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

1/14/2018 Logistics Transformation: E-Commerce and Implications on Trade Facilitation Shiumei Lin – Vice President, Public Affairs, UPS Asia Pacific Region World Bank,16 Jan 2018 1 The Changing Faces of Logistics Services Implications on Border Clearance, Services, Competition Policy, Talent, Data Protection, Sustainability Algorithm provider, drone Courier, package sorter, Driver, hub operator, Third Party warehouse Consultant, application operator, sustainable city air carrier international express operator, technician, provider, locker service courier delivery, Customs Broker engineer 1907 2017 2 1

1/14/2018 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) 3 Implications on Border Clearance New Challenges for Border Agencies  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 opportunities for illicit trade, and security threats.  Loophole “Solutions”: Inconsistency across modes of transport and enforcement (express, post, B2B2C, personal couriers) 4 2

1/14/2018 Implications on Border Clearance Responses Leading to New Complexities in Trade Quotas on D/T Free Shopping No more waiver of duties and Additional Paperwork / taxes for frequent shoppers, Special Channels Data Requested even if within de minimis Special platform / clearance Power of attorney, IDs, data threshold, with caps on channels for specific goods. number of shipments per Duty and tax preferences or non- month/year. preferences. Additional Screening Other Calibrations X-ray of all imports, Personal shipments vs. Commercial submission of image scans, Commercial shipments, Presence additional inspection, special Weight Restrictions, Registration or facilities. Special duty rates mandatory commercial presence for tax purposes 5 Implications on Border Clearance Emerging Solutions Low Value Program + Trusted E-World Trade Platform Others Trader Program (eWTP) Trade Facilitation & Enhanced Trade Facilitation Data Visibility Global Network - Simplification Program for <SDR 1000 - Global Data Standards (bar- - Governments to join eWTP. shipments based on WCO Immediate code technology) to improve Malaysia is first example. Release Guidelines supply chain integrity Value-Based Simplification & Global e-Commerce Network & Clearance Channel Targeted Solutions Trade Facilitation Emerging Technologies Risk Management Using Data - Block-chain distributed ledger - A separate clearance channel - Data-based intelligence and risk technology for process for registered e-commerce management improvement and data transactions. visibility - Trusted trader certification program for e- - China’s GAC 26 channel is Commerce retailers example. - Enhancing postal compliance and Enhanced Data Visibility closing loopholes - Registration and data from Capacity Building seller, payment, logistics, and - Capacity building for e-Commerce buyer for risk management retailers purposes. - Marketplace educational efforts Business Model Collaboration with Operators - Domestic fulfillment model (Bonded Warehouse) - Smart tax collection preferred. - Shared intelligence, data, and Controlled deliveries 6 3

1/14/2018 Thank you Shiumei Lin Vice President, Public Affairs UPS Asia Pacific Region lshiumei@ups.com 4