UNNExT Workshops on Trade Facilitation Almaty, Kazakhstan 4-6 May 2015

UNNExT Workshops on Trade Facilitation
UNNExT Workshop on Trade Facilitation and Paperless Systems for
Agrifood Products
Almaty, Kazakhstan
4-6 May 2015
1
BUSINESS PROCESS ANALYSIS OF THE EXPORT OF CEREAL
PRODUCT FROM KAZAKHSTAN TO AZERBAIJAN
BUSINESS PROCESS ANALYSIS OF EXPORT
CEREAL PRODUCT FROM KAZAKHSTAN TO
AZERBAIJAN
YELENA VASSILEVSKAYA (KAZAKHSTAN)
Workshop on Trade Facilitation and Paperless Systems for
Agrifood Products, Almaty, Kazakhstan, 4-6 May 2015
BUSINESS PROCESS ANALYSIS OF THE EXPORT OF CEREAL
PRODUCT FROM KAZAKHSTAN TO AZERBAIJAN
WHY CEREAL PRODUCT EXPORT FROM KAZAKHSTAN TO AZERBAIJAN
IS IMPORTANT ?
The grain industry is a high priority in the agriculture of Kazakhstan and one of the
leading places in the economy of the country. 90% of the acreage is used for growing
cereals.
Among the CIS countries Kazakhstan is the third largest producer of the grain after
Russia and Ukraine (12,3-15,9 mln. tons in weight after processing). In the production of
flour Kazakhstan takes the leading position in the world.
In the commodity structure export cereal product export (by value) accounts is about
2%. The grain is exported to 44 countries around the world. 44.3% of the total cereal
product export is export to the CIS countries. Export to Azerbaijan takes the largest
volumes (13% of cereal product export of Kazakhstan )
The main importer of cereal product for Azerbaijan is Kazakhstan. the volume of cereal
product import volumes from Kazakhstan increase annually
400000
Import from
other countres
Тыс. $
600000
200000
0
37%
2011
61%
2012
50%
2013
Import from
Kazakhstan
BUSINESS
PROCESS
ANALYSIS
OF THE
OF CEREAL
BUSINESS
PROCESS
ANALYSIS
OFEXPORT
THE EXPORT
OF CEREAL
PRODUCT
FROM
KAZAKHSTAN
TO
AZERBAIJAN
PRODUCT FROM KAZAKHSTAN TO AZERBAIJAN
2. Ship
2.1. 2.1. Obtain import
permit
2.2. Obtain a phytosanitary certificate
1. Buy
Exporter
1.1. Contract
conclusion
USE CASE OF EXPORT CEREAL
PRODUCT
Azeri Sanitary
Inspection
Inspection in the
agricultural
sector
2.3. Confirmation of
obligation supply grain
to the state resource
Research
laboratory
2.4. Obtain a certificate
of conformity
KazakhstanR
ail ways
Certification
bodies
3. Pay
Exporter's
Bank
2.5. Arrange transport
and transportation
3.1.Establish
Importer's
payment
Bank
guarantee
3.2. Claim
payment for
goods
Importer
Importer's
Bank
Russian Fright
forwarder
2.6. Loading and custom
declaration
2.7. Border crossing of
Russia
Owner of
cars
Kazakhstan
Customs
Sanitary
Inspection
2.8. Border crossing of
Azerbaijan
Russian Rail ways
and other control
2.9. Unloading cargo
and Custom declaration
Azeri
Customs
3 process areas of supply chain:
• Sale - 1 business process
• Delivery – 9 business processes
• Payment - 2 business process
19 stakeholders
Azeri Rail
ways
BUSINESS PROCESS ANALYSIS OF THE EXPORT OF CEREAL
PRODUCT FROM KAZAKHSTAN TO AZERBAIJAN
MAIN DELIVERY ROUTES OF CEREAL PRODUCT EXPORT FROM
KAZAKHSTAN TO AZERBAIJAN
BUSINESS BUSINESS
PROCESS ANALYSIS
THE EXPORT
CEREALOF CEREAL
PROCESS OF
ANALYSIS
OF THEOFEXPORT
PRODUCT PRODUCT
FROM KAZAKHSTAN
TO
AZERBAIJAN
FROM KAZAKHSTAN TO AZERBAIJAN
The organization supplies the most complicated process. It can be carried out from the
northern regions of Kazakhstan to Azerbaijan: автотранспортом (обычно не
используется из-за высокой стоимости)



By railway through Russia
By two types of transport: by railway to the port of Aktau, and then across the Caspian
Sea to the port of Baku (overload at a terminal in the port)
By road transport (generally not used because of the high cost)
The study examined the delivery by railway. A rather complicated process: it takes 15 days
in the coming months to apply for transportation.
Calculating the cost and time transportation of cereal product from Kazakhstan to
Azerbaijan by railway
Country
Kazakhstan
Russia
Azerbaijan
Total:
Wagon cost
Route
Country of
origin
Kustanay
Kigash
Yalama
Destination
D. Nurpeisov
Samur
Baku-Tovarnaya
Distance in
km
1558
748
205
Transit time, days
Cost in $
906
1780
820
3526
operation 670
rent 1650
Total for carriage
Average
8
4
2
14
Actual
6
2
1
9
Exporter
Certification bodies
Research laboratory
BUSINESS
PROCESS ANALYSIS
THE EXPORT
CEREALOF CEREAL
BUSINESS
PROCESS OF
ANALYSIS
OF THEOFEXPORT
PRODUCT PRODUCT
FROM KAZAKHSTAN
TO
AZERBAIJAN
FROM KAZAKHSTAN TO AZERBAIJAN
2.4.1. Submit application for
confirmation of compliance
Application
2.4.4. Conclusion of Contract on
certification services and
procedures
2.4.5. Payment for services of
conformity
Payment receipt
Core business process area 2.4.
“OBTAINING CERTIFICATE OF
CONFORMITY”
2.4.2. Registration of application
2.4.3.Conclusion of Contract on
certification services and
procedures
Stakeholders:
Exporter (Applicant)
Body of conformity (Certifying agency)
Testing laboratory
contract for works on
certification
2.4.6. Identification of cereals
samples quantity and sampling
requirements
2.4.7. Cereals sampling, product
sampling acts
Consists of 12 steps
Average time required: 12 days
Cost: 68$
Sampling act
2.4.9. Attendance in sampling
process
2.4.8. Pack cereals samples in
presence of applicant for
submission to laboratory
2.4.10. Testing arrangements
and test protocol
2.4.11. Checking conformity with
existing requirements
Test protocol
not
conformity
Output and criteria to exit the
business process: Exporter holds
Certificate of Conformity and copies
of test protocols for his cereal
products
conformity
2.4.12. Registration of Certificate in
data base
2.4.13. Obtain of Certificate of
Conformity
Certificate of Conformity
Regulation: 6 regulatory
documents
Shipper (Exporter) or
Freight Forwarder
Kazakhstan Rail ways
Owner of Rail cars
BUSINESS BUSINESS
PROCESS ANALYSIS
THE EXPORT
CEREALOF CEREAL
PROCESS OF
ANALYSIS
OF THEOFEXPORT
PRODUCT PRODUCT
FROM KAZAKHSTAN
TO
AZERBAIJAN
FROM KAZAKHSTAN TO AZERBAIJAN
Russian Fright forwarder
2.5.1. Apply for carriage
Core business process area 2.5.
“ОРГАНИЗАЦИЯ ПЕРЕВОЗКИ”
E-application
2.5.2.Obtain
consigner’s
code
2.5.3. Obtain
approval for
application
Consigner’s 4digit code
Obtaining approval
for application and
date of dispatch
Stakeholders:
Exporter
Kazakhstan Railways
Owner of rail cars
Russian Freight forwarder
2.5.4. Search for
competitive wagon costs
2.5.5. Conclude a wagon
service contract, payment
of service
Consists of 13 steps
Average time required: 15-45 дней
Cost: ≈5000$ per car (60 т)
2.5.6. Conclude a wagon
service contract
Wagon service
contract
2.5.7. Search for
competitive freight
forwarder costs
2.5.9. Conclude a carriage
contract with Russian
Railways
2.5.8. Conclude a freight
forwarding contract
Freight forwarding
contract through Russian
territory
2.5.10. Cost calculation
2.5.11. Transfer of funds to
Railway’s bank account
Set of documents for signing
a carriage contract
2.5.12. Availability of funds
to cover carriage costs
Output and criteria to exit the business
process: Exporter holds:
 whole set of documents associated with
the carriage
 sufficient funds on Kazakhstan Railway’s
bank account
 wagons
 contract with Russian freight forwarder
and pays for goods transit through
Russian territory
Regulation: more that 10
regulatory documents
Exporter
KazakhstanRail ways
Owner of cars
Sanitary Inspection
BUSINESS BUSINESS
PROCESS ANALYSIS
THE EXPORT
CEREALOF CEREAL
PROCESS OF
ANALYSIS
OF THEOFEXPORT
PRODUCT PRODUCT
FROM KAZAKHSTAN
TO
AZERBAIJAN
FROM KAZAKHSTAN TO AZERBAIJAN
Customs
2.6.1. Confirm available
funds of shipper
Схема бизнес-процесса 2.6. “ЗАГРУЗКА
ВАГОНА, ТАМОЖЕННОЕ
ДЕКЛАРИРОВАНИЕ И ОЧИСТКА”
2.6.2.Notify date and
place of carriage
2.6.3. Pay for wagon
service
2.6.4. Preparation of
wagon for loading
2.6.5. Pay of customs
fees
Payment receipt
2.6.7. Assign the
inspectors to the place of
loading at scheduled date
2.6.10. Delegate of official
to place of loading
2.6.6. Complete of
customs declaration
Сustoms
declaration
2.6.11. Complete of
OSGD consignment note
enclosed with a set of
required documents
2.6.8. Wagon feed at
scheduled date and
designated place
2.6.13. Supervision of
loading
2.6.9. Supervision of
wagon arrangements
2.6.14. Supervision of
loading, availability of
documents
2.6.15. Supervision of
loading
Stakeholders:
Exporter
Kazakhstan Railways
Owner of rail cars
Plant quarantine inspector
Kazakhstan customs
2.6.12. Load of cereals
Consists of 24 steps
Average time required: 1-2 days
Cost: ≈495$ per car (60 т)
2.6.16. Check weight of
goods, completion of
documents, seal of
wagon, put information to
OSGD consignment note
OSGD consignment
note
2.6.17. Check shipping
and loading documents
No
acceptable
acceptable
2.6.18. Check shipping
and loading documents
No
acceptable
acceptable
2.5.20. Accept of goods
by stamping shipping
documents
2.6.19. «Exit allowed»
stamp
Shipping
documents
Output and criteria to exit the business
process:
Exporter (consigner) dispatched goods
by railway transport
Exporter holds original set of stamped
shipping and customs documents
2.6.21. Withdrawal of funds
from bank account
2.6.22. Withdrawal of
wagon for train
composition
2.6.24. Dispatch of wagon
with notification to railways
administration
2.6.23. Notification to
Russian customs
authorities
Regulation: 9 regulatory
documents
BUSINESS PROCESS ANALYSIS OF THE EXPORT OF CEREAL
PRODUCT FROM KAZAKHSTAN TO AZERBAIJAN
40
TIME-PROCEDURE CHART FOR EXPORT CEREAL PRODUCT
FROM KAZAKHSTAN TO AZERBAIJAN
Day
2,50
36 DAYS
35
13,00
- Processes in Azerbaijan
- Processes Kazakhstan
30
1,00
25
20
7,00
4,50
15
10
2,50
1,50
1,00
3,50
10,00
1,25
6
5
Procedure
0
0.51.1
3.1
2.5 2.1
2.2
2.3
4.5
2.4
1.1. Conclude sales contract and trade terms
3.1. Establish payment guarantee
2.1. Obtain a permission to import
2.2. Obtain a phyto-sanitary certificate
2.3.Confirmation of supply grain to the state resources
2.4.Obtain a certificate of conformity
6.5 2.5
2.6 8.5 2.7
2.8 10.5 2 .9
3.2 12.5
2.5. Arrange transport
2.6.Loading of rail car and custom declaration and clearance
2.7. Border crossing of Russia and transportation
2.8. Border crossing of Azerbaijan
2.9. Unloading and Custom declaration
3.2. Claim payment for goods
BUSINESS PROCESS ANALYSIS OF THE EXPORT OF CEREAL
PRODUCT FROM KAZAKHSTAN TO AZERBAIJAN
COST-PROCEDURE CHART FOR EXPORT CEREAL PRODUCT
FROM KAZAKHSTAN TO AZERBAIJAN
Cost, $
8000
7140 $
7000
800
- Processes in Azerbaijan
- Processes Kazakhstan
6000
4956
0
495
453
0
5000
4000
3000
2000
1000
13
0
1.1
0.5
16
288
3.1
2.1
2.5
0
25
2.2
2.3
4.5
68
2.4
1.1. Conclude sales contract and trade terms
3.1. Establish payment guarantee
2.1. Obtain a permission to import
2.2. Obtain a phyto-sanitary certificate
2.3.Confirmation of supply grain to the state resources
2.4.Obtain a certificate of conformity
Procedure
6.5
2.5
2.6
8.5
2.7
2.8
10.5
2 .9
3.2
12.5
2.5. Arrange transport
2.6.Loading of rail car and custom declaration and clearance
2.7. Border crossing of Russia and transportation
2.8. Border crossing of Azerbaijan
2.9. Unloading and Custom declaration
3.2. Claim payment for goods
BUSINESS PROCESS ANALYSIS OF THE EXPORT OF CEREAL
PRODUCT FROM KAZAKHSTAN TO AZERBAIJAN
РЕКОМЕНДАЦИИ ПО ОПТИМИЗАЦИИ ТОРГОВЫХ ПРОЦЕССОВ
области
бизнес-процесс
Buy
1.1. Conclude sales contract
рекомендации
• To sign a contract with the use of electronic signature by
EDS)
результат
• reduce the time to 2-3 days
• reduce the time to 1-1,5 days
2.1. Obtain Import Permit
• exclude
2.2. Obtain Phyto-sanitary
Certificate
Shipment
2.4. Obtain Certificate of
Conformity
• application and conclusion contract On-line with EDS
• the development of a unified software and regulations for
use its for payment and receive results (certificate) through
Internet.
• reduce the time to 1-1,5 days
•reduce the time to 10-50 days
• changing the timing of application (transportation planning)
•reduce cost
• finalize legislation to clarify the requirements
• optimization of the use of cars
•reduce the time to 0,5 day
2.6. Loading of rail car, custom • the use of electronic transport documents and electronic
declaration
declaration with EDS
2.5. Arrange transportation
2.7: Crossing of Russian Border • development software for exchange electronic transfer
sheets between railways
• reduce the time up to 5 hours
• development software for exchange electronic transfer
sheets between railways
• Electronic exchange of information between customs
• reduce the time up to 5 hours
2.8: Crossing of Azerbaijan
Border
Pay
• Improvement of the legislation of Azerbaijan on the
• reduce the time
recognition of Kazakhstan certificates, now reissued them at
the border
2.9: Unloading and Custom
declaration formalities
• exclude VAT
•reduce cost
3.1. Establish payment
guarantee
• optimizing the cost of banking services
•reduce cost
BUSINESS PROCESS ANALYSIS OF THE EXPORT OF CEREAL
PRODUCT FROM KAZAKHSTAN TO AZERBAIJAN
SUMMARY
Implementation of measures on optimization of trading processes
will REDUCE:
delivery time up to 20 days
to estimate the cost reductions necessary to analyze the tariff
policy
OPTIMIZATION OF
TRADING PROCESSES
WILL REDUCE: COST
CEREAL PRODUCT AND
DELIVERY TIME