Companies in the region are expected to benefit in terms of cost reduction, time savings and added security in the overland movement of goods within six countries in Southeast Asia with the recent launch of the ASEAN Customs Transit System (ACTS) as part of the economic bloc’s move to harmonize trade in the region.

As part of the implementation of the single cross-border transit system which officially went live on November 2, six members of ASEAN which are connected by land borders – Cambodia, Laos, Malaysia, Singapore, Thailand and Vietnam – have joined efforts with Myanmar, which is set to onboard next year. Archipelagic member countries Indonesia and the Philippines, plus Brunei, are also standing ready to act as soon as more provisions covering sea transport is rolled out. 

“The implementation of the ASEAN Customs Transit System plays a vital role in facilitating seamless movement of goods in the region. The system would be an excellent tool in enhancing ASEAN’s trade and production networks as well as establishing a more unified market for its firms and consumers,” said Jock Hoi Lim, ASEAN secretary-general, told an online launch event on November 30. 

ASEAN countries are committed to trade facilitation under the ASEAN Economic Community (AEC) Blueprint 2025, which outlined the goal of member-states to reduce trade transaction cost in the region by 10% in three years from 2017 and to double-intra ASEAN trade by 2025. 

Lim noted that this can be accomplished through the seamless movement of goods within ASEAN. 

Single guarantee from point of departure

“The implementation of ACTS plays a vital role in facilitating seamless movement of goods by enhancing transit procedures using a single, electronic customs declaration,” Lim explained, noting that it will simplify the movement of goods across the region, making transport more efficient and cost-effective. 

Under ACTS, a private sector shipper can make a single customs transit declaration that covers the transport of goods across multiple ASEAN countries, without the need to make repeated customs declarations or changing vehicles at each border. 

Faster customs clearance at borders would then help accelerate transit movements, and reduce the time and expense of carrying out regional trade in goods, to the benefit of producers and consumers across the continental ASEAN region.

For the pilot phase, there’s a limit of 500 trucks to be used by each member-state, although Sophal Kong, chair of the Transport Facilitation Working Group and deputy director general, said this should be increased to maximize the benefits of the system.

“For the current live operational phase of ACTS, this limit is far too low for ACTS to make a significant impact on ASEAN economic integration,” he said during the online launch. 

“There should be a much higher limit, of at least 10,000 trucks per participating member state, or, ideally, no limit at all,” he added.

The first successful ACTS transit took place October 23-24, with a truck travelling from Singapore via Malaysia to Thailand, after trials began in January this year.

US$150-US$200 savings at each border

Freight forwarders in the region welcomed the implementation of ACTS.

“We are excited to have the ASEAN Customs Transit System in place,” said Yukki Nugrahawan, chair of the ASEAN Federation of Forwarders Associations.

“The freight forwarding community will be one of the main beneficiaries of this system as it offers simplified customs and transport control procedures between different ASEAN member states, and provides predictability on door-to-door delivery times and, most importantly, reduced transport costs. The ACTS will significantly accelerate transit movements across the region and help us reduce time and expenses of carrying out cross-border trade in ASEAN,” he added. 

Bruno Selmoni, head of road freight and multimodal, ASEAN & South Asia, at DHL Global Forwarding Management (Asia Pacific), said ACTS will “drive simplification and reduction of business costs.”

“This is because of the regional agreement of all ASEAN member states to the simplified customs and transport procedures for the movement of goods under the ACTS transit environment, departure, transit and destination, and the installation of a robust, reliable and effective automated management system,” he said during the online launch. 

Zaily Ayub, senior assistant director of customs at Royal Malaysian Customs, noted that since traders will not need to change trucks at the transit border, this “will save between US$150 to US$200 at each border.”

“There is also a saving in that customs declarations are not required at transit borders, so this saves agent costs, which are different in each country. The faster clearance will save time and money, and make the use of trucks more efficient,” Ayub added. 

EU-supported system

The ACTS initiative is managed by a permanent team based in the ASEAN Secretariat in Jakarta. It received technical support from the European Union aside from a grant of €10 million since 2012, in addition to the €5 million invested by its ASEAN partners.

“ACTS is a remarkable achievement that is testament to the strong, dynamic and long-standing partnership between ASEAN and the European Union,” said Koen Doens, director general for International Cooperation and Development at the European Commission. “ACTS will make the movement of goods by road quicker and easier across the borders of the participating ASEAN Member States, thereby reducing costs for businesses and citizens.”

Paul Mandl, team leader at the ASEAN Regional Integration Support from the European Union Plus (ARISE Plus) programme, noted that the ongoing coronavirus crisis has prompted the logistics sector to rethink global supply chains, now with more emphasis on regionalization – which stands to benefit from ACTS.

“ACTS can bring about part of the shift I think we will see in the longer term of regional supply chains, facilitating the movement of goods manufactured in ASEAN for other ASEAN markets,” he said.

By Charlee C. Delavin

Asia Cargo News | Hong Kong