Delivery insights

Charting the national strategy for an e-freight transport system

Client Situation

Digital transformation is an initiative at the top of the agenda of tax authorities all around the world. Countries, that have progressed in the automation of transactions between taxpayers and authorities in the course of the last 15 years, are already reaping the benefits of their electronic transformation plan. For instance, Central and South America countries are very advanced in this forefront: tax revenues improve without corresponding increase of tax rates.

Leveraging this trend, our client, a key business stakeholder in an EU Member State, was interested in investigating global best practices related to digitisation of transport documents and electronic monitoring of freight transport. It is a common belief that the lack of such a monitoring system facilitates illicit trade practices and, consequently, allows for unfair market conditions to be established.

Therefore, M-Prime was asked to analyse global best practices and to develop recommendations for the key pillars of an electronic freight transport monitoring scheme in the country of reference.

The way to problem solving

To meet the project objectives, M-Prime implemented a twofold methodological approach.

Firstly, we captured the required by legislation paper documentation that accompanies freight transport in the EU Member State and issues related to the mandatory data included on documents. We have also sized the extent of illicit trade practices based on credible international sources.

Considering that any monitoring system of freight transport needs to be supported by the appropriate control mechanisms, we have closely examined the issues related to roadside checks in the country of reference, including fragmented responsibilities, limitations in the coordination, lack of resources and data that would allow targeted checks.

As a second step, we conducted a thorough benchmarking exercise that included both EU and non EU countries. We analysed in depth the e-freight transport systems implemented in the selected countries and we synthesised lessons learnt related to the systems’ scope, data collected, processes, supporting technology and success implementation stories.

Local tax and customs authorities are responsible for implementing such e-freight transport systems worldwide. National and -in some cases- cross border B2B freight movements are typically monitored. Benchmarked systems may monitor either all types of goods transferred, all goods of a quantity above a certain threshold or even specific types of products (e.g. products of excise duty).

A unique identification number is attributed to each shipment, while e-toll or RFID systems may be used to monitor trucks along key motorways. The implementation of such systems may have a significant impact on tax evasion. For instance, one of the benchmarked countries achieved a 5% reduction of VAT gap within only two years of implementation.


We synthesised the findings of the local environment and international best practices and developed a robust set of principles for the e-freight system to be developed in the EU Member State. Principles included the requirement for the unique information representation, quantity thresholds above which freight would be monitored electronically, the balanced use of technology and system user friendliness.

We have also determined the data to be captured in the e-freight transport system for each shipment and developed a mockup for the front end of the e-freight system.

We described the process of registering electronically and monitoring freight shipments. The process includes all check points of receiving and delivering of shipments, along with the related roles of freight owners, carriers, freight forwarders and end clients.

With respect to the technology that will support the electronic freight transport monitoring system, we defined its main features and we outlined the mechanism to be implemented for roadside checks.

Finally, we made a high-level estimation of the expected benefits from the implementation of the e-freight transport system in the EU Member State. Benefits were related to the reduction in the time required to process transport documents in the private sector due to the transition in the electronic system and, more importantly, to closing the VAT gap.

M-Prime’s study has undergone a multi-staged consultation process. Stakeholders’ feedback has been incorporated in M-Prime’s proposal. Responsible governmental authorities are currently working on the programme for the e-freight transport system implementation.