Singapore Customs and Info-Communications Development Authority of Singapore

The Problem

Trade is the lifeblood of Singapore, with our trade value about 3 times of our GDP. Hence, a seamless, efficient and secure trading regime is a key part to our national competitiveness. While Singapore has very efficient trade community systems in place, such as TradeNet, the entire supply chain landscape is fragmented with different levels of IT adoption and capabilities across the various parties in the value chain.

In today’s highly complex supply chain landscape, a typical supply chain for international trade can involve up to 25 parties and generate 30-40 shipping documents. At each stage of the supply chain, goods, money and information change hands. Exporters, importers and other trade and logistics players make use of various IT systems for greater efficiencies at different points on the supply chain. With the lack of interoperability between these various IT systems, companies are not able to harness the full benefits of IT to increase efficiency and productivity with their supply chain partners and the government. This resulted in sub-optimal trade administration processes. Players in the trade value chain often have to subscribe to multiple systems that are not integrated, resulting in multiple data-entry steps, duplication of efforts and high error rates. A Singapore government study, validated by the industry, showed that up to 55% of information contained in a key trade document such as the bill of lading and 83% of information for a Singapore export permit is already available earlier in the value chain. Separately, the United Nations has estimated that such inefficiencies cost up to 10% of global trade value based on 60-70% of data that is re-keyed in at least once.

In addition, owing to the lack of integration of IT systems, companies only have a partial view of the supply chain and are not able to plan effectively. This problem is further exacerbated by countries’ tighter security requirements for global supply chain visibility and credible audit trials.

Solution and Key Benefits

 What is the initiative about? (the solution)
To alleviate the afore-mentioned issues and raise the competitiveness of the trade & logistics community, the “Integrated TradeXchange® Programme”, a strategic national initiative, was thus developed to provide the trade and logistics community with a neutral and trusted integrated IT platform to enable seamless exchange of information across the supply chain.

Through TradeXchange®, companies in the trade value chain can achieve higher productivity, greater operational efficiency and business agility by streamlining their processes and systems to leverage common data standards, share and re-use information seamlessly with different parties across the supply chain and improve data accuracy and integrity, for both Business-to-Business (B2B) and Business-to-Government (B2G) transactions. Third-party Infocomm Solution Providers can also leverage the network connectivity and information deposited into TradeXchange®, to develop and market new/enhanced innovative solutions so as to further enhance the capabilities and sophistication of the trade & logistics sector.

TradeXchange®, one of the world’s first collaborative platforms for the trade & logistics communities also provides excellent connectivity options for companies of all sizes. Through process streamlining and standardisation, companies can get connected to each other without incurring large IT investments.

To ensure that the services offered delivers value, several consultations with the industry were conducted prior to identifying the following 3 integrated chains:

1) Trade Permit Declaration - Enables declaring agents to shorten the time and increase accuracy in trade permit applications. Relevant consignment information is extracted from Shippers backend systems to TradeXchange® and used to auto-populate trade permit declaration. This reduces permit preparation time by up to 50% – from between three to four days, to just one to two days, resulting in faster turnaround for trade permit approvals, better customer satisfaction and higher competiveness in the marketplace.

2) Marine Cargo Insurance - Enables freight forwarders to reduce the preparation and processing time with instant approval of Insurance applications via TradeXchange® and has enabled companies to obtain up to 90% time saving and reap cost savings of approximately $20K annually ;

There are also significant efficiency gains for insurance companies, which could now access multiple freight forwarders and shippers through a single platform instead of building separate links to each forwarder or shipper.

3) Trade Finance (Factoring) - Enables suppliers, buyers and banks to exchange documentations for trade finance applications electronically and securely. This cuts down the manual processing resulting in lower administrative costs, faster turnaround times for finance loan applications, reduced interest rates and more competitive financing for the suppliers.

The success of the above three chains have prompted the industry and trade associations to collaborate with the government for additional process integrations through TradeXchange®.

TradeXchange® is in an ever-growing ecosystem and will continue to evolve with more uses and new solutions being offered, giving companies’ greater oversight and access to information to improve their supply chain planning and visibility. This will further improve the productivity of the trade & logistics community, strengthening Singapore’s position as an efficient and secure trade hub.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
The “Integrated TradeXchange® Programme” is jointly led by Singapore Customs and Infocommunication Development Authority of Singapore (IDA).

Singapore Customs (SC), in view of their role in trade facilitations and customs, is the policy and business owner for the core IT systems and infrastructure to drive the processing rules and requirements. The government retains the intellectual property (IP) rights.

The Info-Communications Development Authority of Singapore (IDA) is the overall program manager to coordinate the implementation of TradeXchange®. IDA as the Chief Information Office and IT Architect for the Singapore government also undertakes the role of the technical project manager for the core IT systems and infrastructure of TradeXchange®. The design, development, support and operations of these IT systems and infrastructure had been outsourced. IDA also works with third party services providers to ensure the development and availability of VAS to serve the needs of the industry.

Both agencies worked closely with the following stakeholders in the Programme:
(a) The Economic Development Board (EDB), with an interest in the efficiency of supply chain management and logistics industry, plays a role in the promotion and adoption of TradeXchange®. Existing industry development and financial assistance schemes of the various participating agencies continue to catalyse development of VAS, pilots and trials and adoption by Small and Medium Enterprises (SME).

(b) Spring Singapore (SPRING), with an interest in helping Singapore enterprises grow, works with partner agencies to help enterprises in financing, capability and management development, technology and innovation, and access to markets.

(c) The Trade and Logistics Community plays a pivotal role in assisting the team to identify un-served opportunities that would allow businesses to enjoy clearer supply chain visibility, faster shipment turnaround and increased in productivity due to reduction in errors and timely exchange of information.

(d) The Value-Added Service Providers to develop enhanced / new innovative solutions that will help to bring efficiency gains to the parties across the value chain.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The “Integrated TradeXchange® Programme” aims to enhance Singapore’s trade, logistics and financial sectors by reducing information redundancy and improving responsiveness of shippers, their service providers (logistics providers, carriers, banks) and government agencies in the supply chain through the adoption of open e-business standards and sharing of common IT services.

Create Awareness and Interest:
To ensure that the services offered by the Integrated TradeXchange® programme brings strong business value proposition to the parties in the supply chain, several consultations with the industry, including key shippers, were conducted to study the business needs. Significant opportunities in the areas of increasing supply chain visibility, optimizing trade administration processes and integrating physical logistics and financial flows were identified.

Develop a Co-Creation Framework:
To engender a vibrant environment where the different players in the supply chain would come on board the programme, it is imperative for the government to engage the businesses and the trade and logistic sector to bring together different stakeholders to tap on their knowledge and creativity to work together to reengineer business processes and encourage development of new integration chains for further re-use of data deposited in TradeXchange® to prepare for other downstream documents.

3rd party Infocomm Solution Providers can also leverage on the substantial network and B2B data repository built up in TradeXchange®, to develop and market new/enhanced innovative solutions so as to enhance the capabilities and sophistication of the trade and logistics sector

Develop Inter-operability architecture:
To ensure a successful implementation, the team catalyze the integration of the various parties based on prevailing international / industry data standards; and made available the interface specifications to allow other players on similar value chains to also ‘plug-in’ to TradeXchange®.

Enhanced Governance Framework:
In addition to designing the technical architecture of such cross-party data and process integration and addressing the associated service level and liability issues, it is also crucial to enhance the existing governance framework and measures to provide good assurance of data confidentiality and fair-play by participating parties in the supply chain.
Marketing and Adoption:
To further encourage adoption of the TradeXchange®services, the team developed success case studies for each of the integration chains to showcase the benefits to the businesses. The successful model will then be replicated to more customers of the participating parties, as well as expanding to the rest of the players with similar processes in the supply chain.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
2003: Strategic Study Team (SST) led by an inter-agencies study team to determine “InfoPort” (now known as TradeXchange®)feasibility

2004 to 2005: The project was approved by Ministerial Committee in 2004 as a strategic national initiative. The project team comprises of members from SC, IDA and EDB, went through a rigorous process to define the ownership, financial, operating and governance model in preparation for the tendering process. The tender was awarded in Jul 2005

2006 to 2007: To encourage early adoption of TradeXchange®, 2 rounds of Call-For-Collaborations (CFC) were called in 2006 by the lead agencies, Singapore Customs, IDA and EDB, to provide a breadth of B2B value added services on TradeXchange®. TradeXchange system was launched in Oct 2007.

2008: Despite the range of B2B services offered, the adoption from companies to leverage on TradeXchange® for its B2B transactions has been slow. The team conducted a review and consulted with industries to identify possible root-cause.

2009 to 2010: Learning from the experience gained, SC and IDA, partnered with EDB and SPRING called for another CFC in 2009, to invite businesses to form consortia to implement and demonstrate the potential benefits of TradeXchange®. This time, the focus was on the businesses, instead of depending on the VAS Providers to propose the solutions. Through several consultations with the industry, SC and IDA identified 3 integrated chains (Trade Permit Declaration Chain, Marine Cargo Insurance Chain and Trade Finance Chain) that will bring values to the businesses. To develop strong business propositions, the team brokered the various businesses together, and re-engineered their B2B processes to bring win-win to all parties involved in the value chain. The team also leveraged on Open Industry standards to develop the integration, so as to facilitate subsequent adoption by businesses alike.

2010 to 2012: With the successful implementation of the three chains, more companies and associations have approached the team to explore additional process integrations through TradeXchange®. More new services such as those shared above will be implemented progressively in 2013.

TradeXchange® is an ever-growing ecosystem the services offered will continue to leveraging on ICT to improve capability and productivity of the trade and logistics sector.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
The key challenges encountered in developing the Integrated TradeXchange® programmes and the ways to overcome them are set out below:
1. Businesses did not see compelling needs to unravel their old business practices:
To ensure viability, it is important for companies to stay agile and adapt to new ways of working to level up their competitiveness. Hence, the need for the government to catalyse the change by brokering the various businesses together, re-engineered their B2B processes to bring win-win to all parties involved in the value chain as well as to provide funding to early adopters to encourage the use of technology to elicit change and bring about better efficiency and productivity.

2. 3rd party Infocomm Technology (ICT) Solution Providers perceived that TradeXchange® would level their playing field and thus, unwilling to offer their solutions on TradeXchange®: To overcome the perception that TradeXchange® competes for customers with various ICT providers, the team consulted the industry (which included importers/exporters, freight forwarders, air freight companies, banks and VAS providers. List of companies consulted include: ST Electronics, Skylift Consolidator, Fedex, DHL, CargoWise,EDI, Mitsui Chemicals, Global Airfreight, E-Trek, CybeLog, GridNode, CrimsonLogic eTrade, Kewill-IPACS, SysQuest, Synergix and DBS.) and decided to focus on identifying un-served opportunities and complement existing ICT’s solutions, allowing them to continue to serve their customers and not see TradeXchange® as a threat. TradeXchange® will serve as a one-stop connection hub to the ICT providers and logistics service providers; that enable them to expand their service offerings and to provide a more efficient end-to-end solution to their customers. To the businesses, they will enjoy clearer supply chain visibility, faster shipment turnaround and productivity due to reduction in errors and timely exchange of information.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
Through effective planning we maximised our human, technical and financial resources to implement the programme.

1. Human resources: In this multi-agency project, no additional headcount was required. Existing manpower in the respective government agencies was used to run and manage the project. In addition, the team also leveraged on success stories; sharing by companies on their experience in re-engineering their processes with their partners and the benefits derived from TradeXchange® to encourage adoption.

2. Technical resources
The development, operation and maintenance of the TradeXchange® were outsourced to the vendor, CrimsonLogic .

3. Financial resources
The financial costs vary across the different Services implemented in the TradeXchange® programme.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
The “Integrated TradeXchange® programme” is both sustainable and transferable. Since the implementation of the 3 integrated chains in 2011, more companies and associations have approached the team to explore additional process integrations. The total numbers of transactions processed through TradeXchange® had increased by 36% since Jun 2012, bringing the transactions to a total 73,336 (Statistic as at Oct 2012). The programme had also engendered a momentum within the industry to continue to re-engineer business trade processes to achieve greater productivity.

Besides accelerating the adoption of the 3 chains, the team is also working on more integrated chains to bring more value to the businesses. Examples of these chains are:

(a) Data@Source : to integrate with the ERP software (Kingdee, Sage and MS Dynamics) to obtain information from the shippers so that the data could be re-used for various downstream applications;

(b) Permit Return: Enable shippers to integrate its backend systems to receive their approved customs permits on a more timely basis for their downstream reconciliation; and

(c) eCO preparation: Enable shippers to improve productivity by re-using data from approved trade permit to prepare for non-preferential electronic certificate of origin applications. Non-preferential Certificate of Origin is used traders to assure buyers that the products exported are wholly obtained, produced or manufactured in Singapore.

The Integrated TradeXchange® programme can be replicated internationally by adopting the programme objectives and the Co-Creation Framework.

Being one of the world’s first collaborative platforms for the trade and logistics communities, TradeXchange® has attracted interest and queries from other delegates in the region. Many sessions had been conducted to share on our experience and journey. A few examples are listed below:
- Asia Pacific futureGov July - August 2012 Vol. 9.4
- 2012 WCO IT Conference & Exhibition
- 2012 ASEAN Single Window Symposium

Some compliments received from the industries on TradeXchange® are as follows:

“In the case of QBE, the single interface through TradeXchange®, provides good process efficiencies...We have received very positive feedbacks from our customers...”
~ Mr Colin M. Lincoln, Regional Underwriter, QBE Insurance (International) Limited

“... The faster turnaround and higher accuracy of trade clearance has enabled HDS to increase our competiveness in the market place.”
~ Mr Luke Teo, General Manager, APAC Distribution Center, Hitachi Data Systems Pte Ltd

“...It is a platform that provides us great opportunities to do our business not only here in Singapore but across the region as well.”
~ Mr Evan Puzey, Chief Operating Officer, Asia Pacific, Kewill Pte Ltd

“From a Trade Permit declaration standpoint, ... we see significant improvements in turn-around time for permit preparation, as well as substantial improvement in data accuracy.”
~ Ms Lim Khoon Ling, Country Manager & Managing Director, Expeditors

“ ... TX as a platform allows DBS to bank with multiple corporate clients through 1 single connections rather than having to build 1 connection for a client. This flexibility has generated administrative savings and shortened the solutioning integrations with clients.”
~ Mr Vijay Vashist, Managing Director, Global Transaction Services, DBS Bank

Lessons Learned

 What are the impact of your initiative and the lessons learned?
The key elements which have made the Integrated TradeXchange® Programme a success have been set out in the answer to questions above and will not be repeated here.

In this regard, the team would like to highlight that one of the key elements which has made the initiative a success is the strong support from Industry thought leadership such as the Customs Advisory Council, Trade Associations, etc, and close collaborations with businesses to ensure that the TradeXchange® platform is “built for the trade community and used by the trade community”.

The second key element of success is visionary leadership which led to the initiation of the Integrated TradeXchange® Programme. The leadership has also put in place a long-term strategy to sustain this initiative. The team will continuously implement new services to meet the ever-increasing needs of the industry.

Finally, perhaps the most important element of success and sustainability of the “Integrated TradeXchange® programme” is the firm belief, passion and commitment on the part of all concerned, from top management to the line officers, in the motto of making trade easy, fair and secure to ensure our national competitiveness.

In Summary, by integrating the IT systems, business processes and data through TradeXchange®, businesses enjoy greater operational efficiencies, clearer supply chain visibility, faster shipment turnaround and productivity due to more timely exchanges of information and documents across their partners in the value chain. To the IT service providers, TradeXchange® will provide a one-stop connection hub to enable them to expand their service offerings and provide a more efficient end-to-end solution to their customers.

Contact Information

Institution Name:   Singapore Customs and Info-Communications Development Authority of Singapore
Institution Type:   Government Agency  
Contact Person:   Angelene Chua
Title:   Deputy Head, BIB  
Telephone/ Fax:  
Institution's / Project's Website:  
Postal Code:  
City:   Singapore
State/Province:   Singapore
Country:   Singapore

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