly based upon data results, and the issues, rised, outside the for the first half of 1991, and it is clear that Bank through a regional or sub-regional many things can change in a year and a semua. The basic objective would be to quarter. Nevertheless, there are some stimulate discussion and briAg together fundamental messages that transcend time - of the various agencies imposing new technologies on antiquated involved in trade and tnort, to try and processes is unlikely to work, that well formulate a reasonably common stategy for intentioned actions to provide services can impvn the efficiec of the system. produce undesirable effects if the power of Probably a sub-regional seminar, focused on knowledge is abused, that reinventing the northem Latin Americawouldbepreftable. wheel can be expensive, that a container Costa Rican authorities (tculay the should be seen as a means to an end rather Coalicion I de Iniciadvas do than just a large metal box. For this reason, Desarrollo (CINDE) hav epssed interes it would seem desirable to promulgate thea in assisting. REFERENCES 1. a) South America, West Coast Container Study WB 1987. b) Conclusions of the CEPALJWorld Bank Seminar on the Future of Conainer Transport in the West Coast of South America, WB 1988. c) Mnntnineri-ti n on the East Coast of South Amerca, WB 1990. 2. a) Situation of Cargo Transport for External Trade, IMT, Mexico 1991. b) Costa Rica: Trade Pacilitation and Transport, Nancy Jesurun-Clements, WB 1991. c) Obstacles to Container Transport, The User's Perspective (Argentina and Chile) CEPAL, 1991. 3. Discussions with freight forwarders ReexpididoraInternational de Carga-Concorde, S.A. de C.V., Mexico, D.F.; Union Air, London; Danzas, London; also JUNAC, ALACAT, FIATA. 4. ontnineriation Intemational, November 1990. 5. Labour Redundany in the Transport Sector. The Case of Chile. Jan Svenar and Katherine Terrell for WB, July 1990. 6. Containeriztion Tnternational, February 1991. 7. Chile; Deregulation of Shipping. Esra Bennathan, WB Discussion Paper No. 67, 1989. 8. Costa Rica Transport Sector Project, Staff Appraisal Report, April 1990. 9. Costa Rica: Trade Bxpansion Program Study, WB, 1992. 10. Mexico: Study of Selected Issues in Transport, WB, June 1988. 11. Agreement between the Mexican Government, Mexican Railways and Major Users, May 1991. 12. Mexico: Highway Rehabi lon and Trafic Safety Project. Draft Staff Appraisal Report, 1992. 13. EDI in Mexico. EDI Forum 1992. 14. The Economic Implications of the Entry into Force of the Hamburg Rules and the Multimodal Transport Convention. UNCrAD 1991. 15. M~east Port is Best Port.' George Holroyd, Charpan, Bell Line 1978. 16. The Distribution Chøin and the Competitiveness of Latin American Exports. The Case of Brlin Footwear. CEPAL June 1991. eernsa 29 17. Chilean Fruit Exports. CEPAL 1988. 18. Manual on the Physical Distribution of Export Goods; International Trade Centre UNCTAD/GATT 1988. 19. Towards Paperless International Trade; EDI and EDIFACT, Alain Bellego, UNCTAD, 1991. 20. Singapore Tradenet* a Tale of One City. Harvard Business School, September 1990. 1 11 1 El .1 1 80 1 Ii 1 iii *11 Ii .1:. jZ~ 1sfi ,8i~ D8~ Iii 1* 1 ii .11:1 1 1 0 ~8 ju. .1 tt b Ii: 1 ~~ ulf il t U 1 Anner 1 31 . RU Y MO DE L ¿Cu~Ies son las dreas geogr~ficas más importantes de sus importaciones/exportaciones? (Por ejemplo: países de América tina, América del Norte, Europa, Africa y Asia). U. ¿Qué proporcidn del total de su volumen de importaciones/exportació se transporta por (a) aire; (b) mar, (c) tierra? Por favor lndique las principales razones para escoger eso modo de transporte. IU. ¿Qué proporcida del transporte por cada modo se hace (a) en forma unifa (contenedores, paletas, pre-colgado; por favor especifque) (b) como carga no unifica; (c) a granel o (d) otro (por favor especfque). ¿Cules son los principales problemas y beneficios provenientes del transporte »unifi *? C. PARTICPANTES EN LA CADENA DE TRANSPORTE L ¿Hace usted sus propios arreglos de transporte para Importaciones/exportaciones o a través de un agente de comercio/envfo? Si usa uagente, por favor suministre su nombre y su teléfono. (Las respuestas a las siguientes preguntas se pueden expresar en forma matricial. Por favor use la matriz incluída después de la pregunta IV). 32 Anne 1 I. Si usted hace sus arreglos a siguiente lista incluye agencias que podrían estar involucradas en la cadena de transporte para importaciones/exportaciones. Por favor indique cuales son: Muy Importantes (M); Importantes (1); 6 Poco Importantes (P); para su compa~ía. Indique tambidn si son Nacionales (N) o Extranjeras (E): a) Agente de Carga (NE) b) Agente de Aduana (N/E) c) Empresa de Consolidacidn de Carga (N/E) d) Gobierno/Ministerio (N/E) e) Aduana (N/E) f) Autoridad Portuaria (N/E) g) Pactos Comerciales Regionales (Indique que actividad económica) (N/E) h) Operador de Transporte Multimodal (MTO)(N/E) j) Buque de Linea (N/E) k) Consignatario (N/) 1) Banco (NIE) m) Aseguradora de Carga (N/E) n) Aseguradora de Contenedores (N/E) I. De los participantes considerados Muy Importantes o Importantes, por favor indique ym cada uno si el servicio es Satisfrtorio (S); No Satisfactorio (NS). IV. Donde el servico se considera No Satisfactorio (NS), por favor indique que aspectos son problemáticos: Costo (C); Tiempo (T); Riesgo de Daiío o Pérdida (D); Otro (O). Si usted señaId *otro, por favor mencione de que aspecto se trata. Anna 1 33 MATRIZ Participante Origen Importancia Stcf~acin Problema a b e d e f h J k 1 m V. Por favor dd un estimativo de los tiempos de prn de las diferentes acividades que se requieran para los flujosinternacionales (transporte, documentación, trmites, etc.). VI. Por favor dd un estimativo del costo anual de los pricipales problemas de sus flujos de comercio internacional. Vn. ¿Está usted tomando acciones especficas o tiene alguna sugerencia sobre cómo solucionar los problemas identificados cn las preguntas , M y IV de ésta sección? 34 Ama 1 D. APECTOS TENOLOGICOS L ¿Usa usted computadoras en la preparacida de su documentacida de importaciones/ exportaciones? ¿Cua es el principal programa usado? IL ¿Emplea usted algún sistema de Intercambio electrónico de datos (EDI)?. De ser asf, ¿Con cuál agencia está conectado?. ¿Qué sistema usa usted? Por favor describa brevemente. SATISFACTION WTH AGENCIES - SUMMARY AfG E -C i E S ARGENTINA CHRE COSTA MEXICO TOTAL RICA A B A B A B A B A B R/A Frigt Forwarder - _- 5 - 3 - 8- - Cargo Consolidator - 6 2 3 - 9 2 22 Custo s Aget 9 - 12 - 10 - 11 4 44 4 9 Government Agmcy/Dept. 3 l 7 7 8 5 4 3 22 16 73 Customs Authorities 9 6 13 - 7 6 10 2 39 14 36 Port Authorities 8 6 14 - 10 4 3 2 35 12 34 Trade Unions - 4 - 2 - 6 - - Multim~daTMq=pot OPU~to - 3 1 1 0 4 2 50 Moda Transport Operator 7 - 12 - 6 6 11 5 36 11 31 (Land)_ _____ Shippinglinm 7 1 11 1 7 1 9 2 34 5 15 Consignee/Consignor - 8 1 4 - 12 1 8 Bank 6 3 8 3 9 2 6 3 29 11 38 Insurer 5 1 8 - 7 1 5. 0 25 3 12 54 18 85 11 90 29 72 21 3M3 81 27 A = Nnber of respondees considering the agenc important. B - Number of aboe respondees considering the agency services unsatisfactory. 36 Annex 2 SATISFACTION WITH AGENCIES - SUMMARY IMPORTANCE SATISFACTON PROBLEM m I Y N C TD O a) Preight Forwardr1/ 6 2 0 b) Cargo Consolidator 1 7 2 2 2 ) Customs Aget 39 5 4 2 1 1 d) Government/Ministry 19 4 15 3 9 6 2 e) Customs Authoritis 33 7 14 3 8 2 6 t) Potuthoriies 32 4 12 9 4 1 3 g) Trade Unons --- h) Mulmodal Transport 2 3 3 1 11 Operator (MTO) Z_ i) Modal Transport Oprator 30 6 11 5 5 4 3 j)ShippingmLn 28 6 7 4 3 - 3 k) Consgne./Consignor ---- 1) Bank 19 10 11 4 5 1 2 M) Cargo Inmur r } 8 17 1 11 n) Container Insurer M = Very I Important C Cost T fTime D = DamageLoss 0 = Others (Genemal Administration, etc.) JV Mexico and Costa Rica only y Aso in~luded in Modal Transpor Operator Cona/, d, o, i, J, 1, m/n. RESULTS OF QUESTIONNAIRE AND INTERVIEWS MECO de Hons y Medun lIasio maMs fo shes 10B 8 TN Noh Amdos Tomnsdal NO C.V. PRODUC AND PFt0~uVES M~aboan 8. do Li. de C.V. Lag Ekocol, Col"~ewer POB 22,PO0 TN Nodh A~urica Tmeai 91% NO senpiich .Japon,alepp Mtidn 9% Aiatq~la 0Ggn Ve~de, S.A. do C.V. Lag Frmn Produc FOB 22,6~0TN Nodh Amrica Teaul 97% NO Japon Meime 3% Andeo~Clayo&Co.,S.A. Mdium Jalas bppr FOB 2,611,300 Noth Ameda Tesadu 95% NO do C.V. - D~vsion Clkomt. Psmerves, Nopa! Bauce TN Europ Mai~ 5% MARNar_ __ __ Ma~noaes y Ter~: S.A. do Medim Mables FOB 1200TN odh A~edca Toum~nal NO C.V. . Ce.mika Reglkmontana, S.A. Lage Tils and Pooos FO 3.5 b0ms Nod Amed~a Tesil NO de C.V. doM Mumoles Poanaa, d SA. de Medim M~r. blockd, Onk POB 36,8561N2 Nod Am~dia Ten~Wdl 80% NO C.V. Ptes and PaM~ts Ode~t Martme 20% Manan. bnrneolboalPebl, Medium General nabb products FOB Vadabls Nouh Ameri~ Vadabl NO SLA. do C.V. Japois op ~atseda.y MaMnaS S.A. Smal Mbla and Nat~l FOB 30,000 M2 Nodh Ameria Tee~tdal 95% NO doeC.V. Gran~es Ada Medlm 5% RESULTS OF QUESTIONNAIRE AND INTERVIEWS MEXICO '.PRODIMITI YVLUME QEgg ni FOTWARE " s mkmnnan y Medi~mi l'iti al t d~se FOB 8 TN Nodh As~edes Tonestdul NO Tfl de C.V. MARB Madmtle PoMmos IA ds M~dium MaM ~ooks, Onix 1B 36,858y2 Eops Mat~ia NO C.V. Plas and Fu~hst Odent Wadahual Govms Pacdas y Mäm S Sma Mahs and Nat~ CF 30,000 2 Nor AMeen Matins80% - de C.V. Grmnles Laia Anstica Tesal' 10% E~op CHEMicAL PRODUCTS ROMN and HASS Mexico, raanan Product POB 8,400 TN Soudh A~edes Tat~idal 98% NO S.A. daC.V. CIBe Ma~im 2% dat Quh~o DU, S. & Sa Oamlo a~ta CIP 180 TN Nodh Am~dea TOM~uial - NO C.V. EpodcasReis _an Amsica 100% A~COHOLIC BEVERAGES Seagamde Mex~co, s.A. de Lavg Whisky, Cogao and CIF 864,000 LIS E9op. Ma~tia NO C.V. Vodka ELECTRONIC EQUIPMm Pt~consunc~* LUr Spa F 3,000M3 Nod Amica Tk~trial SI Wntead~r h~a S.A. de Ta~=nk~naas. C.v. (p CONDUM Eqi NUM- flnn REULSOF QUESTINAä EADm~ERIW OtepoBABA Large Fabdm *OB 393,939M Noth A~ei Toneil NO CIemCAL PRODUCTS ROMH ad HASS M~do, Cca~ Products FOB 400 TN Soudh Ameica Ten~sial 98% NO SA. de C.V. CIB E Affimop/Ad Ma~d*s 2% ~ ~upoDupontS.A.deC.V. Large Ag*eemialm CIF S,0TN NodhAmda A~lipe. 50% YES FOB Latin Am~dea Madim* 35% ALCOHOLIC DEVERAGES Seagra~de M~do, .A. de larg Töquila pB 700,000 LTS E~pe/~apon Ten~esial 95% NO C.V. otors 5% CEME Inkracionl, S.A. de Large Pgtand Cement FOB 1,580,000 North Amed~a Ten~sra 63% YES C.V._any or White TN Aea Matime 37% RESULTS OF QUESTIONNAIRE AND INTERVIEWS COSTA RICA 499 a PauT TEM VOLJUME ORIGIN MQpjI g KATIVO Lagp Cbeicals CIF 1,800 NAdh~Aeda Air 5%, NO Bope/Mexico Maritme 9%, T"~gtraI 5% MATRA Medium Machinery,Vicles, CI 2,000 NothA~uric Air 10% Pada CaOa=& Teneda 90% SCOTT PAPER ~ &ge Paper Piber ioaw CEP 15,000 Noh Amrica Ak 1% NO M~ ma95% Tenestrial 4% DOLE Imge - Raw matera,ON Norh Am~dca Marime W% Equ~mnt, and Pats CIF Air 15% CEPA Lge Mediations Cosmetics FOB 200 Nodh Amea Mar~m 40% ana lrpines CIP Emop, ~ di Air 55% Mexico Tensria 5% cOOPEMONTECR,00S m uge Machiny ana spem 0B. 7,000 North America Dialog Pat CIP La~ Am~dea C&F Buope RESULIS OF QUESTIONNAIRE AND INTERVIEWS COSTA RICA CAFE CUV CIP 1800 NenhA~ao Aks%, NO nmape/MauIo M~n 90%, Tenetia5% Mor#u Mwm~ey, Vd~hcls, CIF 2,000 Nda Afaledm Air 10% Pa~s __ _C~ Tumtsr 90% SCOT PAPER ag Paperer Otaw CIP 15,000 N~d n Aual Air 1% NO Maedsl Mam.nn 95% Tesiu 4% STANDARD RUT CO. Ilp PinapWbaun POR 4F2,524 No"h Amedi MaM 100% RO (Dele) 30.5% ape69.5% BAND1EO ød M~e Iage 1 aDe~ FOB 615,000 Nouh A~cden Mume 100% NO 45% E9mp55% tu~ Pluh, aod. CIP 7,000 Nodh Ame~ia Mdme 98% NO Asia Air2% COOFIMONTECILLOS Large Meat FOB 6,000 Nodh Anudos Markm 98% Dialog _ Asia Air2% INVERSORA MCOA smau Vgetabes RESULTS OF QUESTIONNAIRE AND INTERVIEWS ARGENTINA HEMICAL PoDUCIS C~aoulDOW > toM HediaA FOR 40 TEUS Nodh Ameda Madmo 100% YES 1 _ 100% FAgenina >10M He«blan-8 C&p 800 TONS Noah Ana Tess 25% ES PO 100% Mad--~ 75% I.adnAmads 25% oAw , >10M daar-c C&P 100 TEUS No~h Amedffa M~un 95% YES 90%, usopa Teada1 5% 5%, Lada -- iAmeda5% BEVERAGES &>1WM Eeb Ar-A FOB 3,000TEUs Latin A~eria M9~ni.. 94% NO CIF Noth Ameda Ten~edal 6% RESULTS OF QUESTIONNAIRE AND INTERVIEWS ARGENTINA _ 1E FRDUCT 3%B VOLUMR ORIGISg_igE Stelkar 1m< TextarA Oa 180 TEUS Nodh Atadea Maddua 80% NO C&p 50%, Bus Air2O% l_ 50% 8an Laoenz 10M4< Cerama-A PO 2,400TEUs Nodh America Madd 90% YES 10%, Eunipe Tersdal 10% 70%, Lade Amedica 10%, Afdka 10% Zanwn 10m < Ceramar- PO 1,000 TEUS Noh Amede~ Maddis 98% NO Latin Amea Tenstna12% ÅdAfa, Asi RESULTS OF QUESTIONNARE AND INTERVIEWS CH" ... - TROUT tME OIM ORIGIN _OD__ g O-RIGM MODE E CHehoCAL PRODUCIS Hoe~cht-Cd1h >1oM HerbiChilA CIF 259,000 L LadaAmed~a Tetria 55% YS USD C&F 55%, Europe Marilime 45% l_ 45% BASF-Chile >1oM HerblCbie-B C&F 480,00 L Latin America Ternmia 6% YES FOB 6%, Buope Marime 94% 94% ByrCIm >lom HlC B CIF imec Ma m% YES 8M~0u~%0 RESINS Pisarreno >1M ResdCh~e-A FOB 1,200 TU Noth Amerca NO C&F ' Africa 30% Wene, SA 1<10 ResOChe-B FOB 3,200 TRUB Latin America Matb~e 20% NO CIF 80%,North Teu~etral 80% C&F America 20% BEVERAGES chaca >1oM BebIChKleA C OF 41 TEUS North America Madtime NO 100% Enge, SA 1«10 BebiChile-B FOB 50 TEUS EN 100% Madtime NO CIF MCh~ndrck y CIa. >1 BebCChile-C IF 10 TRUS EN 100% Madtime NO Anna 3 45 -== 1u- - - i ]it >d ä l g 1 46 Annex 4 COST RICA CUISTOMS.REFORM USAID Analysis and Recommendations (Summary) Principal Problem: functions. Preparation and clarification of Job descriptions and responsibilities, providing Up to 1989: structure for supervision and operational aud.is. Chaotic organization of Customs Houses, Preparation of Manual of Position Descriptions ineffectual administration, lack of standard for consideration and adoption by Civil Service operating procedures, operational structure and to open a technical Customs career category, as functional job descriptions. Low educational a separate chapter in the Civil Service. levels of personnel, poorly trained, unsupervised, low salaries. Preparation of the International Transit Guide, in accordance with the SIECA/UNCTAD initiative Deficient physical infrastructure in all customs of simplification of forms, procedures, and houses, inability to limit public access to controls. workers. Collection of laws, decrees and resolutions Poor services, slow- 8-12 days to clear a non- related to customs functions, for use by the legal controversial entry document, costly additional departments, and for confrontation of conflicting payments proliferation. legislation to propose abrogation. Negligible control over international transport. Preparation of manuals for most of the major functions of the customs process, with the Negligible control over fiscal warehouses. expectation of mechanization of most of the procedures. Little income from auctions of abandoned goods. Design of a prototype software to define the No reliable Import or export data. "architecture* of the system that could be mechanized. No reliable data on taxes collected, or exonerated. Focus of UCOLC Finandng 1991-1993 Focus of Tecimical Assistance 1989-1990 1. Administrative . MY RslsAchlened Finish the series of procedural manuals. Practical organization of the Aduana Establish a modern accounting system at Central. Division into Technical and the customs house level. Administrative Intervene in the administration of the Customs houses, implant supervision and internal controls/operational audits. Simplify documentation. Annex 4 47 2. Collect decisions of Controller and 6. Customs Information System - Procurator. Computerized Development of strategic Collect and categorize resolutions of sub-systems and databases as independent Customs and Finance related to Customs. modules, for posterior integration: Evaluate the Costa Rican and Central American proposed Customs legislation Vehicle entry control and effects on practical operations. Reception of Transportation Units Reception of Inventory from Fiscal 3. Human Resources Warehouses Accounting Coordinate with Civil Service to Values Data Base implement the Position description Tariff for on-line consultation manual for Customs. Duty Calculation Establish a continuing education program for Introductory courses and skills Selection of Software and hardware upgrading for customs officials. modalities. Analysis and prototype design, and 4. Foreign Trade programming and modules for nationalization, accounting, Collect the existing national and transportation, inventories in fiscal International legal backdrop for warehouses, auctions, destructions and international commerce. donations of goods. Determine Costa Rica's practical Interaction with other entities, banks, obligations and operational conditions warehouses, port authorities, brokers, etc. required by its adhesion into GAIT, and analyze the practical impact in view of Design of greater network for the national legal structure and customs consolidation of data, communication functions. network. Propose for legal adaptation of the Creation of users manuals. customs service operations to the harmonized valuation and classification Parallel systems, computerized and system. manual in 3 centers. Define and propose in concert with the Free standing systems. Ministry of Foreign Trade, legal reforms needed to comply with the expectations of Training. a customs service that responds to the needs of international commerce. Initiation of Systems in peripheral customs houses. 5. Infrastructure Define strategic geographical points for customs control stations. Draw up plans, bid for construction of posts, supervise construction. 48 Annex 5 CUSTOMPROCESS AS A RESTRAINT TOTRD (from Mexico: Export Sector Adjustment Loan) 1. An important effort is currently Government's program of customs reform in underway to control better the customs terms of cost reductions to trade are around process and improve efficiency. Customs US$2.3 billion a year, which is around five procedures have been a significant restraint percent of the value of merchandise trade or to trading because they are highly close to one percent of GDP. The estimate centralized and antiquated, involving does not include additional benefits such as numerous, complex, time-consuming and efficiency gains from improved non-transparent steps. While trade reforms competitiveness of the traded sector. have simplified customs requirements, customs procedures clearly had not kept Past and Regulatory Issues pace with trade reforms. Traders faced long processing times and substantial 4. Until recently the Directorate undocumented costs in clearing General of Customs (DGQ, which reported merchandise. Until the reform was initiated directly to the Secretary of Finance and recently, the authorities had effectively lost Public Credit, simultaneously carried out a control of the customs process, and the number of functions: (i) policymaing-i.e., clearance system had become bogged down determining customs operating procedures; in a mire of bureaucracy, ad hocery and (H) supervision of its own activities; (iii) corruption. evaluation of effectiveness of customs operation; and (Wv) responsibility for day-to- 2. The excessive costs of clearing day operations. The Ministry of Trade and customs effectively functions as another Industrial Development (SECOFI) has barrier to trade, and are thus inimical to the traditionaly been in charge of controls on recent liberalization since a well-functioning, foreign trade and coordination of tariffs, transparent customs process will ensure that while the Ministry of Finance and Public the new trade policies are being fully Credit (SHCP) has been responsible for tax implemented. There is also the additional and fee collection and supervision of general benefit of improved collection of trade compliance with legal requirements. In taxes, and indeed the other taxes.1/ practice, the DGC operated substantially in isolation with regard to traded merchandise, 3. Customs reform is part of an and coordination with SECOM and the overhaul of the tax collection. Simplifying remainder of SHCP was limited. and standardizing customs process will foster increased transparency, reduce 5. An enormous amount of discretion of the customs employees, and legislation and ordinances applicable to lessen opportunities for tax evasion. customs, spanning all levels from Articles of Traders will benefit from the reduced costs, the Constitution to Administrative Circulars delays and uncertainties of a standardized, has proliferated over the years. The universally applied, non-negotiable customs previous legislation and operating practice of process. By a conservative estimated, the customs implied that every merchandise readily quantifiable benefits of the transaction had to be inspected individually, and hundreds of regulations applied in each Ame 5 49 case. This was clearly impossible. Thus, customs for the collection of trade taxes and enormous discretion was given to customs listed only about 200 traders, has also been officers, with predictable results and the abolished. Traders are now required to be authorities effectively lost control of the in the Federal Tax Registry, which lists all process. taxpayers, and they use their standard Mexican IRS numbers. This change will 6. Importers and exporters improve collection of all tariff and taxes. typically use the professional services of a The responsibility for computerizing the customs broker to find their way around all de A Customs Sites reStSwith SSI, of the statutory obligations and provisions. which is providing guidance to the Central Customs brokers were generally considered Informatics Units of Customs. Procedures to be major accomplices in irregularities are being implemented whereby electronic involving customs. Entry to the private data is collected from commercial banks and sector profession had been tightly controlled customs agents, cross-checked for by means of licenses. The number of consistency at the decentralized Informatics customs brokers remained roughly constant Units of each customs site and compared at 500 for over a decade. Customs brokers with hard copies of the declaration forms. were permitted by law to charge a two-part fee for their services: one part depended on 8. The new budget law containing the duty-paid value of merchandise plus a the basic legal and institutional changes fixed component for the service, and the pertaining to customs became effective on other part was known as 'complementarios: January 1, 1990. Changes in process are or extras, depending on the additional being formalized through e to the undocumented expenses the broker had to Customs Law. incur to release the merdhandise. This system contained a built-in incentive to 9. The Mexican tax system understate the value of the merchandise and operates on the basis of voluntary increase the undocumented complementario. declaration of tax liability by the taxpayer, and it is at the discretion of SHCP to check for compliance. This will also be the new The New Process and Policies modus g2=di for the collection of trade taxes. The new rights and obligations of 7. In mid-1989, the DOC went traders and customs have been widely from a stand-alone entity reporting directly published to enhance . A basic to the Secretary of Finance to being premise is that individual incorporated into the Undersecretariat of inspection of each transaction is impossible. Revenues (SSI). Legal matters and The intention is to regain control, tailoring monitoring of compliance related to customs insectio to match the capacity of each at the central level were reassigned from customs facility, and to remove discretion DGC to other areas of SSI in August 1989, and negotiability. Operatio will be so that DGC is now exclusively concerned decentralized, linked by an electronic data with improving the physical processing of communication network, and responsibility merchandise through the customs facility. for information collection and monitoring The national registry for importers and will be shifted to the individual customs exporters (onyabu, which was used by sites. O Annex 5 10. Trade transactions are inspected all partie involved, including the loss of to random, and the number of steps in the authorization to operate as brokers, if customs process has been reduced by two irregularities are discovered during the thirds. The previous system for customs inspection. The new system therefore processing contained around £alyg steps, of contains incentives for customs agents to which a involved some sort of ensure that the contents and value of al paperwork. The new system consists traded merchandise are accurately declared. essentially of far steps. The reduction in Even at the pilot stage it was observed that processing time has been a major source of brokers are pro-inspecting some merchandise savings. before completing declarations and calculating tariffs owed. 11. Traders no longer ma payments of tariffs to customs officials but 14. The low saa paid to customs rather to commercial banks which have officials under the public sector salary opened branches inside the customs facility. structure and limited training are principal The commercial banks keep the funds for 48 constraints to implementation of the reform hours before officially placing them in the program. Also, the costs of training ae account of the national treasury, and are very high, the results often uneven. and required to keep computerized records of all training can lead to defections to the transactions. sector where salaries ar much highr The customs reform addresses the salay issue by 12. Entry to the tightly controlled "privatizt* the money collection function customs brokers' profession is being freed to commercial banks, and the primary up and the regulated fee structure will be inspection function to customs brokers. The phased out after a transition period so that reforms have simultaneously reduced th fees will be market determined. Brokers workload of customs employees as well as will be required to present electronic data on the possibility for graft. The Government's a weekly basis containing all information financing requirements to implement the related to their clients's trade activities. customs reforms are primarily in the areas of training and hardware. 13. The random inspection system is - complemented by stiff fines and penalties for pTaxes on internatioal trade we 0.4 percent of GDP in 1988, compared to 1.1 prceat in 1981. Alot the trde tax re fn comes fcom tariffs on ifports Utoe taxes accont for a much smaller percentage of GDP in Mexico an ec many other developg countriesL An=s 51 L J ti 6 11 I I11111 H J f j u 52 Anne 6 TRADE FACILITATION AND TRASPORT STUDY MERICO. TRUC TARIF 1991 PRODUCT ROUTE DITNE COST PER las KM Tkm USC LEATHER Leon - Mex., D.F. 500 7 Leon - N. Laredo 930 3.5 CONSERVES S. Miguel - N.L. 970 2.6 CONSERVES rapuato - Manzanillo 500 15 Irapuato - N.L. 950 4.8 (Rail I - N.L.) 950 1.9 CERAMICS Puebla - Manzaillo 930 6.3 U.S. Coy. Puebla - N. L. 1250 3.9 CERAMICS Puebla - N.L. 1250 3.8 2.Sc before Puebla - Tijuana 3000 2.0 deregulation HIDES N. L. - Leon 930 3.0 Juare - Leon 1330 5.4 HIDES P. Negras - Leon 1110 4.6 TRANSPORT Leon - N.L. 930 4.9 GROUP LOW VALUE N. L. - Monterrey 230 7.5 48t CHEMICALS (Rail) 4.0 Consignments Chicago - N.L. 1200 3.8 (52t) (Rail) 2.8 RESINS Reynosa - Monterrey 230 20.7 U.S. Coy. Pittsburg - Hidalgo 2000 5.5 U.S.A. (Tex.) Annex 6 53 MEXICO TRUCK TRAN RCO CALCULATn 19868 AND mW 1991 1£21 Per Km (updated) Per Km (updated) FUEL 172 258 Insurance 80 560 (1.5x) (x7) OIL/LUB. 7 11 Overheads 24 168 (1.5) (x7) TIRES 118 177 Maint. (Labor) 24 168 (1.5x) (x7) SALARIES 60 (x7)=420 Maint. (Parts) 80 192 ($M7,200,00Yr.) TOTAL 357 886 Total 208 1,088 TOTAL ex Dep. 1974 Dep. 500 Per Tkm Um$ Total ex Dep. 110 0.36 Total Inc. Dep. 137 0.46 Basie Asspions2 a) 1000 km round trip b) Annual km 120, 000 (2 1/2 RT/week). c) Average 18 ton load. d) Exchange rate US$1.0 = SMEX 2,200 (1987) US$3,000 (1991). e) Assume wages increased as IFS. Fuel and tires as international translated to parts as real appreciation of Peso (2.4x). f) Vehicle value 1987 = $M200m plus 10% (real) = SM300m (1990) dep. 5 years = $M60mlyr. PARTICIPACION DE LOS ACENTES EN LA CADERA DE DISTRIBUCION . TEMPORADA 1987/88 (D6tareslcala y porcentajes) Uva Ftame Uva Th~apson Manzana a.,m. Pera Packham KIWI . Rectarin Durazno Ciruela japonesa EE UU EEUU tAurya. Europa Europa EEU EE UU EE UU ......................................................................................................... U $ USI % Us$ Us$ % Us$ % Uss 2 USs % Uss % Precio mayorista 9.58 100.00 14.60 100.00 17.60 100.00 19.50 100.00 10.07 100.00 9.41 100.00 11.30 100.00 8.90 100.00 Margen mayortsta 1.44 15.03 .2.19 15.00 2.60 14.77 2.92 14.97 1.51 15.00 1.40 14.88 1.70 15.04 1.34 15.06 Precio ex-dock recibidor 8.14 84.97 12.41 85.00 15.00 85.23 16.58 85.03 8.56 85.00 8.00 85.02 9.60 84.96 7.56 84.94 Menos: Recibidor 0.65 6.78 1.00 6.85 1.20 6.82 1.33 6.82 0.68 6.75 0.60 6.38 0.77 6.81 0.60 6.74 Puerto destino 0.75 7.83 0.75 5.14 1.70 9.66 1.70 8.72 1.25 12.41 0.75 7.97 0.75 6.64 0.66 7.42 • Raviera 2.25 23.49 2.25 15.41 4.44 25.23 4.44 22.77 1.08 10.72 1.97 20.94 1.97 17.43 1.57 17.64 Seguro 0.06 0.63 ,0.06 0.41 0.06 0.34 0.06 0.31 * 0.06 0.60 0.06 0.64 0.06 0.53 0.06 0.67 Valor Fo Chile 4.43 46.24 8.35 57.19 7.60 43.18 9.15 46.92 5.49 54.52 4.62 49.10 6.05 53.54 4.67 52.47 menos: Exportador 0.35 3.6S 0.67 4.59 0.60 3.41 0.73 3.74 0.43 4.27 0.37 3.93 0.48 4.25 0.37 4.16 Puerto cargue 0.16 1.67 0.16 1.10 0.33 1.88 0.33 1.69 0.06 0.60 0.16 1.70 0.16 1.42 49.14 1.57 Flete terrestre 0.22 2.30 0.2 1.51 0.31 1.76 0.31 1.59 0.08 0.79 0.39 4.14 0.39 3.45 0.22 2.47 Packing y frio 0.79 8.75 0.19 5.41 1.30 7.39 1.39 7.13 0.45 4.47 0.69 7.33 0.69 6.11 0.64 7.19 Material embalaje 0.93 9.71 0.93 6.37 2.15 12.22 2.02 10.36 0.69 6.85 0.81 8.61 0.81 7.17 0.81 9.10 Precio productor 2.45 25.57 5.58 38.22 2.91 16.53 4.37 22.41 3.78- 37.54 2.57 27.31 3.52 31.15 2.86 32.13 menos: Mano obra huerto 0.57 5.95 0.57 3.90 0.34 1.93 0.40 2.05 0.07 0.70 0.36 3.83 0.35 3.10 0.38 4.27 Productos qufmlcos 0.53 5.53 0.53 3.63 0.40 2.27 0.56 2.87 0.16 1.59 0.35 3.72 0.40 3.54 0.34 3.82 Maquinaria 0.40 4.18 0.40 2.74 0.27 1.53 0.50 2.56 0.05 0.50 0.28 2.98 0.25 2.21 0.28 3.15 otros gastos huert 0.15 1.57 0.15 1.03 0.16 0.91 0.15 0.77 0.13 1.29 0.10 .1.06 0.12 1.06 0.10 1.12 Remanente exportact 0.80 8.35 3.93 26.92 1.47 8.35 2.76 14.15 3.37 33.47 1.48 15.73 2.40 21.24 1.76 19.78 Mercado interno 0.50 0.50 0.63. 1.13 0.19 0.65 0.84 0.37 SaLdo final 1.30 3.98 2.10 3.89 3.56 2.13 3.24 2.13 ...................................................... ............ ............... ................ .............. .............. Luge: elaboracion propia. Anner 8 55 UNCTAD/ICC Draft Rules for Multimodal Transport Documents J. Appleablity 1.1. These Rules apply when they are incorporated, in writing or orally, into a contract of carriage by reference to the "UNCTAD/ICC Rules for multimodal transport documents', irrespective of whether there is a unimodal or a multimodal transport contract involving one or several modes of transport or whether a document haz been issued or not. 1.2. Whenever such a reference is made, any derogation from those Rules shall be null and void to the extent that it is in conflict with these Rules, except insolhr as it increases the responsibility or obligation of the multimedal transport operator. 2. Dqfinitions 2.1. Multimodal transport contract (MT contract) means a single contract for the carriage of goods by at least two different modes of transport. 2.2. Multimodal transport operator (MTO) means any person who concludes a multimodal transport contract and assumes responsibility for the performance thcreof as a carrier. 2.3. Carrier means the person who actually performs or undertakes to perform the carriage, or part there1wether he is identical with the multimodal transport operator or not. 2.4. Consignor means the person who concludes the multimodal transport contract with the multimodal transport operator. 2.5. Consignee means the person entitled to receive the goods from the multimodal transport operator. 26. Multimodal transport document (MT document) means a document evidencing a multimodal transport contract and which can be replaced by electronic data interchange messages insofar as permitted by applicable law and be (a) issued in a negotiable form or, (b) issued in a non-negotiable form indicating a named consignce. 2.7. TIn in cage means that the goods have been handed over to and accepted for carriage by the MTO. 2.8. Delivery means (a) the handing over of the goods to the consignee. or (b) . the placin; of the goods at the disposal of the consignee in accordance with the MT con- tract or with the law or usage of the particular trade applicable at the place of delivery, or (c) the handing over of the goods to an authority or other third party to whom, pursuant to the law or regulations applicable at the place or delivery. the goods must be handed over. 2.9. ecial Drang Right (SDR) means the unit or account as defined by the International Monetary Fund 56 Anne 8 2.10. giods means any property including live animals as well as containers, palets or similar articles of transot or packaging not supplied by the MTO. irrespective of whether such property is to be or Is carried an or under deck. 3. Evidendary qffed of the information contained in the multimodal transport document The information in the MT docionent shall be prima fifee evidence of the taking in charge by the MTO of the goods as described by such information unless a contrary indication, such as 'shipper's weight, load and count", 'shipper-packed container or similar expressions, has been made in the printed text or superimposed on the document. Proof to the contrary shall not be admissible when the MT document has been transferred, or the equivalent eloctronic data interchange message has been transmitted to and acknowledged by the consignee who in good faith has relied and acted thereon. 4. Respondhiffhes of the muldtinodal transport operator 4.1. Period of responsibilitv The responsibility of the MTO for the goods under these Rules covers the period from the time the MTO takes the goods in his charge to the time of ther delivery. 4.2. The liability of the MTO for his servants, agents and other persons The multimodal transport operator shall be responsible for the acts and omissions of his servants or agents, when any such servant or agent is acting within the scope of his employment, or of any other person of whose services he makes use for the perforaince of the contract, as if such acts and omis- sions were his own. 4.3. Delivery of the goods to the consianec The MTO undertakes to perform or to procure the performancc of all acts necessary to ensure delivery of the goods: (a) when the MT doctonent has been issued in a negotiable form "to' bearer, to the person surrendering one original of the document, or (b) when the MT doclonent has been issued in a negotiable form "to order, to the person surrendering one original of the document duly endorsed, or (c) when the MT docivnent has been issued in a negotiable form to a named perso; to that person upon proof of his laentity. and surrender of one original document; if such document has been transfored "to order or in blank the provisions of(b) above apply, or (d) when the MT doauent has bcen issued in a non-negotiable form, to the person named as co.signee in the document upon proof of his identity, or (e) when no document has been issued, to a person as instructed by the consignor, or by a * person who has acquired the consignor's or the consignee's rights under the MT contract to give such instructions. S. Liabity of Ose arddmodal transport operator 5.1. Basis of Liability Subject to !he defences set forth in Rule 5.4 and Rule 5.6. the MTO shall be liable for loss of or damage to the goods, as well as for delay in delivery, if the occurrence which caused the loss, damage or delay in delivery took place;while the goods were in his charge as defined in Rule 3.1., unless the MTO proves that no fault or neglect of his own, his servants or agents or any other person raferred to in Rule 3.2. has caused or contributed to the loss, damage or delay in delivery. However, the MTO shall not be Annex 857 liable for los following flom delay in delivery unless the consignor has made a declaration of interest in timely delivery which has been accepted by the MTO. 5.2. Delay in delivery Delay in delivery occurs when the goods have not been delivered within the time expressly agreed upon or, in the absence of such agreement, within the time which it would be reasonable to require of a diligent MTO, having regard to the circumstances of the case. 5.3. Conversion of delay Into final loss If the goods have not been delivered within ninety consecutive days following the date of delivery de- termined according to Rule 5.2., the claimant may, in the absence of evidence to the contrary, treat the goods as lost. 5.4. Defences for carriame by sea or inland waterways Notwithstanding the provisions of Rule S.1. the MTO shall not be responsible for loss, damage or delay in delivery with respect to goods carried by sea or inland waterways when such loss, damage or delay during such carriage has been caused by* * act, neglect, or default of the master, mariner, pilot or the servants of the carrier in the navi- gation or in the management of the ship, * fire, unless caused by the actual fault or privity or the carrier, however, always provided that whenever loss or damage has resulted from unseaworthiness of the ship, the MTO can prove that due diligence has been cxcruised to make the ship seaworthy at the com- mencement of the voyage. 5.5. Assessment of compensation 5.5.1. Assessment of compensation for loss of or damage to the goods shall be made by reference to the value of such goods at the place and time they are delivered to the consignee or at the place and time when, in accordance with the MT contract, they should have been so delivered. 5.5.2. The value of the goods shall be determined according to the current commodity exchange price or, if there is no such price, according to the current market price or, if there is no commodity exchange price or current market.price, by refetence.to the normal value of goods of the same kind and quality. 6. Limitation of &abihty of the multhnodal transport operator 6.1. Unless the nature and value of the goods have been declared by the consignor before the goods have been taken in charge by the MTO and inserted 'n the MT doc~en,the MTO shall in no event be or become liable for any loss of or damage to the goods in an amount exceeding the equivalent of 666.67 SDR per package or unit or 2 SDR per kilo of gross weight of the goods lost or damaged, whichever is the higher. 6.2. Where a container, pallet or similar article of transport is used to consolidate goods, the packages or other shipping units enumerated in the AtT denwent as packed in such article of transport are deemed packages or shipping units. Except as aforesaid. such article of transport shall be considered the package or unit. 6.3. Notwithstanding the.above-montioned provisions. if the multimodal transport does not, according to the coniiact, include carriage of goods by sea or by inland waterways, the liability of the MTO shall be limited to an amount not execeding 8.33 SDR per kilo of gross weight of the goods lost or damaged. 6.4. When the loss of or damage to the goods occurred during one particular stage of the multimodal transport, in respect of which an applicable international convention or mandatory national law would have provided another limit of liability f a separate contract of carriage had been made for that par- ticular stage of transport, then the limit of the MTO's liability for such loss or damage shall be deter- 58 Annex 8 mined by reference to the provisions of such convention or mandatory national law. 6.5. If the MTO is liable in respect of loss following from delay in delivery, or consequential loss or damage other than loss of or damage to the goods, the liability of the MTO shall be limited to an amount not exceeding the equivalent of the freight under the MT contract for the multimodal trans- port. 6.6. The aggregate liability of the MTO shall not exceed the limits ofliability for total loss of the goods. 7. Loss of the right of de maltbnodal transport opcrator to limit iability The MTO is not entitled to the benefit of the limitation of liability if it is proved that the loss, damage or delay in delivery resulted from a personal act or omission of the MTO done with the intent to cause such loss, damage or delay, or recklessly and with knowledge that such loss, damage or delay would probably result. 8. Liability of the consignor 8.1. The consignor shall be deemed to have guaranteed to the MTO the accuracy, at the time the goods were taken in charge by the MTO, of all particulars relating to the general nature of the goods, their marks, number, weight, volume and quantity and, if applicable, to the dangerous character of the goods, as Iurnished by him or on his behalf for insertion in the MTdoctanent. 8.2. The consignor shall indemnify the MTO against.any loss resulting from inaccuracies in or inade- quacies of the particulars referred to above. 8.3. The consignor shall remain liable even if the AfT dorunen has been transferred by him. 8.4. The right of the MTO to such indemnity shall in no way limit his liability under the MT contract to any person other than the consignor. 9. Notice of loss of or damage to the goods 9.1. Unless notice of loss of or damage to the goods. specifying the general nature of such loss or damage, is given in writing by the consignee to the ITO when the goods are handed over to the con- signee, such handing over is primafacle cridence of the delivery by the MTO of the goods as described in the MT docwnent. 9.2. Where the loss or damage is not apparent, the same psimafade c(rct shall apply if notice in writing is not given within 6 consecutive days after the day when the goods were handed over, the consignee. 10. Thne-bar The MTO shall, unless otherwise expressly agreed. be discharged of all liability under these Rules unless suit is brought within 9 months after the delivery of the goods, or the date when the goods should have been delivered, or the date when in accordance with Rule 5.3, failure to deliver the goods would give the consignee the right to treat the goods as lost. II. Appicability of the rules to actions in tort These Rules apply to all claims against the MTO relating to the performance of the MT contract, whether the claim be founded in contract or in tort. Annex 8 59 12. Applicability of the rules to the mulntimodal transport operatoes servants, agents and other persons employed by idm These Rules apply whenever claims relating to the pcrrormance of the MT contract are made against any servant, agent or other person whose services the MTO has used in order to perform the MT contract, whether such claims arc founded in contract or in tort, and the aggregate liability of the MTO of such servants, agents or other persons shall not exceed the limits in Rule 6. 13. Mandatory law These Rules shall only take effect to the extent that they are not contrary to the mandatory provisions of international conventions or national law applicabic to the MT contract. UNI/DIFACT MESSAGES ST$A 8menkimg ßervice Message 0 1 IIESAESWSTAU PG MAPLIE ayplansIDeeupied and Emsty L cations msage 1 2 APKTE * yplan Total Nues Hmsage 1 3 IVOXC OUIM - Involem Hommage 2 41 CatP Cali In essage 0 neIN"3 PT InE~ntory Report 9 42 CoA Cent*e Arrivel Nes~ ORDERS UN - Purhae Order nes"age 2 43 COMEPA Container »epar#ur esso 5 ORbo Purchae Order Chng e sso 1 43 CONDPV Constretion - Direct Paent Valuation 0 6 ~$8P Pmr*hase Order Re~onSe &&ossago 1 44 COMST Construtien - Ectabliskment of Contrt 0 PARTIO Party Inforwation «msage COIXT Cntr»ctien - Invitation to Tende S (Tradine partner profile data) 1 45 COPVA Comstiruction - PQynent Valuation S 9 PALST Passenger list 0eqeage 0 46 COUA Constructlon - Qumntity Voluation 0 10 * PAYMUC Payrell beductieni Advice omsaee 0 47 COTI Construction - Tender - 11 PAYEXT UfSM U E-tended Pyent Order ho*aes 2 40 Cmt Control nasmage PAYMNL multiple P#yment Order messeo - 0 49 (AmknouledgeentReiehtin Advice essagel 1 12 PAVORh MMsN - Pay»ent Order Nssage 2 49 COMLA Container Overlanded tssage 0 33 PRICAT Prico/naleb Catelegue omage 1 50 COPMEN Container Predoparture with Guldeline Nssage 0 14 QALITY . Ou elity Date hassage. 1 51 CP~AR Container Praarrival Nessoge 0 14 0TE3. uo mage 1 52 COPOP Container Prodoporture $tesage 0 15 REINAC ReInserance Account Hsage 0 53 Ces~LA Container Short1nded nommage 0 15 REWA0V UNSKM R"nitimein Advlce oNssmae 55 C#EA~ mUm - Credit Adef nemssmge 2 ad REQ0E Remst Ver Quott Hommiaee 1 56 C%EE£ UI • Ektended Credit Adwice massage 2 16 ESG geservation msage 0 56 CURRAC • Current Accoent Homsage 0 al 5SUPT Sales Data Repart NOae 0 57 CUSCA MUsN - Cutoms Carge eport ossage 2 18 STATAC Statenent of Account Hmmage 1 5 COMPEC MM15H - Cuastms Peelorotion HMage 2 19 UPcOT Swpersnnmetion ontributions Advice toe*ee 0 5 COSEXP Custmw tErs Conignent Declarstion nessage 0 20 SUPNA Suwpernnuation intonance mossage 0 59 CUSEP OSN - Customs Repert nassage 2 2 - WRES Supolier Respanse CUS U~sis - Customs 8espons Hosage - 2 22 (Rteervatien R*sp»sa tesag» ) 0 60 #E0w - Ochit Advic* moempgm 2 22 VESDEP Vessel Departure Kg*mage 0 d0 aELFOR Dolivery Schedel. Hossage 1 23 OELJIT ,ust In Time Delivery m*age 1 21 FRtEMORKS .. . .P~AT PE ot~A0V oeptels Advic* nos*age 1 24 n18Es Direct NabIt homage 0 25 IPTNFR LSl - International Fbruerdin4 and Transpert Hmmage 2 61 §IMEF UWO/EDIFACT Directory Dofinition 0 26 00CAUW lesbentary Credit Advice 0 27 ~ eueary credit Appliestihn %Sage 1 27 TATU$& 0 * prof t Vocument. 1 D Srft Recommendation. 2 a Reeoamndation OCIUP becumentary Credit Iasuance Information 0 2 - OENPAL General P p~e ommage 0 20 cel~tE ~eneI Staustieft Message 0 29 1VCSUK Feouering ond Coselidation. Sumary emage 1 30 IP~tAN UMmH - Arrival Notie Mssage 2. 33 Tetalst 35 massams at Status 0 Ir~HNC UM - B~klng Cenfirmation no~mage 2 34 o6 Hossages et Status 1 ItIF UMi firm Beking nossaen 2 s$ Ie messages at Status 2 iFTItr OMS5H Provisional bsking Hossage 2 37 1 Pranewerk at:States 2 IFlmS. UN - Instructien Contract Status mommage 2 3S •••.•••.••••••••. ••••• urmtsm UWAM - Instruction Zisae .P 39 T7 NsagsFeaeek ITA lateonmtinl Naltisoda3 States omert #opa~ 0 41 MAJOR DOCUMENTS PREPARED TO SUPPORT EXPORT/IMPORT OF CARGO 101MME ,4PACUS T1 tMLPL :- ,1 O . IIE IM)GismiCHARGE s E oi Mr^~ Ch No. 20: Getting Beyond the "National Institute Model" for Agricultural Research In Latin America: A Cross-Country Study of Brazil, Chile, Colombia and Mexico, LATAG, August 1992. No. 21: From Platitudes to Practice: Targeting in Latin America, LATHR, Forthcoming. No. 22: Horizontal and Vertical Restructuring of State-Owned Monopolies, LATTP, Forthcoming. No. 23: Housing Delivery System and the Urban Poor: A Comparison Among Six Latin American Countries, LATIE, Forthcoming. No. 24: Gaining Momentum: Economywide and Agricultural Reform in Latin America, LATAG, Forthcoming. Other Reports In the Series No. 1: World Bank Strategy for the Naturml Gas Sector in LAC, LATIE, March 1991 No. 2: Women in Development: Issues for the Latin American and Caribbean Region, LATHR, April 1991 No. 3: Easing the Poor Through Economic Crisis and Adjustment: The Story of Bolivia's Emergency Social Fund, LATHR, May 1991 No. 4: Direct Credit for Privatized Firms, LATTP, June 1991 No. 5: Decentralization to Local Government in LAC: National Strategies and Local Response in Planning, Spending and Management, LATIE, July 1991 No. 6: Mexico Labor Retraining Program: Poverty Alleviation and Contribution to Growth, LATHR, August 1991 No. 7: The Evolution, Situation, and Prospects of the Electric Power Sector in the Latin American and Caribbean Countries, LATIE, August 1991 No. 8: Choice of Nutritional Status Indicators for Young Children in Public Health Programs, September LATHR, 1991 No. 9: Developing Educational Assessment Systems in Latin America, LATHR, September 1991 No. 10: Women's Employment & Pay in Latin America, LATHR, October 1991 Part I: Overview and Methodology; Part II: Country Case Studies No. 11: Feeding Latin America's Children: An Analytical Survey of Food Programs, LATHR, November 1991. No. 12: Incentive Structure & Resolution of Financial Institution Distress: Latin American Experience, LATTP, November 1991. No. 13: Tax Administration in Latin America, LATPS, January 1992. No. 14: Public Policies and Deforestation: A Case Study of Costa Rica, LATEN, February 1992 No. 15: Auctioning Credit: Vol. 1: Conceptual Issues; Vol. II: The Case of Chile; Vol. III: The Case of Bolivia, LATTP, January 1992. No. 16: Economic Policies and Performance under Alternative Trade Regimes: Latin America During the 80s, LATTP, April 1992. No. 17: Infrastructure Maintenance in LAC: The Costs of Neglect and Options for Improvement, Volumes 1-5, LATIE, June 1992. No. 18: Private Financing of Higher Education in Latin America and the Caribbean, LATHR, July 1992. No. 19: Protecting Amerindian Lands: A Review of World Bank Experience with Indigenous Land Regularization Programs in Lowland South America, LATEN, July 1992.