Disentangling cross-border interactions

AuthorAndrew Grainger, Cristiano Morini
DOIhttps://doi.org/10.1108/IJLM-10-2018-0255
Pages958-973
Publication Date11 Nov 2019
Disentangling
cross-border interactions
Andrew Grainger
Nottingham University Business School,
University of Nottingham, Ningbo, China, and
Cristiano Morini
University of Campinas, São Paulo, Brazil and
Faculty of Applied Sciences, Limeira, Brazil
Abstract
Purpose The purpose of this paper is to disentangle the interactions between logistics operators and
government stakeholders in cross-border logistics operations with a specific focus on the UK and Brazil.
Design/methodology/approach The research builds on supporting literature. The comparativecases of the
UK and Brazil are examined by reference to an extensive series of focus group workshops as well as a series of
interviews with key informants. Care was taken to make sure that comprehensive engagement the respective
business and government communities were in place, and that there were opportunities to feedback on the analysis.
Findings Suggestions were provided on how to improve the businessgovernmentinteractions in cross-borders
logistics operations. The analysis considered transaction costs and scope for trade facilitation. The research also
helped produce a descriptive model of businessgovernment interactions in cross-border logistics operations.
Research limitations/implications The paper points to new directions in the understanding of how
businesses interact with government agencies, and the kind of issues they face in cross-border logistics
operations. However, the research only looked at two countries and there is significant scope for further
enquiry within the logistics literature.
Practical implications Reduced transaction costs at the border and subsequent economic opportunities
for the UK and Brazil.
Social implications A list of practical reform recommendations informed by the business communities of
the UK and Brazil.
Originality/value This papers original contribution to the literature is its framework for the analysis of
transaction costs associated with the businessgovernment interactions in cross-border logistics operations.
In addition to the resulting findings in Brazil and the UK it may serve as a template for research elsewhere.
Keywords Europe, South America, Logistics strategy, Global logistics, Qualitative interviews
Paper type Research paper
1. Introduction
The interactions of businesses with government agencies at the border are an important
feature within global logistics management. Yet, the logistics literature has only just begun
to give the subject its due consideration. In light of current policy developments, such as the
ongoing trade conflicts between the USA and China or the UKs efforts towards leaving the
European Union (Brexit), one might argue that concern for borders within the field of
logistics and supply chain management is much overdue.
There is considerable momentum within contemporary trade and customs policy which
seeks to make amends to border-related logistics challenges in the form of trade
facilitation. Trade facilitation seeks to reduce transaction costs between business and
government actors in cross-border logistics operations and could be viewed as a logical
extension to the field of logistics and supply chain management. Trade facilitation also
plays a key feature within contemporary trade and customs policy. It is at the core of
multilateral efforts of the World Trade Organisation (WTO) in the form of the WTO Trade
Facilitation Agreement and the Revised Kyoto (Customs) Convention. The resulting benefits
The International Journal of
Logistics Management
Vol. 30 No. 4, 2019
pp. 958-973
© Emerald PublishingLimited
0957-4093
DOI 10.1108/IJLM-10-2018-0255
Received 9 November 2018
Revised 14 June 2019
Accepted 21 August 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0957-4093.htm
The authors thank to Sao Paulo Research Foundation (FAPESP), Grant No. 2014/50227-4.
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IJLM
30,4
for the world economy are expected to be high (Duval, 2006; Mann, 2012) and are estimate
by Hillberry and Zhang (2015) to be worth $210bn.
Trade facilitation is also a key feature in regional agreements (e.g. within ASEAN or the
East African Community) and many bilateral trade agreements (e.g. those of the European
Union with the likes of Canada, Korea and Japan). It is also a feature within Chinas One-
Belt-One-Road initiative. And, trade facilitation is a political, econom ic, business,
administrative, technical and technological issue (Butterly, 2003). It thus cuts across
many academic subjects but maintains focus on the elimination transaction costs which are
borne out of operational frustrations in the interactions between logistics operators and
government agencies (Grainger, 2011).
For customs managers concerned with safeguarding their businessescompliance with
applicable border procedures (e.g. by putting appropriate management systems in place), the
resulting activities have also been described (see Grainger, 2016) as a supply chain related task
(e.g. concerning the impact of trade policy on location and production network configuration
decisions) and a logistical task (e.g. clearing goods at the ports and borders, presenting goods to
officials, and dealing with the immediate consequences of any delays or compliance failures).
Nonetheless, research within the supply chain and logistics literature which examines the
specific interactions between businesses and regulatory authorities are rare.
This paper seeks to readdress that gap in the literature by focusing on those
interactions between public and private sector actors and examining the comparative case
of the UK and Brazil.
What makes this paper special was the extensive engagement with the British and the
Brazilian business communities as well as considerable dialogue with key informants within
the respective administrations. In addition to its model that refers to three levels of
interaction between businesses and government agencies in cro ss-border logistics
operations, an analysis of experienced friction (a transaction cost which undermines
logistics performance) and scope for reducing transaction cost is provided.
2. Literature review
The supply chain management and logistics field is constructed on top of a divers set of
theories that, as reviewed by MacCarthy et al. (2016), relate to: structure, configuration
and coordination (Halldorsson et al., 2007), as well as strategy, governance and power
(Cox, 1999; Pilbeam et al.,2012).Asatopicitisconcernedwith competitive advantage that
might be borne out of cost or value advantages; and those advantages may be achieved by
reaching across organisational boundaries within or between contracting businesses
(Christopher, 1992). The reduction of transaction costs (Williamson, 1999, 2008) is a
dominant theme.
Trade facilitation policy seeks to weed out transaction costs between business and
government actors in cross-border supply chains, whilst safeguarding business compliance
with applicable regulations, especially those concerning customs and border controls (WTO,
2015). Implementing trade facilitation is not without its challenges. There is a general
recognition thatit touches upon many fields that includepublic administration, international
relations, business regulation, law, business operations and politics (Butterly, 2003) and
relationshipsbetween public and private agents (Camposet al., 2017). As a subject it is closely
associated with tradeand custom policy (e.g. WTO, 2015), which,in turn, has a direct impact
on the performanceof border agencies (e.g. McLinden et al., 2010) as well as the performance
of logistics and supply chain management operations (e.g. Grainger et al., 2018).
The range of trade facilitation ideas aimed at reducing transaction costs, as reviewed by
Grainger (2011), is extensive and includes: The simplification and harmonisation of
applicable rules and p rocedure, the moder nisation of trade comp liance systems,
administrative practices, and institutional mechanisms and tools (see the below list).
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Disentangling
cross-border
interactions

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