Transparent and interactive communication platform urged to curb corruption

From left: SLFFA Chairman Roshan Silva, SLFFA Secretary General Rohan Induruwa, SLFFA Vice President Dinesh Sri Chandrasekara, Founder President Expolanka International Limited and Group CEO of Expolanka Holdings PLC Hanif  Yusoof and SLFFA Immediate Past Chairman Jagath Pathirane 
Pix by Samantha Perera

• Logistics and freight forwarding industry says transparent and interactive comms platform can prevent corruption, improve efficiency  
• Based on blue print currently working on to develop a software platform to bring all industry  stakeholders together
• Warn that partial automation of processes at Sri Lanka Customs leaves room for corruption 

By Nishel Fernando 

The Sri Lanka Logistics & Freight Forwarders Association (SLLFFA) is planning to develop a transparent and interactive single communication platform aimed at curbing corruption and boosting efficiency in logistic operations. 

“Dealing with corruption, non-availability of a mechanism for reporting along with the lack of transparency in operations are real issues we face on a day-to-day basis.
“Communication methods have been developed substantially over the years. However, sadly in Sri Lanka we restrict ourselves to conventional methods of communication. There’s an opportunity for communication platforms that synchronise with all stakeholders,” SLLFFA Chairman Roshan Silva told its members at the Association’s 38th Annual General Meeting in Colombo last Friday. 

Based on a blueprint, SLLFFA plans to develop a software platform bringing all stakeholders including the Sri Lanka Ports Authority (SLPA), Director General of Merchant Shipping (DGMS), Sri Lanka Customs and Airport & Aviation Services (Sri Lanka) Limited (AASL) to the interactive platform. 

Silva pointed out that it requires months to resolve most of the industry issues with the authorities while sometimes with no transparency in the decision making processes.
“Discussion forums should be created with pragmatic timelines, making every one answerable and accountable, enabling the industry to move at the desired space. An interactive single communication platform would be the answer to expedite all processes.

“This platform will not only be a forum for queries but a platform where details will be recorded, malpractices rectified promptly, grievances recorded and practices analyzed,” 
he elaborated. 

Illustrating an example, he noted that though only a single one-time delivery order fee can be charged on an import consignment as per new regulations, in reality additional fees are implemented by shipping lines, the consolidator and so on.

Hence, he pointed out that the proposed platform will enable the logistics firms to interact with the regulator, the DGMS and seek swift solutions. 

“Any additional charge should either be blocked by the DGMS or the logistic company should be able to get the actual reimbursed. We should have the facility to upload invoices of any additional charges for immediate action of DGMS, and the action taken should be visible. 

“The membership will be able to post their queries and concerns real-time and be able to receive a satisfactory response, rather than having to wait for the next meeting or not having their issues resolved at all,” he said. 
Silva also expressed concerns on the partial automation of processes at the Sri Lanka Customs instead of fully automation, leaving the room for corruption. 

“For example, Sri Lanka Customs is yet to embed the penalty structure for late reporting and amendments to cargo manifest, which is a rampant source of corruption.  

“If there are amendments to cargo manifest, there’s a penalty fee of Rs.10, 000-100,000, which is solely decided by the Customs officer at his/her own discretion. There’s no transparency in this process,” he stressed.

Silva said that these errors can be categorised on the system and based on the categorisation, Sri Lanka Customs could charge penalties without direct involvement of officers. 
Further, he pointed out that the proposed interactive single communication platform would also be an ideal mechanism for reporting and resolving such issues. 

As digitisation of the logistic industry has emerged as a key trend, Silva also stressed that the country needs to step up to address technical challenges to take advantage of its 
strategic location. 

“What level of preparations do we have for last minute deliveries and integrations done with firms such as Amazon? This is an area that we need to explore. We need to look at how to support the reverse haulage in the transportation industry which is important for its survival. Developing virtual products and working beyond Sri Lanka should be a focus area 
for the membership.

“There are opportunities available in entrepôt trade which need to be capitalised on,” he added. 

Further, Silva also endorsed a common airport warehousing facility for general members, which has reached 118 now, as the current warehousing facilities are only limited to 
20 plus members. 

He also pledged support to set up a common bonded facility for SLLFFA members to create a level-playing field.

“This is again a project which SLLFFA’s commercial arm could look at working with SLFFA cargo services,” he added. 

The SLLFFA membership currently accounts for 80 percent of logistics sector activities in the country. 

Credit extended to exporters put freight forwarders in tight spot 

A number of small and medium –sized freight forwarders have run into difficulties with some exporters taking undue advantage from the credit lines extended to them, Sri Lanka Logistics & Freight Forwarders Association (SLLFFA) says.

 “Logistics as an industry has provided substantial amount of credit facilities to the trade. We have acted as financial institutions to the export industry in Sri Lanka for which we don’t get the same facility back from the main lines, ocean or air. 

It’s extremely important that logistics firms work within a lower level of credit which has to be accepted by the exporter community,” SLLFFA Chairman Roshan Silva said.
Freight forwarders offer credit lines up to 60-90 days to exporters while shipping lines have strict credit lines limited to a maximum of 30 days.  

Due to intense competition, Silva noted that many freight forwarders are compelled to offer credit extensions. 

“It’s a commercial arrangement between the exporter and the forwarder. However, exporters have considerable influences over the forwarders to extend the credit lines.
 “As credit is mainly financed through borrowing, there is a large finance cost involved. Many SME firms which were closed down due to these credit issues,” Silva said. 
He urged that exporters should fall in line with liner credits which would allow the logistic industry to be more viable, focusing on areas such as value addition. 

Silva called influential Associations such as the Shippers Council and Joint Apparel Association Forum (JAAF) to encourage their membership to make payments within a reasonable time in line with liner credit.

“There should be a mechanism where logisticians could reach out to bring in new regulations on the undue advantage taken by certain exporters,” he said. 
Further, Silva also called industry stakeholders to join together to set up the liability insurance policy to cover the risk of detention and demurrage of an abandoned consignment.Currently, the risk of detention and demurrage of an abandoned consignment falls on the logistics provider and not the liner.