Saudi customs cooperate to slash delays at border
Long queues of lorries at the border between the UAE and Saudi Arabia may be a thing of the past when the two countries link their customs clearing systems later this year.
Hauliers often experience lengthy delays at the border, creating backlogs of thousands of lorries at a cost of millions of dirhams to business on both sides of the border. "We have an electronic system and they [the UAE] have an electronic system and we will soon integrate the systems so the paperwork can be transferred electronically," said Abdulla Al Rasheed, the Director General of the Saudi Customs Information Centre.
The move would help to cut waiting times for lorries crossing the border at Al Ghuwaifat, he said on the sidelines of the Gulf Petrochemical and Chemical Association Supply Chain summit in Dubai yesterday. The route is a vital trading link between the UAE and Saudi Arabia, as well as for the onward transit of goods across the region.
Customs officials from both countries plan to meet in the coming two months to discuss the final steps for linking up the systems. Slow processing of papers by Saudi border officials was blamed for severe delays last month that led to tailbacks of about 4,000 lorries stretching for up to 20km.
Officials were not recognising the Dubai customs method of paying customs duties electronically without paper, said Zamir Kader, the general manager of Interlink Freight Agency, a Dubai haulier of food and electronic items across the GCC. Duties usually cover about 5 per cent of the value of the load. Queues have since been reduced, but many companies still complain it can take up to 36 hours to cross the border, far longer than it takes at other GCC borders.
"We are sending 40 to 50 trucks a month and each truck costs Dh300,000 [US$81,672] to Dh400,000 in cargo value," said Mr Kader. "Delays are eating into our already low profit margins as trucks are delayed and customers are not happy."
Mr Al Rasheed said Saudi customs were introducing other changes to make the border process more efficient. Separate queues were being created for transit goods, which account for a large amount of border traffic, he said. But other businesses remain sceptical about the likelihood of improvements.
More investment in manpower and resources at the border was required, said S I Mustafa, the vice president of logistics at Almajdouie Group, a transporter based in Dammam of everything from chocolate to construction materials. "If you are applying only three customs people when you need 20 people things will be slow," he said. "Electronic scanning of cargo would also speed things up tremendously." Delays receiving materials sometimes left the firm's customers in the building industry facing penalties for late completion of projects, he said.
While a linking up of clearing systems should help to bolster trade flows, many businesses are looking forward to the full launch of a GCC customs union in 2015. By establishing a free-trade bloc among states, the union should sweep away delays at borders. Instead, countries would follow a unified set of customs procedures agreed by the GCC.
"We won't ask for documents and as long as the trucks don't have prohibitive goods they can come into the country," said Mohammed Al Haif, the director of the GCC customs union department at the GCC General Secretariat. A customs union authority will start work in July to oversee the transition to the union in 2015.
"I look forward to the day when we will be just like Europe and can drive from Germany to Belgium easily without getting out of your car," said Saleh Al Shabnan, the vice president of the global supply chain centre of excellence at Saudi Basic Industries Corporation.