It is during seasons of strife that the world is restructured.
Since the start of the pandemic two years ago, a revolution has been happening in the shipping industry. The maritime supply chains is what globalization depends on to move pretty much everything to all corners of the globe.
However, climate change, the pandemic and now the war in Ukraine have dealt a major blow to the current structure of supply chains.
This week, Shanghai City in China was ordered into lockdown after a spike in covid-19 cases. As home to world’s busiest port, which moves approximately 250,000 containers in a day, speculation amongst shippers is high. It will likely tip the container spot rates leading to additional freight costs.
The burden is adversely felt by net importing countries that depend on Shanghai city for anything from electronics to clothes.
How then can countries especially in Africa shield themselves from the increasing shocks in global supply chains?
“We have not been focusing on neighboring markets. We always seek US and EU markets to trade. There are now limits to globalization and they should make us look into what we can source from our neighbors,” Mr Raj Mohabeer, the Officer In-Charge at Indian Ocean Commission told Our Ports magazine in an interview last week.
The Indian Ocean Commission (IOC) is already carrying out a feasibility study to help create a roadmap for a Regional Maritime Single Window (RMSW) for Western Indian Ocean countries. Essentially, RMSW is a trade facilitation tool that could enable these neighboring countries to trade efficiently.
It mainly consist of a digital trade portal housing maritime business processes ranging from customs, border control, cargo manifest and port security among others. IMO’s (International Maritime Organization) FAL convention is the anchor framework on creation of single windows in the maritime sector. It mandates ships and ports to exchange maritime traffic data electronically.
The IOC is an intergovernmental body that links five African Indian Ocean islands of Comoros, Madagascar, Mauritius, Reunion (an overseas region of France) and Seychelles. These nations have a rich history of trading with each other dating pre-colonial era. However, in the proposed RMSW project, Kenya, Mozambique, Tanzania and South Africa will be included as partner countries.
In the wake of the African Continental Free Trade Agreement, initiatives such as RMSW will immensely facilitate intra-regional trading.
Nevertheless, the process of actualizing RMSW concept is a complicated one. Specifically, most ports in the western Indian Ocean have low connectivity and productivity levels. The ease of doing business is also low as ship-turnaround time can reach 10 days in some instances.
In addition, no place in the world has successfully implemented a regionalized maritime single window. The EU (European Union) has a legislation but lacks a functional portal to aggregate maritime traffic data. ASEAN region has a regional single window system but it has not been optimized to have a maritime module.
So, how will Western Indian Ocean region succeed with the RMSW proposal?
Fortunately, it is plausible as most countries where the project will cover already have national single window system. For the few without – mainly South Africa – they have an elaborate Port Community Business portal, which can be easily integrated into a regional single window.
The question then is how to link all the national single windows of the various countries into a regional single window. The consultant leading the project’s feasibility study recommends creation of an API (Application Programming Interface).
This will create a computer-to-computer communication channel to aggregate all maritime data into a regional portal. As a start, the main consideration should be to have a scalable module adaptable to different technology scenarios existing in the region. For instance, Kenya has the most comprehensive National Single window system in Sub-Saharan Africa.
However, the bulk of the work is to harmonize the national single window systems for different countries to ensure they have a minimum threshold to be integrated into RMSW. The other thing is creation of a regional data protection framework to guarantee trust amongst stakeholders. Some countries in the region are yet to ratify the FAL Convention.
“We need to continuously develop strategies for enhanced maritime connectivity in Western Indian Ocean (WIO) region. Trade specialists sometimes tend to oversimplify regional economic integration into a cabotage system as the only solution. What I think is important is to leverage on new technology to improve efficiency and competitiveness in the region,” said Mr Mohabeer.
