The impact of customs clearance process on logistics efficiency: The case of Modjo customs branch office
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Date
2020-06
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Abstract
The purpose of this study was to assess the impact of customs clearance process on logistics
efficiency the case of Modjo customs branch office. Several studies provide evidence that logistics
services very crucial to facilitate international trade and play an important role in the growth and
development of the local economy. Based on World Bank logistics performance index (LPI)
puts Ethiopia ranked 126th out of 160 countries and in terms of all scores indicators are also
below the averages of the Sub-Saharan Africa region in 2016. The logistics system of the nation
is deteriorating when compared with other countries. The ranking of Ethiopia shows a back
ward spiral between 2014 and 2016, going from 104 to 126 in the rank comparison across 160
countries. One of the main logistics performance indicators among the six components is
efficiency of customs clearance process. Therefore, the aim of the study is to assess the impact of
this customs clearance process on import goods logistics efficiency. To do so, different
theoretical and empirical literature were used as reference. To address the objective of the study
97 questionnaires were distributed to customs employee and customs clearing agent and out of
which 88 were returned. To analysis the finding of the study, Descriptive and explanatory
analysis method were employed and also a quantitative and qualitative approach was used.
From the survey conducted and filled by respondents confirmed that there is customs clearance
delay due to redundancy of goods physical inspection and document checking for a particular
consignment, giving advance information for importers and clearing agent regard with
valuation, tariff classification etc prior to importing of goods to customs compound, lead time of
goods at customs clearance is high. The reluctance of officers in decision making, the branch
tendency of repetitively goods physical examination and other factors contribute to the delay. It
is also confirmed by the study, because of this delay there are additional costs incurred for each
additional clearance delay time. It have been seen on the study that, this all customs clearance
process constraints are impact on import goods logistics efficiency. Finally the study provided
recommendation that help to overcome the main findings of the problem. These are strengthen
risk management to facilitate clearance process, improve information technology (customs
system), integration service with other regulatory agencies and implement international customs
practice.
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Keywords
Customs clearance process predictability, Customs clearance process simplicity, Customs clearance process speedy,, risk management, automation