Supply Chain Security: Benefits for the Socio-Economy

Proceedings of 7th Transport Research Arena TRA 2018, April 16-19, 2018, Vienna, Austria Supply Chain Security: Benefits for the Socio-Economy Kerstin Lange a, Rainer Müller b, Nils Meyer-Larsen b, Juha Hintsa c a b Jade University of Applied Sciences, An der Weinkaje 5, 26931 Elsfleth, Germany Institute of Shipping Economics and Logistics, Barkhausenstraße 2, 27568 Bremerhaven, Germany c Cross-border Research Association, Route de la Chocolatière 26, 1026 Echandens, Switzerland Abstract Maritime Intermodal door-2-door supply chains are complex as many different actors are involved. Beside legal supply chain actors also criminals use logistics transport networks for their operations. For example, illicit narcotics, weapons and counterfeited products are smuggled in these supply chains. There are already mitigation measures for maritime security in place but there is still need for improvement in order to reduce the volume of illicit transports and the social damages related to it. Customs authorities focus on these illicit activities in order to detect and to limit damage to the society. The main aim is to ensure safety and security in international trade. Therefore, customs authorities use risk targeting systems which are based on customs declaration data and intelligence systems to detect high risk trade flows. High quality data has to be used to detect these illicit trade flows. However, today the quality of data is lacking. The CASSANDRA project developed a data pipeline approach to improve the data quality by sharing data between all legal supply chain actors, including businesses and authorities. During the project a socio-economic cost benefit analysis was carried out. A matrix specially designed for the evaluation of improvement of security in maritime supply chains was developed to assess the benefit generated by the data pipeline. The implemented methodology approach for a quantitative assessment considers criteria like risk indicators (available data on which customs decide to inspect a container), kinds of damages (e.g. damages due to smuggling of narcotics or weapons) and inspection rates. For the validation of the methodology interviews with different European customs authorities were carried out. The execution of socio-economic cost benefit analysis was carried out twice: with and without the implementation of the data pipeline approach. Thus, the damage for the socio-economy, which is already prevented by customs (as-is situation), and the possible improvements through the CASSANDRA approach (tobe situation) was compared. Keywords: Supply Chain Visibility; Customs; Maritime logistics; Security; Socio-economic benefits. Kerstin Lange, Rainer Müller, Nils Meyer-Larsen, Juha Hintsa / TRA2018, Vienna, Austria, April 16-19, 2018 1. Introduction In global supply chains, visibility is an important factor for the efficiency of international trade. The transport of goods across borders is highly regulated: governmental authorities like customs have to ensure the safety and security of the society. Consequently, customs control incoming flows for example on tax fraud, smuggled goods and counterfeited products. In addition, since 9/11 certain measures have been implemented to tackle the risk of terroristic attacks. Governmental authorities have the contradictory objective to ensure security and at the same time to facilitate trade. In order to execute this control function customs need data from businesses for the risk assessment in order to detect high risk trade flows. For the risk assessment of customs and further border agencies, data of commercial documents such as purchase order, packing list, bill of lading and manifest is used. This data is captured mainly upstream in the supply chain and is used at many stations during the whole transportation process. Some of the data elements are held in documents and are not captured electronically. Thus, the documents have to be copied and also typed into different IT systems. If the data is available in IT systems customs should be able to “piggy-back” on the data which is used in the supply chain. Needed data could be retrieved from the data pipeline – one of the key concepts of the CASSANDRA project. The data pipeline integrates and interfaces information systems in order to share data from various sources in an interoperable way. Data about organizations and people, the goods and commercial transactions are shared amongst supply chain actors as well as with customs and other governmental agencies (see Hesketh (2009) and Van Stijn (2011)). The data can be visualised by dashboards. In addition, instead of using aggregated data CASSANDRA focussed on the usage of data upstream from the source in order to improve data quality. In detail, most of the data which is required for the risk assessment of customs is known by the consignor. Consequently, the data pipeline uses the data which has been generated at the Consignment Completion Point as a result of the negotiations between buyer and seller. The data pipeline principle enables customs to improve their risk assessment and to detect high risk trade flows. Sharing data by using the data pipeline showed various benefits for businesses. Consequently, a socio-economic cost benefit analysis was executed in order to evaluate the benefits of the data pipeline in the field of socioeconomic risks. This paper presents a selection of negative socio-economic impacts of common illicit cross-border flows in order to describe maritime supply chain risks from this point of view. In addition, it describes the methodology how the evaluation of the socio-economic cost benefit analysis on the data pipeline approach has been carried out. Next, the result of the execution of the socio-economic evaluation is given. Finally, a conclusion sums up the results of this research. 2. Negative socio-economic impacts of common illicit cross-border flows The purpose of this subchapter is to explore a variety of negative socio-economic impacts of multiple illicit flows in the context of cross-border supply chains, with the underlying assumption that the CASSANDRA approach may play a role in the future in reducing such illicit flows and activities. Based on the literature in illegal activities in global supply chains, as well as supply chain security, one can identify several types of illicit flows (see Männistö (2014), Hintsa (2012) and Hintsa (2011)) which are described in this chapter. In socio-economic impact assessment literature following “negative impact areas” are commonly identified and discussed: (i) losses in governmental revenues, including indirect and direct taxes; (ii) increases in health care and social security costs; (iii) increases in law enforcement, investigation, legal system and similar costs; (iv) increases in reversible and irreversible human suffering; (v) increases in reversible and irreversible damages to the nature; and so forth. Kerstin Lange, Rainer Müller, Nils Meyer-Larsen, Juha Hintsa / TRA2018, Vienna, Austria, April 16-19, 2018 2.1. Smuggling for fiscal fraud The unresolved problem of general VAT and customs duty fraud is a big challenge facing the EU. VAT fraud covers a wide range of goods including railway vehicle components, scrap metal, new and used cars, precious metals, footwear, fuels, Renewable Energy and Renewable Obligation Certificates, mobile phone credits and metal allocations. Coming to general duty fraud, the European Anti-Fraud Office (OLAF) has identified three common instruments for evading customs duties: (i) misdeclaration of origin; (ii) misdescription of goods; and (iii) misuse of the transit system (EC (2013b)). The total losses to the EU budget resulting from the three kinds of illicit activities have been estimated at 185 million EUR annually (EC (2013b)). Well known example of fiscal fraud is cigarette smuggling which has substantial financial impacts on EU budgets. Tax fraud through cigarette smuggling costs the EU and the Member States around 10 billion EUR per year (EC (2013)). Next to the direct fiscal losses, cigarette tax fraud has direct consequences on human health. 2.2. Trafficking in counterfeit products Counterfeit products put public health in jeopardy. Due to compromise on quality, fake commodities often contain toxic substances and other elements dangerous to the human body. For instance, counterfeit cigarettes contain much higher levels of tar and nicotine than genuine brands. Fake batteries, cigarette lighters and mobile phones are susceptible to explosion (see UNODC (2010) and EUROPOL (2013)). The illegitimate practice of counterfeiting leads to severe losses in government revenues. Fake commodities undermine the tax base by evading customs duties and sales tax through smuggling and informal retailing (UNODC (2010)). Counterfeits adversely impact the economy by triggering unemployment and hampering innovation. As lawful businesses lose competitiveness, with bogus companies selling cheaper imitations on the market, they cut down on retail and manufacturing jobs in their sector. Reduced competitiveness impacts reinvestment and ultimately leads to loss of innovation (EUROPOL (2013)). 2.3. Trafficking in narcotics Drugs like cocaine, heroin and cannabis are addictive stimulant. Especially international cocaine trafficking is very good organized and a large-scale crime operation. The total value of the global cocaine market was estimated at 88 billion USD in 2008 (UNODC (2010)). Besides driving up health costs, drug addicts have high rates of unemployment leading to loss of human potential and productivity, and ultimately losses in tax revenues to the government (UNDCP (1995)). The average annual costs to society per drug addict were estimated to be around 23,100 USD. Premature deaths, loss of income and reduced productivity were not included in the calculations (UNDCP (1995)). 2.4. Trafficking in counterfeit pharmaceuticals The global distribution of counterfeit medicines has reached alarming proportions. According to the WHO, around 10 percent of the global medicine supply is counterfeit, rising to 30 percent in the developing world. While the empirical basis of these estimates is unclear, it gives us an indication of the magnitude of the problem (UNODC (2010)). Reports claim closing down 9000 unlicensed manufacturers and eliminating 388 counterfeiting operations in 2007 only in China. The estimated value of the confiscations is claimed to be approximately 35 million USD in 2006 and 25 million USD in 2007. FDA (The State Food and Drug Administration) seizures are supposed to account for less than 5 percent of counterfeit production, worth about 500 million USD. This illegal activity implies fiscal losses to the State, mostly visible through lost tax revenues as legitimate companies experience a reduction in sales (UNICRI (2012)). Kerstin Lange, Rainer Müller, Nils Meyer-Larsen, Juha Hintsa / TRA2018, Vienna, Austria, April 16-19, 2018 2.5. Trafficking in polluting substances “Ozone depleting substances” (ODS) are one of the greatest pollutants linked to soil, water and air contamination. Probably the most worrying impact has been the thinning of the ozone layer. Currently the EU has strong regulations geared towards reducing its consumption of ODS. But despite these efforts the controlling mechanisms are easily circumvented and the illicit trade of ODS continues to thrive (UNEP (2011)). 2.6. Trafficking in quota-restricted commodities An import quota is a trade protectionist measure that sets a quantitative restriction on the amount of goods that can be imported into a country within a given period of time. Illicit trafficking of quota-restricted goods can harm the national economy in numerous ways. Mainly, the smuggling of quota-restricted goods will hurt the domestic industry. 2.7. Trafficking in stolen goods Global supply chains play a dual role when it comes to theft of cargo / goods / property / assets. Firstly, supply chain companies - including manufacturers, distribution centres, retailers, and transport carriers – become commonly victims of cargo theft; e.g. in European Union it is estimated that the annual economic losses total to 8.2 billion Euros, while in the US an estimated $30 billion in cargo is stolen annually. 2.8. Trafficking in stolen cultural property According to INTERPOL, today the theft of cultural objects affects developed and developing countries alike. Practices of looting, theft and illegal exports affect museums, public and private collections, cultural institutions, places of worship as well as archaeological sites worldwide, are causing irreparable damage to cultural heritage, according to UNESCO. 2.9. Trafficking in small arms and light weapons Small arms and light weapons (SALW) are defined as the weapons, which can be operated and transferred by single persons, as opposite to “heavy weapons”. SALW are seen as highly negative due to economic and physical / physiological long-lasting damages. SALW related violence keeps robbing communities of scarce public health resources, and impedes opportunities for investment and rebuilding after conflict (SAWG (2006)). Globally, since 1990 SALW has cost the lives of approximately 4 million people and have forced over 18 million people to leave their homes and countries (EU (2006)). 2.10. Trafficking in endangered wildlife The most visible impact of trafficking of endangered wildlife species is the potential threat of extinction. Poaching and trafficking activities have led many species to be critically endangered. The dwindling and elimination of animal species has a spiralling effect on the tourism industry of source regions, like Africa. The continent, known for its exotic wildlife and unique biodiversity, draws tourists across the globe. The reduction or loss of these natural resources can affect the tourism sector, where hotels, restaurants, rentals etc. suffer and national economic growth is hampered. 2.11. Human trafficking According to UNODC (2009) one of the most pernicious forms of human exploitation and subjugation is the trafficking of human beings. People are usually trafficked for purposes of sexual exploitation, bonded labour, slavery, forced begging by children, warfare, removal of organs and so forth. Besides the loss of human resources and future productivity in the source country there are considerable losses to government treasures as the illicit wealth accumulated do not contribute to income taxes, health or social security funds. In addition, human trafficking imposes costs on the police authorities, the prosecution services, criminal courts, penitentiary and probation services and so forth. Kerstin Lange, Rainer Müller, Nils Meyer-Larsen, Juha Hintsa / TRA2018, Vienna, Austria, April 16-19, 2018 3. Methodology approach for socio-economic cost benefit analysis The goal of this socio-economic cost benefit analysis is to quantify the benefit, which is generated for the socioeconomy through the CASSANDRA approach. Therefore, the damage for the socio-economy, which is already prevented by customs (as-is situation), and the possible changes through the data pipeline approach, are compared (to-be situation). The difference of both values (actual prevented damage and possible prevented damage because of data pipeline approach) is the benefit for the socio-economy through the CASSANDRA approach. For this evaluation two different methodologies have to be distinguished. Because of legal regulations it was likely, that customs could not provide a full set of quantitative data for an assessment of the social-economic costs and benefits. Therefore two methodologies have been developed. On the one hand a special matrix structure was developed for a detailed, quantified assessment. On the other hand a methodology – similar to a cost-utility analysis – was developed for assessing qualitative data. First, the methodology for assessing quantified data is described. Second, the methodology for assessing qualitative data is explained. The required data for both methodology approaches were determined by literature research and interviews of custom authorities (see chapters 2 and 4). The analysis was performed on the basis of the containers, which are actually checked by customs. An evaluation of the CASSANDRA approach based on the whole container traffic would have required accurate data about the transported goods of every container. As there was and is not enough data available, the analysis was based on the inspected containers by customs. 3.1. Methodology approach for quantitative assessment In order to realize a quantitative evaluation a matrix for the socio-economic cost benefit analysis has been developed. Figure 1 shows the matrix as well as the relevant factors. Kind of Damage (j=1 to m) Kind of Damage 1 ... Kind of Damage m Risk Indicator Risk indicator 1 Detection Inspection Rate Rate (IRi) (DRij) IR1 DR11 Level of Exposure (LEij) LE11=IR1 x DR11 ... ... Detection Rate (DRij) DR11 Level of Exposure (LEij) LE11=IR1 x DR11 ... ... ... ... ... ... ... Risk indicator n IRn DRn1 LEn1=IRn x DRn1 ... DRnm LEnm=IRn x DRnm Sum of exposure ΣLEn1 ΣLEnm Consequences (Cj) Number of inspected containers with risk indicator (NCR) Avoided Damage Fig. 1 Evaluation matrix C1 Cm NCR C1 x NCR x ΣLEn1 C1 x NCR x ΣLEnm Kerstin Lange, Rainer Müller, Nils Meyer-Larsen, Juha Hintsa / TRA2018, Vienna, Austria, April 16-19, 2018 The socio-economic evaluation of the CASSANDRA approach is dependent on the following factors and their correlation:  (1) Kind of damage  (2) Risk Indicator (RI)  (3) Inspection rate (IRi)  (4) Detection rate (DRij)  (5) Level of exposure (LEij)  (6) Sum of exposure  (7) Consequences (Cj)  (8) Number of containers with risk indicator (NCR)  (9) Avoided Damage The criteria kind of damage 1..m, consequences, risk indicator 1..n, inspection rate, detection rate and number of containers with risk indicators are factors, which have been determined by literature research or interviews of custom authorities. The factors level of exposure, sum of exposure and avoided damage are calculated by using the criteria mentioned above. (1) For a detailed analysis, the damage for the socio-economy, which is prevented by customs, has to be divided into sections of different kinds of damage. Customs are searching for many different misdeclared, forbidden and smuggled goods. Each of these goods causes a specific kind of damage to the economy. Because of that and because of the fact that the impact of the CASSANDRA approach may vary on the different kinds of damage, they have to be distinguished in the socio-economic cost benefit analysis. Typical kinds of damages are for example smuggling of drugs or weapons. For a detailed overview of the kinds of damages see chapter 2. (2) For each container, which is leaving but especially entering the country or the EU respectively, customs evaluate if it could contain any risks for the society or not. For this, customs examines the available data of the container. On the basis of these data customs decide if a container is stopped and inspected. These specific data are referred as risk indicators. If one or more risk indicators are fulfilled or given, the container is stopped and inspected by customs. On the basis of literature research and analysing the data provided by the customs dashboard, a set of risk indicators have been identified overall. Furthermore these risk indicators can be categorized to three main groups. These groups are:  Unknown or suspicious parties  Locations and transport  Goods and equipment Table 1 shows the three groups as well as the allocated risk indicators. (3) Each risk indicator is associated with an inspection rate. Customs do not inspect 100% of the containers. They only inspect a container, if risk indicators are given. The inspection rate indicates the share of the inspected containers due to an essential given risk indicator. For example, assuming that there are just three risk indicators, the distributions of the inspections could be the following: 20% of the containers are inspected because of the given indicator of an unknown consignee. Another 10% of the containers are inspected because their consignor is unknown. The remaining 70% of containers are inspected because of an unsafe country of origin. (Note that in order to illustrate the term inspection rate the values above are just examples.) (4) During custom’s search for the kinds of damages, customs evaluate each container based on the above mentioned risk indicators. If a container is stopped and checked, the detection rate indicates the percentage of inspection, in which actually a potential damage or harm to the socio-economy is detected. When a container is stopped for examination it is unclear which kind of damage the container may create. Only during the actual examination through customs it can be determined whether a kind of damage exists, and if so, what kind of damage the container generates. Therefore, for the evaluation of the CASSANDRA approach benefits, an individual detection rate for every combination of risk indicator and kind of damage has to be determined. In particular, if a container is examined because of an unknown consignee, the container may contain weapons, drugs or other, but it could also be completely ordinary and therefore be safe. As an example to explain the term Kerstin Lange, Rainer Müller, Nils Meyer-Larsen, Juha Hintsa / TRA2018, Vienna, Austria, April 16-19, 2018 inspection rate: If a container is inspected because of an unknown consignee, in 3% of all cases customs detect weapons. In 2% of all cases customs detect drugs. In the remaining 95% of all cases customs do not detect anything suspicious. So the detection rate for the combination of unknown consignee and smuggled weapons would be 3% and accordingly 2% for unknown consignee/smuggled drugs. (Note that in order to illustrate the term inspection rate the values above are just examples.) (5) The level of exposure is a measure of the probability of exposing a kind of damage based on the combination of a specific inspection rate and detection rate for a kind of damage. Multiplying the values of the inspection rate and detection rate generates it. (6) According to the combination of the different risk indicators for each kind of damage there are dedicated levels of exposure for each kind of damage. These different levels of exposures are summarized to get a sum of exposure for each kind of damage. (7) Basically, the consequences are the sum of all quantified monetary direct costs per container with any kind of damage, which will arise if the customs are not able to stop the risky container respectively to prevent the damage. These consequences are dependent on each kind of damage. So there is a specific consequence for each kind of damage. For example the consequences that occur due to drug smuggling are costs of the medical care of drug addicts, police investigations etc. However, the consequences of trademark infringements consist of different cost drivers or costs. So for each kind of damage different consequences have to be considered. An overview of the different consequences according to each kind of damage is given in chapter 2. (8) The number of containers with risk indicator is the number of containers which are inspected by customs. Assuming that customs will always inspect as many containers as they are capable of, the number of containers with risk indicators equates the maximum inspection capacity of customs. (9) By multiplying the sum of exposure, the consequences and the number of containers with risk indicators this will result in an overall avoided damage for each kind of damage. Very important Freight Forwarder Not important Shipper Very important Cargo Handling Agent Not important Consignee Very important Sealing party name Important DUNS Data Very important Unsafe Country of Origin Very important Acceptance (Start of transport) Not important Locations & transport Origin (Port of departure) Very important Last port of call (Discharge) Delivery (End of transport) Important Important Tracking Information (Map) Not important Indicated container content Very Important Full or Empty indicator Seal Condition Code Important Not important Unknown or suspicious parties Consignor Goods & equipment Table 1. Correlation between risk indicator and its importance for identifying high risk cargo CateRisk indicator Relevance for Gory inspection detection Kerstin Lange, Rainer Müller, Nils Meyer-Larsen, Juha Hintsa / TRA2018, Vienna, Austria, April 16-19, 2018 3.2. Methodology approach for qualitative assessment By definition, the benefit analysis is used for the “identification, measurement, and evaluation of the expected outcomes of available or proposed alternatives.” It is a quantitative nonmonetary method for analysing different options in a decision situation. For the evaluation of the benefits of the CASSANDRA approach, the benefit analysis was customized (see Figure 2). For an adapted benefit analysis, the following steps have been accomplished:  Definition of the scenarios to be compared: as-is and to-be situation.  Definition of the target criteria: These criteria are the risks, which should be prevented by customs. The criteria are described in chapter 2.  Weighting of the target criteria: In the interviews with the customs authorities, the target criteria mentioned above were weighted using a scale from 0 (not relevant) to 4 (very important), see Table 2. Table 2. Weighting of target criteria Value 0 1 2 3 4 Meaning Kind of Damage is not relevant Kind of Damage is relevant Kind of Damage is more relevant Kind of Damage is important Kind of Damage is very important  Rating of the customs´ ability to mitigate each of the damages: Here, for each scenario customs were asked to assess their efficiency of limiting the damages. A scale from 1 (very poor) to 5 (very good) was used. Table 3. Rating of the customs´ ability to mitigate each of the damages Value 5 4 3 2 1 Meaning Very good Good Ok Poor Very poor  Weighted Rating: In this step, the tool developed for the assessment multiplies the weight and the rating of each target criteria.  Benefit Value: Finally, these weighted ratings are added up to get the final benefit value. The values of the scenarios can be compared and discussed. 4. Execution of the socio-economic cost benefit analysis The evaluation was carried out by interviewing the involved custom authorities in the CASSANDRA project respectively the Living Labs (demonstration phases in the project). In dedicated meetings UK Customs and Dutch Customs were interviewed and asked for the data regarding the custom procedures in the “as-is-situation” (without the data pipeline) and the “to-be-situation” (with the fully implemented use of CASSANDRA). The results of the Dutch and UK Customs’ interviews were validated in a second step by an interview with a former officer of German Customs. 4.1. Results of the quantitative evaluation of the CASSANDRA approach As expected, customs were unable to provide fully quantitative data which would be required for a quantitative assessment. Legal restrictions bind customs to secrecy for every data which could lead to any crucial information to be misused. Therefore a quantitative assessment of the benefits by using the methodology described in section 3.1 could not be realized. Kerstin Lange, Rainer Müller, Nils Meyer-Larsen, Juha Hintsa / TRA2018, Vienna, Austria, April 16-19, 2018 However, some general statements about the correlation of risk indicators and kind of damages are possible. Regardless of the different kind of damages there are a group of risk indicators, which are very important for assessing the containers in terms of finding risky consignments. Table 1 shows this correlation. Customs could rate the correlation with “very important”, “important” and “not important”. Overall there are basically seven risk indicators, which are very important for assessing containers and finding hazardous goods. These are data regarding an unknown/suspicious consignor, shipper, consignee, DUNS data, an unsafe country of origin, port of departure as well as the indicated content of the container. That means, if one of these risk indicators is fulfilled it is very likely that the container is stopped for inspection. The risk indicators unknown/suspicious sealing party name, last port of call, end of transport, and the container size and type are slightly less important data. The other risk indicators were rated as “not important” by customs. 4.2. Results of qualitative evaluation of CASSANDRA approach The evaluation methodology for assessing the qualitative statement could successfully be executed. Figure 2 shows the results of the qualitative assessment methodology. During the interviews customs were asked to give a weighting factor for each kind of damage as well as a rating of finding damages in the different situations. Customs were only allowed to give integer values for both weighting factor and rating. For the evaluation of both interviews the average for each weighting and rating factor was formed. Because of that the results shown in Figure 2 are no integer but decimal values. Smuggling for fiscal fraud (excise taxes) Smuggling for fiscal fraud (VAT/ generic sales) Trafficking in counterfeit products Trafficking in narcotics Trafficking in pharmaceuticals Trafficking in pollu-ting substances Trafficking in quota-restricted commodities Trafficking in stolen goods Trafficking in arms and weapons Trafficking in endangered wildlife: Elephant ivory etc. Human trafficking / people smuggling Sum Fig. 2 Socio-Economic Benefit Analysis Target criteria: Kind of damage 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 3 3 2.5 3 3 2.5 2 3 3 2.5 3 12 12 6.25 12 12 6.25 6 12 12 8.75 6 105.3 4 4 4 4 4 4 4 4 4 4 3.5 Weighted Raiting Rating Weighted Raiting Weight 4 4 2.5 4 4 2.5 3 4 4 3.5 2 Rating The weighting factors for each kind of damage range from “Kind of Damage is more relevant” (2) up to “Kind of Damage is very important” (4). The most important kinds of damage customs are looking are listed in figure 2. By multiplying the weighting factors with the ratings and summarizing these products the benefit value for both scenarios was calculated. Scenario 1: Scenario 2: As-isTo-besituation situation 16 16 10 16 16 10 12 16 16 14 7 149.0 Starting with the rating of each kind of damage for the as-is-situation customs rated nearly every benefit with an “ok”, which equals a rating of 3. Only trafficking in counterfeit products, trafficking in polluting substances, trafficking in quota-restricted commodities, trafficking in endangered wildlife, were rated a bit lower with “poor”, which equals 2.5 or 2 respectively. In sum the benefit value of the as-is-situation is 105.25. Kerstin Lange, Rainer Müller, Nils Meyer-Larsen, Juha Hintsa / TRA2018, Vienna, Austria, April 16-19, 2018 Regarding the to-be-situation with a fully implemented CASSANDRA approach customs expected to increase the benefit. In sum the benefit value would be 149. The detection of nearly every kind of damage could be improved up to the level “good”, which equals a rating of 4. Only human trafficking would be slightly lower with 3.5. Combined with the weighting factor the biggest impact of the CASSANDRA approach could be on the detection of the damages “Trafficking in quota-restricted commodities” and “Trafficking in endangered wildlife”. The rating, i.e. improvement in finding these damages, would increase from poor (2) up to good (4). 5. Conclusions As a main finding of the evaluation of the benefits for the socio-economy it can be concluded that the full implementation of the data pipeline will have a strong positive impact on the society. During the joint evaluation of CASSANDRA with customs, they made clear that they strongly support the CASSANDRA approach, but the maturity level of the implemented system has to be improved. The demonstration phases in CASSANDRA, socalled Living Labs shown proof of concept that the data pipeline can be implemented. In order to implement this approach at the full scale several obstacles have to be tackled like interconnections between existing IT systems and usage of the de facto standards WCO datamodel V3 and UN/CEFACT. The involved customs authorities concluded that a data pipeline containing all supply chain data will have a great positive impact on the society. Customs would be able to use the supply chain data for their risk assessment. Consequently, possible threats for the society will be detected better by customs, which results in reduced costs. In sum, the data pipeline concept has a high potential to improve supply chain security and visibility. Acknowledgements This paper contains results from the CASSANDRA project, which was co-funded by the European Commission in the 7th Framework Programme (FP7; SEC-2010.3.2-1) under grant agreement no. 261795. 6. 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