As expressed in the November 2010 Leaders’ Statement in Yokohama, Japan, “Businesses have become larger and multinational in scope, tapping into supply chains that transcend traditional economic and geographic boundaries.”  In addition, Ministers endorsed the Supply Chain Connectivity Framework Action Plan in 2010, and later research as per suggestions laid out in the Action Plan for Chokepoint 3 revealed that SME Logistics Service Providers (LSPs) in the region lack capacity to provide cross-border logistics services consistent with the supply chain needs of new and evolving international business developments. LSPs are a group responsible for a broad scope of supply chain related services including international transport (land, air and sea), terminal handling, cargo consolidation, customs clearance, warehousing, and include 3^rd party as well as integrated logistics service providers. The large majority of SME LSPs surveyed in 2010 continue to operate local supply chains limited to their own economy and borders, while foreign economy information, policies, standards and trade related resources remain unknown and/or inaccessible.

Goals Summary:

The ultimate goal of this initiative will be completion of the web accessible International Logistics Support (ILS) pilot network. This tool represents a sustainable mechanism supporting long-term SME LSP awareness building, capacity improvement, and communication among LSPs and logistics support organizations across the APEC region. It represents a culmination of all the above undertakings, and will be designed to achieve deepened understanding of policy, regulations and logistics processes across economies. The ILS network will ultimately enhance the ability of SME LSPs to provide efficient cross-border logistics supply chain services by providing them with relevant cross-economy information and support with regard to the cross-border trade action of which they are engaging. The network will draw usage by providing a tool that allows SME LSPs to better utilize their existing internal resources and capabilities, and by way of coordination and alignment present information in localized format to afford logistics processes support. This mechanism of LSP facilitation represents an approach to simplifying cross-border trade at the level of logistics processes by providing a centralized means of accessing policies and regulations across economies, and improving LSP ability to understand and operate according to each economy’s requirements; without the need for each economy to align themselves with one set of rules or regulations.

ILS Network Description:

The ILS network will be a cloud based organizational infrastructure with nodes for each economy. Each node will be linked and integrated with a central hub responsible for facilitating communication of cross-border policies, standards, regulations, documentation and other key information access. The central hub is also tasked with matching and converting information provided by each economy into the format that is locally used, and thus understandable by each other participating node economy. The hub is also responsible for maintaining the guidelines and standards for information quality and transfer that shall aid accomplishing this within the ILS network, and additionally will ensure duplications or inconsistencies between nodes (economies) are pointed out. The nodes are responsible for the logistics chain information within their economy, gathering relevant local supply chain information, and exchanging it with the hub according to standard guidelines for quality and information pertinence. They are also responsible for directing SME LSPs who require assistance in their economy.

An additional key benefit of the ILS pilot network is that LSPs can go to this centralized hub for logistics information in a much easier and more efficient way, which in turn will further facilitate communication of LSP needs to government organizations (through notation of information requests) and logistics associations within APEC, while providing a channel for LSPs to be quickly notified of any changes in government policy or standards within participating economies. From the point of view of government policy developers, the ILS platform serves as a window unto the relevant policies of each economy, and the questions posted by the actual LSP users as they encounter and engage in cross-border business as per each. This is a completely open platform, and policy makers will easily be able to see how well the policies of their economy complement or compare with those of other economies.

Primary Deliverables:

Implementation of this initiative is broken down into meeting two major deliverables, of which supporting undertakings will be carried out simultaneously over the 2013 – 2014 period. Both deliverables are dependent on results and conclusions arrived at in 2012 research undertakings. In many instances the following two major deliverables are co-dependent in nature; and are both working towards creating a valuable and relevant international logistics support mechanism that can sustain LSP awareness and capacity building over the long-term.

Major Deliverable 1 (Activities): Train the Trainers & ILS Network Development Colloquia Conferences – Awareness and Knowledge Building, Enhancement of Capacity for Adoption of Advanced Technology and Best Practices, and Advancing Goals Through Application of the ILS Network Tool (2013)

Research and development studies, and training courses will focus on foundational knowledge useful to promote awareness of current and emerging logistics models and business trends; as well as advanced logistics technologies and modern supply chain practices available under existing SME LSP resource availability. Results will be used for ILS network development and development of beneficial conferences. For each conference we will invite each economy to suggest participation of organizations focused on the development of LSP sub-providers, as well as those with valueable industry experience and knowledge regardless of focus group. Consistent with the Guidebook on APEC Projects (ed. 8), the selection of organizations will be based on relevance to research conducted up to that point, and with respect to identifying the best organizations suited to contributing to the goals of the training sessions, and by extension, further development of the ILS network. Coordinating and enhancing local organizations’ ability to train the trainers will be an enduringly effective and pragmatic approach to enhancing LSP sub-providers’ capacity. The longevity of this initiative’s effectiveness will be ultimately furthered with completion of the ILS network as explained in the description of Major Deliverable 2 below.. For conference sessions we will identify key SME LSP development and support bodies (e.g. local logistics associations) in each APEC economy and invite them to the events. LSP sub-providers recommended by each economy are also welcome for consideration.

Spring 2013, Suzhou, China – Suzhou Train the Trainers & ILS Network Development Colloquium: Promoting Awareness of Logistics Models for Emerging International Business, and Adoption of Advanced Logistics and Supply Chain Technologies

This session will focus on building awareness of new logistics models and advanced technologies, and their emerging usage in changing global supply chains as international business needs evolve. Forums held will discuss logistics model research, related technologies and their application to the ILS pilot network in development. Feedback and discussions with the entire APEC community regarding the ILS pilot network in development will also provide necessary critique and guidance. Further discussions will investigate application scenarios under SME LSP existing capabilities and realistic development potential given their prevailing financial, technical and knowledge resources.

Fall 2013, Indonesia –Indonesia Train the Trainers & ILS Network Development Colloquium: Promoting Awareness and Adoption of Modern Supply Chain Practices under Current APEC Economies’ Cross-border Policies and Business Environment

This session will focus on promoting awareness of modern supply chain practices, as well as gain feedback on the to-date effectiveness and design of the ILS pilot network and website usage during the trial period. Training sessions will focus on the governmental policies and overall business environments within the APEC region, and review best practices for operation in these settings. Expert review of the ILS network in trial operation will gauge the platform’s alignment to modern supply chain practices, cross-border policy and business environment. This session will further review and promote best practice examples of cross-border trade using existing SME LSP resources, and focus on how integration of the ILS pilot network may benefit these practices. Key performing logistics models will be presented, while suggested changes and improvements to the new ILS pilot network in development will be reviewed and discussed with all APEC and economy representatives in attendance.

The initial funding provided for this project will be sufficient for implementing the ILS network in pilot economies. Included are development of frameworks and basic information collection, research and development of models, integration of key cross-economy policies and information analysis, facilitating location and adoption of relevant information, as well as development and maintenance of technical infrastructure for the central hub. Once established, keeping information up-to-date and costs of maintaining technical infrastructure at the level of a pilot program should be minimal. China is committed to providing operational funding of the ILS network at the level of a pilot program for the duration necessary to allow its value to the APEC whole to be justified. However, expansion of the network into more economies will depend on level of success and additional funding.

Linkages between primary deliverables:

The purpose of the two conferencesessions are to help build knowledge of advanced cross-border logistics and supply chain models, best practices and logistics technologies, while also creating an immediate short to mid-term channel to improve economies’ understanding of obstacles that LSPs may face when engaging in cross-border logistics business. With regard to the second major deliverable, these two sessions provide a discussion forum where all APEC economies will have a chance to meet together and provide critique and guidance regarding development of the ILS pilot network and related research. The undertakings in the second deliverable build on expert advice and criticism from key operations research domains within the logistics and supply chain realm, thereby leveraged from experts engaging in conference events. With a strong reference to conclusions arrived at in the first major deliverable’s undertakings, the ILS pilot network design and implementation endeavors to address obstacles LSPs face with construction of an informational portal suited to typical LSP capabilities, in which an LSP user may access logistics associations, support groups and other relevant organizational support in each economy regardless of their locality. In turn, this portal will serve as a long-term LSP awareness building and support tool, and the knowledge and usage patterns noted may further support development of future training programs by other related LSP support organizations.