1/14/2018 Logistics Transformation: E-Commerce and Implications on - - PDF document

1/14/2018 1 Logistics Transformation: E-Commerce and Implications on Trade Facilitation

Shiumei Lin – Vice President, Public Affairs, UPS Asia Pacific Region World Bank,16 Jan 2018

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The Changing Faces of Logistics Services

Implications on Border Clearance, Services, Competition Policy, Talent, Data Protection, Sustainability

2 1907 2017

Courier, package sorter, air carrier Driver, hub operator, international express delivery, Customs Broker Third Party warehouse

• perator, technician,

engineer Consultant, application provider, locker service Algorithm provider, drone

• perator, sustainable city

courier

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Implications on Border Clearance

Growth in E-Commerce (B2C) Trade

 Web sales in Asia a $816 billion market and growing two times faster than global web sales. (2015)  China: 460 million online shoppers; $750 billion in sales; $1.7 trillion by 2020. (Goldman Sachs, 2017)  South East Asia: 230 million digital consumers, up 50% in last year; e-Commerce is a $15 billion e-Commerce market (Bain, 2017)

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Implications on Border Clearance

 Performance Challenges: Surge in low-value volume / Customs Manpower Shortages  Erosion of De Minimis - Importance of VAT/GST to Revenue Base: New Competition For Domestic Retailers from Potential Advantages in Taxation  Deteriorating Trade Compliance Levels: New players in international trade, inexperienced traders, low understanding of rules of trade, VAT/GST tax evasion  Changing Risk Profiles: Increased

• pportunities for illicit trade, and security

threats.  Loophole “Solutions”: Inconsistency across modes of transport and enforcement (express, post, B2B2C, personal couriers)

New Challenges for Border Agencies

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Implications on Border Clearance

Responses Leading to New Complexities in Trade

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Additional Screening X-ray of all imports, submission of image scans, additional inspection, special facilities. Quotas on D/T Free Shopping No more waiver of duties and taxes for frequent shoppers, even if within de minimis threshold, with caps on number of shipments per month/year. Additional Paperwork / Data Requested Power of attorney, IDs, data Special Channels Special platform / clearance channels for specific goods. Duty and tax preferences or non- preferences. Commercial Presence

Registration or mandatory commercial presence for tax purposes

Other Calibrations Personal shipments vs. Commercial shipments, Weight Restrictions, Special duty rates

Implications on Border Clearance

Emerging Solutions

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Value-Based Simplification & Targeted Solutions Low Value Program + Trusted Trader Program

Trade Facilitation

• Simplification Program for <SDR 1000

shipments based on WCO Immediate Release Guidelines Risk Management Using Data

• Data-based intelligence and risk

management

• Trusted trader certification program for e-

Commerce retailers

• Enhancing postal compliance and

closing loopholes Capacity Building

• Capacity building for e-Commerce

retailers

• Marketplace educational efforts

Collaboration with Operators

• Smart tax collection
• Shared intelligence, data, and Controlled

deliveries

Global e-Commerce Network & Clearance Channel E-World Trade Platform (eWTP)

Global Network

• Governments to join eWTP.

Malaysia is first example. Trade Facilitation

• A separate clearance channel

for registered e-commerce transactions.

• China’s GAC 26 channel is

example. Enhanced Data Visibility

• Registration and data from

seller, payment, logistics, and buyer for risk management purposes. Business Model

• Domestic fulfillment model

(Bonded Warehouse) preferred.

Emerging Technologies Others

Trade Facilitation & Enhanced Data Visibility

• Global Data Standards (bar-

code technology) to improve supply chain integrity

• Block-chain distributed ledger

technology for process improvement and data visibility

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Thank you

Shiumei Lin Vice President, Public Affairs UPS Asia Pacific Region lshiumei@ups.com