The Trade and Compliance Costs Model in the International Supply Chain

Master thesis (2017)

Authors

T. Tuty Arsyida Technology, Policy and Management

Contributors

M.F.W.H.A. Janssen (supervisor 1)
Y. Tan (supervisor 1)
J.A. Annema (supervisor 2)
B.D. Rukanova (coach)
Faculty
Technology, Policy and Management
Copyright: © 2017 Tuty Tuty Arsyida
Design Science Research Information Management Trade Costs Customs Compliance International Trade International Supply Chain Data Pipeline Costs Model
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Published Date

21-08-2017

Language

English

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Faculty

Technology, Policy and Management

Abstract

Trade costs for the international supply chain are enormous, even in the absence of formal border barriers. In fact, the costs involved in moving a container physically are less than half the costs of managing the information about the transport activity. Thus, the physical infrastructure in international trade is fairly efficient, but that is not the case for the information infrastructure.
In addressing the complexity of the border activities, both public and private organizations are interested in making the compliance process more manageable and less costly, while still achieving the same level of security and safety. For the government, a well-managed border activity not only improves the revenue but also promotes the ports and increases their competitiveness. Based on the empirical finding, a 1% reduction in the transactional cost in relation to the border compliance process is worth $43 billion. Therefore, it is necessary for all stakeholders, both private and public organizations, to support an effective and efficient border-related compliance process, which can be done through the IT innovation of the compliance process.