Dagang Net scores a world first


  • Business
  • Monday, 03 Jan 2005

BY STEPHEN BOEY

MALAYSIA, Singapore and Taiwan are pioneering cross-border electronic trade facilitation – the first to do so globally – and in the process have drawn interest from not only developing countries, but also from western Europe. 

“Bangladesh, Pakistan, Nigeria, Syria, and Myanmar have shown interest and have invited us to brief them,” Dagang Net Group of Companies chief executive officer Saifol Bahri Shamlan told StarBiz in an interview. 

“French authorities have also expressed interest, asking questions on how it works, and on the set-up.” 

Saifol Bahri Shamlan

It is all done through the Pan Asian eCommerce Alliance (PAA), whose current members are Tradelink of Hong Kong, Trade-Van of Taiwan, CrimsonLogic of Singapore, KTNET of South Korea, CIECC of China, TEDI Club of Japan, Dagang Net of Malaysia, TEDMEV of Macau and CAT Telecom Public Co Ltd of Thailand.  

Like Dagang Net, which joined the PAA in 2001 (a year after it was formed), the other country representatives also operate value-added networks (VAN). “We come together every quarter to discuss standards, to share data transfer,” said Saifol. 

The first fruits of this alliance are Dagang Net's VAN-to-VAN links to Singapore's CrimsonLogic using a dedicated line, and to Taiwan's Trade-Van over a virtual private network (VPN). Next in the pipeline is Dagang Net's link with Hong Kong's Tradelink.  

CrimsonLogic is also currently working on its link with Trade-Van.  

According to Dagang Net Group director (trade facilitation, business development division) Alvin C.K. Mah, the beauty of PAA is that each member works with its own local authority.  

Yong Voon Choon

“When we deal with Singapore, we don't deal with the Singapore authorities, but with CrimsonLogic.”  

And, CrimsonLogic has put in place its links with the respective authorities in the island state. 

Whatever Customs declaration details entered into the Dagang Net system will be picked up by CrimsonLogic and automatically replicated in documents required by the Singapore authorities, thus cutting down paper work and time and, more importantly, eliminating errors. 

“Other member countries are also beginning to do it ... South Korea, Japan,” said Saifol. “They are not sitting still. But I would like to say our links with Singapore and Taiwan signal the beginning of trade automation in the region.” 

Similar links with the US, Malaysia's largest trading partner, are not likely any time soon, however. Following the Sept 11 incident, the US has been taking a re-look at its import-export procedures. 

Dagang Net has been hopeful of using the direct link now used to facilitate the export of Malaysian textiles and garments to the US. With such Malaysian exports due to graduate from the quota system to the free market next year the link could be a tremendous boon to electronic trade facilitation between the two countries.  

Currently, the electronic trade facility with Singapore and Taiwan for the movement of goods by sea, air and rail only facilitates Customs declarations to the authorities in the respective territories. Other components in the trade and logistics value chain, like certificates of origin, will be gradually included to realise PAA's aim to facilitate efficient global trade and logistics. 

On its part, Dagang Net is two-thirds through its RM20mil upgrade to transform the system originally serving the Port Klang shipping community into a next-generation, Web-based, one-stop trade/supply chain portal to facilitate the nation's international trade. 

Dagang Net has so far spent RM13mil on phases one (hardware upgrade) and two (revamping the operating system and engines). Another RM7mil will be spent under phase three to overhaul the applications system.  

“Our plan is to complete the entire value chain by 2008. Of course, we require the cooperation and participation of all the players here,” said Saifol. “We like to also encourage our partners in this scheme – Customs, port authorities, other government agencies to come together to work towards realising this.” 

On the private sector side alone, the value chain covers exporters and importers; port, inland port and Malaysia-Thailand Landbridge operators; airport ground handlers and freight forwards; forwarding and shipping agents; insurance companies; trade financiers; haulage companies; warehouse operators; and empty depot operators.  

(Consignments sent by road between Malaysia and Singapore via the Causeway and the Second Link, as well as that between Malaysia and Thailand, do not come under the ambit of Dagang Net.) 

On the government side, there are the Customs department; ministries overseeing international trade and industry, and transport; authorities responsible for free trade zones, dangerous goods, certificates of origin; as well as port authorities and the Department of Civil Aviation. 

This one-stop concept – called single window sign-in by the World Customs Organisation, and single administration document in Britain – will also require that the regulatory authorities concerned, including in Malaysia, do some reengineering.  

Together with single window sign-in, Dagang Net is working on online application and processing of various export permits, called e-Permits, said Dagang Net Group general manager Yong Voon Choon.  

It has gone live with the Federal Agricultural Marketing Authority on the issue of permits related to trade in coffee beans and cabbage, and is working on that for other crops. It is also finalising similar arrangements with the pesticides and timber boards. “Currently, there are 19 permits that the Customs may require,” Yong added. 

In addition, users of Dagang Net's value-added services can opt to pay local Customs duties online via electronic funds transfer (EFT).  

“With EFT, we have improved the efficiency of the whole cycle of declaration and duty payment,” said Yong. “Previously, you would have to go to your bank to find out the duty cost and to purchase the bank draft, and to many, many other windows.” 

And once Dagang Net receives the green light from Bank Negara, it will offer cargo insurance online. Its partner in this effort is believed to be Tahan Insurance, a member of Bursa Malaysia-listed Idaman Unggul Bhd.  

“What we are doing now is trying to automate and integrate more and more documentation along the whole trade value chain,” Saifol said, adding that cargo manifests would be next on the list. 

“The end benefit will be not only to the trading community ... the local players; but foreigners will also find it easier to trade with us,” he added. “That should boost Malaysia's position as a trading hub, in addition to being a producing country.”  

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