The History of the Dachan Island Customs Unit

In 1840 Hong Kong was ceded to Britain and occupied as a foreign trading port. From then on, trade between Hong Kong and mainland China was regarded as international trade. Later, in 1899, the Qing Government took the logical step of establishing a customs unit at Dachan Island--a port located at the entrance of the Pearl River-to inspect all small trading vessels traveling between Hong Kong, Macau and the Chinese mainland. One hundred years later Dachan Island is still the transportation hub of the complicated river courses of the Pearl River, and the Customs Unit is still the key point for monitoring container vessels that use the river.

In the late 20th century, marine trading between Guangdong, Hong Kong and Macau grew rapidly. During the 1980s, there were only about 100 vessels passing through Dachan Island per day; by 2001 that number had increased to 600. Long queues of vessels were often seen at the entrance to the Pearl River waiting for customs clearance. Inefficient paperwork procedures and the old method of "on-vessel" inspection were the prime reasons for the delays, and started to cause inestimable economic loss. It was obvious that the Dachan Island Customs Unit needed to dramatically improve its operational techniques.

Pros and cons of small vessel transportation

Small vessels that offer large carrying capacity and low operating costs have always been an important means of transportation for traders using the Pearl River. According to official statistics, they carry a total of 77% of all imports and exports cleared by Guangzhou Customs. Reforming the customs clearance procedures for these vessels was obviously a priority for alleviating the "bottle-neck" situations that were developing on the Pearl River. Improvements would not only help shipping companies enhance their operating efficiency, but also provide benefits for traders seeking a competitive edge through faster turnarounds.

However, the shipping efficiency of small container vessels is often quite low, and the submission of manifest data is frequently delayed. Even shipping companies are often unclear about the exact location of the vessels, and traders inevitably have had difficulty controlling their transportation cycles. The net result is that the traditional model for controlling small container vessel transportation had become so outdated that it was out of tune with the rapid developments in China's import and export trade, and the requirements of global logistics. , With the rise of economic globalization and China's acceptance into the WTO, China Customs were confronted with even more challenges.

Speedy customs clearance

To solve the problem before it got to crisis stage, the Guangzhou Customs established the Speedy Customs Clearance System for Hong Kong/Macau Container Vessels , which combines the strengths of the Global Positioning System (GPS), public information platforms and mobile communications technology. This new system has been specifically designed to accelerate customs clearance procedures for small container vessels plying the waters of the Pearl River. Under the system, any Hong Kong/Macau shipping company, or its agent, can utilize an Internet-based public information platform to submit manifest data in advance to the midway monitoring station of Dachan Customs. Based on the category of the vessel, risk analysis of the electronic manifest information and concrete information regarding the vessel's movements, the Dachan Customs will use the GPS customs monitoring system to send out to the vessel one of two commands: "Direct pass" or "Stop for registration". Those vessels which receive the "Direct pass" command can pass straight through the port. Only those which are instructed to stop for registration need to pull in and complete the relevant procedures. According to a survey of key industry players, after the implementation of the new monitoring model the time required for small vessels to travel between Hong Kong and Guangzhou has been reduced from 10 hours to 3.5 hours.

Businesses which have started using the system say they now enjoy faster customs clearances, shortened transportation times, reduced fuel costs and lower risks of accidents resulting from the crowded situation. Shipping companies can also track the current status of their vessels right through to their destination, enabling them to improve their vessel deployment and offer a low input, high return, cost-effective service. In addition, import and export enterprises can, through the public information platform, access information about the vessel's status and delivery time, confirming that the cargoes are being delivered punctually-a major concern for traders who are re-exporting their goods from Hong Kong. They also enjoy benefit from enhanced control over the transportation cycle, which helps lower their overall trading costs. Necessary documents, such as the manifest and bill of lading, are also available in advance for early customs clearance.

How import and export businesses benefit

There are currently over 500 small container vessels using the system in the Guangzhou, Huangpu and Jiangmen Customs districts. The Guangzhou Customs District and the terminals under its supervision have now installed the Manifest Input and Deployment Systems at most clearance points. Manifest data submitted through the public information platform is now converted and confirmed automatically, allowing consignees of import cargos to complete customs clearance procedures well in advance.

Import enterprises which have installed the GPS communications system can complete the customs clearance procedures before reaching the terminal by making use of the information from the system, such as the manifests and bill of lading. Upon reaching the terminal, and following an inspection, the cargo is released. If no inspection is necessary, the company can proceed directly to the lading procedures for an even faster customs clearance.

When a small container vessel which has installed the Global Positioning System starts its trip from a foreign port, it can transmit, via the Internet, an electronic cargo manifest to the mid-way supervision station and public information platform of Dachan Customs. After the direct passing approval from the Dachan Customs is granted, the manifest data will be transferred to the customs clearance system of the customs department. Import and export enterprises or their agents can therefore declare their imported goods in advance. The customs can also review the electronic data and bill of lading, and conduct the customs clearance procedures. After the vessel has arrived at the terminal, the logistics supervision and inspection departments can complete the necessary procedures to release the vessel and its cargo.

China--Hong Kong Cargo Manifest Interface

Given the system's forthcoming launch and implementation across the whole of the province, nearly all small container vessels traveling between Hong Kong and Macau will soon be monitored. The immediate result will be enhanced economies of scale.

The system will also enable effective information and resource sharing through the public information platform of the "China Interactive Customs Declaration Service Platform" and the "China-Hong Kong Cargo Manifest Interface."

Jointly developed by Tradelink and Guangdong Nanfang Communication Group Corporation, the China--Hong Kong Cargo Manifest Interface is intended to solve the problem of double handling of cargo data by river carriers operating between Hong Kong and mainland China. The new system, which operates 24 hours a day, provides a common interface which makes it possible for the carriers to input cargo manifest data just once, and send it to any relevant end user. Importantly, carriers can submit the data electronically to the relevant government departments of Hong Kong and the mainland, which can minimize the data entries normally required to satisfy both authorities.

To promote the application of these systems to all small container vessels traveling between Hong Kong and Macau, the support and participation of the whole industry is necessary. The Customs departments of both Hong Kong and mainland China are committed to partnering with industry players to handle the new challenges that are arising after China's accession into the WTO. The goal is to facilitate greater trade and the shared economic development of Hong Kong and mainland China. We welcome valuable opinions and suggestions from traders, trade management departments and import/export enterprises.