In general, for risk management to be successful, it must be applicable to the whole logistics chain and address all aspects of control. Risk management can also be extended to the issue of security and provide incentives/reward for compliance. Given the heightened security environment, a risk-assessment template targeting high-risk areas for special security programs can be adopted. Since it is impossible to screen and inspect all containers, procedures to identify high-risk containers—by detecting irregularities in shipping patterns for example—could be deployed.

# _Measuring Trade Facilitation_

Indicators for trade facilitation can provide a basis for analyzing the impact of trade facilitation on development, as a benchmark for regional comparisons and for measuring the effectiveness of domestic reform processes associated with accelerating trade facilitation. Trade facilitation indicators can measure the performance of a particular reform, the efficiency of ports, customs etc. or can be a composite index combining different elements that make up trade facilitation. Trade facilitation has most often been proxied by a single indicator, such as import prices, international transport costs, or the productivity of a particular transportation mode (air, maritime, road). These traditional measures have to be replaced by something more consolidated that can be used more widely and that reflects transport and logistics efficiency.

Work on indicators and data bases is being carried out by several organizations such as the World Bank<sup>45</sup> , UNECE etc. Data are currently available easily for indicators of port efficiency, transport, infrastructure and investment/business climate. Indicators that rank countries on usage of ICT, corruption, regulatory framework, governance etc. are available. SPS and TBT are issues have received less importance. Current data on trade facilitation suffers from lack of harmonized definitions and measurement tools, limited country coverage, poor quality, lack of time series data sets etc.

Performance indicators for Customs for example, include clearance times, rates of examination, detection rates etc<sup>46</sup> . While there exist several data sources, there is no uniform and commonly accepted definition of customs clearance times. Measurement methodology differs around the world and there is no standard template or methodology for calculating, on a time series basis, days required to clear customs at national points of entry. For instance, inland clearance time can be the time from arrival of truck until the time of release. Thus, clearance of international cargo will be slow if the entire process of manifest filing, declaration, assessment, duty payment, and examination are taken into account. The World Bank Investment Climate Assessments calculation is based on firm-

> 45 The Bank developed trade facilitation indicators for APEC countries in four key areas of trade facilitation: port efficiency, customs procedures, the regulatory environment and e-commerce capacity. The analysis suggests that improved trade facilitation could increase intra-APEC trade by $254 billion, or 21 percent (Wilson, Mann and Otsuki, 2003a). Wilson, Mann and Otsuki (2003b) extend this analysis to 75 countries. Their results suggest that trade facilitation measures that bring countries 50 percent up towards ‘best practice’ could expand total trade by $377 billion.

> 46 See TTFSE  methodology for measuring border processing and clearance times.

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