# Presentation: 950935

## Greater Mekong Sub-region Convention

**Presentation for:**
**Greater Mekong Sub-region Convention**
**Chiang Mai, March, 2008**

## Who is UTi?

- UTi Worldwide Inc. is an international, asset-light supply chain services and solutions company.
- Our services include air and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management and optimization solutions and services, including consulting, the coordination of purchase orders and customized management services.
- Through our supply chain planning and optimization services, we assist our clients in designing and implementing solutions that improve the predictability and visibility and reduce the overall costs of their supply chains.
- We reported gross revenues of $3.6 billion for our fiscal year ended January 31, 2007.

## Agenda

- Thailand-Malaysia Cross Border Management - How Do We Do It?
- Constraints
- Should Be

## Thailand-Malaysia Cross Border 

**Sadao-Bukit Kayu Hitam ****Primary crossing for road freight.****Two customs points****Limited automation****Restricted work hours**

**Padang Besar. ****Primary crossing for rail freight.****Two customs points****Limited automation****Restricted work hours**

**Notes:**
Distance from Bangkok to Sadao border: 1100km – 16-18hrs
Distance from Bukit Kayu Hitam to Penang: 250km – 5hrs
Distance from Bukit Kayu Hitam to Kuala Lumpur: 600km – 12hrs 

Two border crossings: Padang Besar and Bukit Kayu Hitam

Traditional trade: High-Tech, FMCG, Fresh produce, rubber products

New sectors: Automotive, industrial

## How Do We Do It?

- Asset light
- Using existing capacity
- Process focus
- Conditioning
- Training
- ISO Certification / Compliance
- Monitoring / Control

**Notes:**
Partnership helps grow domestic capabilities and allows UTi to long term pick from a litter of capable players.
The strategy enables UTi to maintain a healthy cashflow in line with investor expectations.

Focus on the positives – reinforce behaviors – stress fundamental values like safety and defensive and controlled driving

Learn from accidents and service failures – cascade learnings

**H. M. Royal Thai Customs**

**Royal Malaysian Customs**

**Notes:**
Distance between customs points: 750m
Two bottlenecks

Un-harmonized customs tariffs/codes – mainly on food products and fresh produce

## Export / Import

_**EDI: **_
- 60 minutes process time
- Queuing: 2-3hrs

_**Paperless:**_
- 30 minutes process time
- Queuing: 2-24hrs

_**EDI: **_
- 60 minutes process time
- Queuing: 2-3hrs

_**Paperless:**_
- 20 minutes process time
- Queuing: 2-24hrs

***Export***

***Import***

## Agenda

- Thailand-Malaysia Cross Border Management - How Do We Do It?
- Constraints
- Should Be

## Export

_**EDI: **_
- 60 minutes process time
- Queuing: 2-3hrs

_**Paperless:**_
- 30 minutes process time
- Queuing: 2-24hrs

- Concerns
- Two customs windows:
- Evaluation
- Inspection
- Stamp and signature on all documents

- Concerns
- Only one customs window
- Lack of IT savvy customs staff
- Unfamiliar job activities

## Import

_**EDI: **_
- 60 minutes process time
- Queuing: 2-3hrs

_**Paperless:**_
- 20 minutes process time
- Queuing: 2-24hrs

- Concerns
- Driver must manually fill in vehicle declaration
- Two customs windows:
- Evaluation
- Inspection
- Stamp and signature on all documents

- Concerns
- Only one customs window
- Lack of IT savvy customs staff
- Process is still sequential
- Unfamiliar job activities (customs)
- Documents still have to be submitted in hardcopy

## Infrastructure
Lack of alternative routes 
Limited expansion options at border

Process
Bottlenecks 
Multiple customs procedures
Manual processing
Work hours

Legislation
Dual registration / Double taxation
Harmonized driver training
Facility constraints 
Licensing constraints (Malaysia, Laos)

- Lack of alternative routes
- Limited expansion options at border
- Process
- Bottlenecks
- Multiple customs procedures
- Manual processing
- Work hours
- Legislation
- Dual registration / Double taxation
- Harmonized driver training
- Facility constraints
- Licensing constraints (Malaysia, Laos)

- Constraints

**Notes:**
Only one main artery leading to Sadao
Village structure preventing widening of the road to the border point

Processes are hampered by bottlenecks, lack of standardized procedures, manual process and restricted operating hours

Dual registration costs, different driver training/licensing procedures, 

No consol centers allowed on the Thai side – legislation?

Business constraints prevents free market competition – licenses in MY + Laos

## Agenda

- Thailand-Malaysia Cross Border Management - How Do We Do It?
- Constraints
- Should Be

## Should Be

- Consolidated clearance process
- Harmonized customs procedures
- CMR
- TIR
- Automated / Paperless brokerage
- RFID enabled clearance
- Free market
- Trucking
- Consolidation centers
- Dual registration elimination

**Notes:**
One common shared customs facility to level flow and leverage resources to maximize throughput versus cost
Common processes + procedures

Implementation of RFID enabled clearance process - not only Free Zone / EPZ / Bonded loading. The trucks are sealed and the shipper is thus accountable for content as he would be without RFID.

Open market – no restricted truck operator licensing + Thai consolidation centers

Harmonized registration fees/processes to reduce the cost of operating fleets across the border

## Key Infrastructure

**2005**

**2015**

**Notes:**
Long time talks about Thailand as a hub – liberate consolidation center licensing, facilitate the construction of warehouses and support facilities in proximity to key structures – ports/airports/border crossings

Lead by example and learn from other parts of the world like the EU

**Thank You!**