Crossing Lines – The Real Work of Seamless Trade in Africa

0:06
Welcome to another episode of the Unitrans podcast. Today, we want to discuss cross-border logistics and the realities behind moving goods seamlessly across African borders. While regional trade is often discussed in high level terms, the real work happens on the ground at borders, corridors and custom points.

0:26
Joining us in the discussion is Unitrans Customs Manager, Hugo Nieuwenhuizen, and Juanita Maree, who is the CEO of the South African Association of Freight Forwarding, better known as SAAFF. Please share a bit about yourselves and your experience across cross-border operations. We look forward to discussing collaboration, compliance and practical problem solving as foundations for more consistent and reliable cross-border operations.

0:53
My name is Hugo Nieuwenhuizen. I’m a Customs Manager for Unitrans. I started my career at customs in 1983. I worked for SARS Customs for 12 years and then I joined a Freight Forwarding company. I think I started in Micor shipping and then after that I just progressed through the freight forwarding industry as a customs manager. I worked myself up because that’s what I love. That’s what I did for the 12 years and I’m still in it.

1:33
My career started after university. I was doing my cost management accounting and then I did my honours degree in cost management accounting. I started working for an import company that was doing in those years control valves. I would think my mom and dad didn’t know my engineering side and I enjoy the control valves quite a lot. The owner decided after probably 10 years that he’s going to give the company up. But in that time, I was actually working quite a lot with Finland because we were doing the control valves from Finland. That’s probably where my love started for the supply chain and how you stitch the supply chain together. Then in 2011, I decided, well, I’m going to embark on a PhD.

2:21
And my PhD was specifically on risk management and believe it or not, in customs environment and how you need to do a scientific risk profiling to detect the high and the low and medium risk. I finished and received my PhD in COVID and in 2021 I started as CEO of SAAFF. That’s currently my journey and I must say, I’m probably a supply chain activist.

2:49
If we look at cross-border trade, we know it’s central to regional connectivity. What are the biggest practical challenges operators face when moving goods across borders today?

3:00
There’s different factors that’s hampering cross-border movement. You can start with the producers itself and they need to be registered with customs to be an exporter. The transporters, they also need to be registered with customs as transporters of goods or transport of goods in bond. And then you also need to use clearing agent to actually do the paperwork for you. But there’s various other factors as well that hampers cross-border movement like different government institutions. You get customs, you’ve got to register with them, you’ve got port health, state vet and ITAC for import export permits. Then you’ve got DAFF if it’s livestock, meat or produce that you need to move across the borders. There’s a whole lot of factors that got an influence on the cross-border movement of cargo.

4:14
Then you look at the border post itself. There they need to be geared up for that. And if they’re not, then there’s a delay in the movement of the cargo.

4:25
You get your logistics layer, which we can say it’s the bottom. Then you get a transaction layer that sits on top of the logistics layer. Then you get the entity layer – who’s involved in a supply chain? Then the government are looking with a see through glass to see, do they comply with the different regulations?

4:45
And when you look at cross-border, it is all about risk management. So it’s about compliance. Do you pay the right taxes? Do you export goods that’s safe and secure from the citizens? And I think what we found in Africa is that all those policies are not coherent and each country have its sovereign authority and that’s why they don’t let the supply chain to flow. It’s really difficult for the operators in the supply chain to handle all these obstacles because it is not a cohesive landscape.

5:20
Hopefully, with the geopolitical environment that’s changing, we will get a focus into Africa to make sure that we can remove the waste and the friction. You can think for yourself: It’s a logistics layer, as Hugo was saying, the transaction layer, and then you’ve got the entity and it’s not talking at the same time to each other in the same language, you’ve got a lot of friction and waste in the supply chain.

5:44
So that’s where the challenges come in. We know that border delays, documents requirements and process variability are common challenges. But where do these issues most often arise in practise?

5:57
If you look at the documentation part of it, it normally starts with the exporter. He’s got to do invoicing that conforms to the standards that customs set, and the packing list, because on the grounds of that documentation, you need to do your customs SAB500 to export document or import. This also depends on what countries it is going to up in Africa, which are part of SADEC or part of SACU. There is also SADEC certificates that’s required for that.

6:37
And it all depends where that documentation is done and how it’s done and how many errors on there that also have a role to play in the delays of public cross-border.

6:49
Maybe if I can compliment and just add an example: the N4-corridor is very close to us because we export to Mozambique. So that’s very much an export country. If you look for South Africa, we have the mums and the pops, this to the consumer goods, but mainly it’s a middle export corridor. We want the export to move as quick as possible. We didn’t perceive any risks that we just wanted to move.

7:17
But Mozambique probably don’t have that same because they are not sure that we use using it to arrive at the borders to be loaded. Also where the problem comes in with cross-border, is that normally it needs to adhere to a schedule. It’s either a ocean ship vessel or a production schedule.

7:36
Many people will ask us why we’d rather go to other parts of the world than instead of South Africa because it is we can supply and we are the gateway, but it becomes problematic to go through all the border posts. Instead you have your ocean modality that would come into Dar es Salaam or Walvis Bay or Maputo and then we lose out. I think it’s something that we, as South Africa, want to make sure that there’s a fluid ratio and we remove this waste. And as Hugo was saying, people can make a mistake in the documentation and then your truck standing in the queue.

8:17
So things can get quite interesting very quickly, very complex, very quickly.

8:22
And then there is still: If you look again at the N4 corridor, we move 1800 vehicles on that corridor. If you have one trailer or somebody in the queue that don’t adhere to the protocols, you have a challenge because it holds up in the queue.

8:38
When you cross-border on the vehicle, obviously you need to do a road manifest. On the road manifest is the truck and the trailer’s details, the driver’s passport number. If any of those digits are incorrect, customs won’t let it go through, you have to do a voucher of correction and the truck stands. Because the truck stands, the queue can’t move. So, that’s where the delays at the border post also come in.

9:05
But we see things are changing. There’s now more digitisation that’s happening. We know that digital tools and streamline processes are now becoming part of the cross-border operations. At a practical level though, where do you see technology helping to reduce those delays to improve predictability without needing a major overhaul at the same time?

9:24
I would think if you look at supply chain, it’s demand and supply. The demand is that people want to use that corridor. Then the supply is: what do we have? We have customs, we have other government agencies, we’ve got 17 of them. They need to make sure that the cargo complied, that there’s no risk. Then you’ve got number plate recognition. The demand and supply must be like a handshake.

9:46
The moment you’ve got more demand, trucks going through the corridor and you have limited resources to look at the risk that can’t process, maybe the number plate recognition is not working, you create a bottleneck. And then that is when you create a bottleneck, it just pushes all the cargo back. That’s why you have these massive queues that is then starting. If you don’t have a quick enough escalation protocol, you can have humanitarian problems because the driver is sitting too long in the truck and there is nobody to look after it.

10:18
That’s where we believe with your digitalisation can help us quite a lot, because with this digitalisation, you know how many trucks is on its way to the border, you can capacitate the border enough to handle the flow and then you can go through. I think that the coordination AI will give us. But now we need to make sure that we have an escalation and communication protocol that we can quickly ensure that the border post can work effectively.

10:47
I think that is where the biggest challenge will come, that we synchronise all those different activities along the way.

10:55
Customs has jacked up the system because what they’ve done is you’ve got to preclear at the border post and by preclearing the shipments, that information will also go across the border to the other customs agents. If you preclear, they give you a removal to notification to the border, proceed to border. The moment that they give you that notification, then only can the truck move to the border.

11:25
There are some of the transporters that don’t do that. They don’t use inland agents; they use border agents. By the time the truck arrives there, it’ll stand until the paperwork is done. While the truck is standing, it’s holding up the rest of the queue.

11:40
Relationships obviously make a huge difference in this kind of scenario. But how important are those relationships when it comes to collaboration between operators, authorities and partners to smoothen out that process? How important would you say the relationship is?

11:55
I think it’s critical. For an example, if we export out of Durban, you take your cargo to the stack, you hand it over to Transnet, Transnet loads it on the vessel. It departs.

12:09
The moment when you look at the land border, it’s a juxtaposed post model. It is South Africa private sector is there, they work with SARS, they work with other government agencies and then they work with their counter partners, which is there in Mozambique, which is customs and other government agencies and then you’ve got the private sector.

12:27
I would think maybe in the world, the most collaboration model is cross-border movement because you need to get everyone in the room to understand. You will see in South Africa, it’s very much the drive that our export clearance becomes Mozambique import clearance, because then you know, the documentation is not tampered with.

12:47
But the next step is our customs export documentation digitalised, must be transported to Mozambique digitalised and it must be real time. The World Bank is involved to help build that. Because if we, in Africa, get it right, I can tell you the sky is the limit because then we can start moving cargo. You have a quick turnaround time. You don’t have waste friction. It would be a pleasure but unfortunately other and we don’t say that but the criminals also know their luck stops. So that is the reality in our world.

13:23
The other problem then is also that South Africa uses 1 system and most of Africa uses the ASYCUDA system. There is an interface between SARS system and ASYCUDA. That’s why Juanita was saying, the moment I press the button on this side, the partners on the other side will also receive the same information.

13:43
So we see that coordination is quite important in this situation. When it comes to cross-border logistics, what practises would you say, help maintain that alignment when it comes to several countries or agencies that are involved?

13:56
South Africa belongs to the World Customs Organisation. It’s about 189 countries in the world and they talk about a World Customs Organisation data model. They describe what all the data models are, what must be in suppliers’ invoice, what must be the customs declaration and that data model, if all the countries subscribe to the data model, then they can do data exchange and they do have it in the WCO as well. They call it customs-to-customs billet where they can share information and then they have a customs-to-business and a customs-to-other government agency.

14:31
South Africa is quite in the forefront with that, but for that to work, all the countries must be on the same level. And I think that’s going to take some time. If you look at the European Union, they’re all on the same level and they do those interfaces seamlessly. But I think in Africa it’s going to take some time.

14:50
Well, if you look at the East African Community, they have already a lot of data sharing between them, Tanzania and Burundi where they share information. But I think once we catch up in the southern region of Africa, it’s going to go quite quick because there is nothing really that could stop us to interface.

15:11
You see the World Customs Organisation also started the AEO programme, approved economic operators. That is not just country based, it’s world based. And if you enjoy that accreditation, then you align with other companies overseas and in Africa, which has the same accreditation. So, you actually become an extension to the customs authority. It all handles around compliance.

15:45
It was coming from Sweden, where they said there’s too many transactions for the customs to control. It’s impossible. So, then they decided to have a trusted trader programme – I trust you and because I trust you, I’ll give you some benefits. I think it’s what I explained earlier, the logistics layer transaction, that entity layer, they want to put into that entity layer that element of trust. And if I trust you and you can see our profession is very much on that, you’re a trusted trader and you pay your taxes and you comply. And because you do that, I’m going to give you some benefits. It seems that this ethos in the logistics environment will bring us a lot of credibility and to help us to move the cargo quite quick.

16:32
Now, on the people side of things, what role do people play on the ground when it comes to resolving issues quickly and keeping supply chains moving despite all these complexities that you’re discussing with us now?

16:44
You know, there is pros and cons to that, like everywhere. People on the ground at the moment at the border post, they are supposed to act as problem solvers, but you know, they’re not really doing a very good job of it. If you have a shipment that’s detained, obviously it needs to be inspected by people. If they do find a real problem on it, they will push it one side and they will carry on trying to get the rest of the trucks that don’t have a problem sorted out. But your problem still stands there.

17:27
This is what Juanita said earlier, then the humanitarian portion comes into it because that truck driver sits in his truck. He can’t move out because he’s in the customs control area and you know, the heat is 38° and he’s got to sit in his truck. The truck’s going to run all the time to run the air con. There’s another fiscal issue to the owner of the truck because there’s diesel that’s been used.

17:54
On the other hand, you get some of the customs officers that’s quite jacked up. They will try and get the trucks out as fast as possible. They will then also adjust whatever they are doing to facilitate that truck moving through. So, there’s pros and cons for people at the border post

18:19
If you look at the evolution of now cross-border operations, what practises would you say improve predictability and reliability over time?

18:27
I would think planning and transparency because if we get it right that we know what is the demand, how many trucks will move to the border post and there is the transparency and the people at the border post. Although a lot of countries don’t want the border post to be a stop. They want to push the controls much earlier in the supply chain to, maybe say, that you must inspect your cargo inland. We will do seal, we’ll close it off, we’ll do seal recognition. So the border post will then actually get away.

18:59
I’m not sure if we will get in my lifetime to this scenario, but that means, if you have planning and transparency and you’ve got a good escalation mechanism, that if there’s something happening at the border post and you know who to phone, which authority to quickly unlock it. I think we are on a long way to having a winning formula because that’s normally what the problem is of the border post.

19:23
You can see this build up is going to create a catastrophe, but you can see it in private sector. But then you want the public sector to wake up to see that here’s a catastrophe coming. But they see the catastrophe too late. In the moment that they experience it, it’s too late. We all know it. It’s difficult then to draw back and all that we want to know in private sector, we can plan and transparency. And if you see this catastrophe happening quickly unlock it and plan and take hands. I would think that’s why I would suggest that transparency go with that.

19:58
The government agents, especially SARS, are also looking at smart borders or one stop border posts. Where the information that they pushed through on their risk management engine, when you submit a document to them, then all that information goes through to the border posts, that’s all contained in your road manifest. So when a truck gets to the border and there’s a barcode on there, when he scans it, all the information that was on the SARS risk engine, is on that piece of paper and then that will tell them the truck needs to be stopped. This is the problem with this truck, these details are missing or the truck is ready for clearance, and it can go through. All that information is contained in that barcode, which also help a lot for the cross-border assistance for the vehicles to pass through.

20:59
That is very interesting. But now tell us as a final thought, what does the future of cross-border transaction look like for you guys? What do you think is going to happen in the future if you were to cast your eye into the next 10-15 years or so?

21:13
You know, Hugo said about the barcode. It was 2 gentlemen that developed the barcode. It was in 1952, but they never designed the barcode to do what it is doing today. And I think that’s probably what AI will do. We see it now, but it will transform our environment I think in the next 5 to 10 years tremendously.

21:34
You know, I think AI is going to play a big role. At the moment as well, customs are also implementing AI in their system because if we do a clearance and there’s a query on the documentation – it can be queried for a million things – but the documentation that you submit has to be in certain formats because customs made a change to the format of packing lists, invoices, other documentation must be and so on. So, what they do is upload it and I send it to customs. That documentation goes through an AI process where they scan the documents and that information that they I’ve scanned in must relate to the information that they got from overseas. And if it doesn’t match, his entry gets rejected or need more information. So AI is going to play a big role in future.

22:30
Artificial intelligence is incredible how in every sector we discuss, it plays such a critical role. We can’t thank you enough for the amazing insights that you’ve shared with us.  Through this discussion we’ve learned that seamless trade is built through cooperation, consistency, and people working together across borders. Thank you, Hugo and Juanita. We really appreciate you for unpacking the realities of behind cross-border logistics. You’ve helped us see that cross-border effectiveness depends not only on agreements, but on execution. On our next episode, we will discuss how logistics supports trade, continuity and connection across the continent.