Customs declarations: Digitising and integrating is the way to go
Dec 10, 2019 Comments (0)
Shippers across sectors use digitisation in their quest to enhance customer service, reduce supply chain costs, improve transparency, and speed up turnaround times.
But while various business areas are now reaping the benefits of digitisation, companies are still reluctant to digitise international trade processes.
With today's supply chains spanning the globe and an increasingly competitive international marketplace, on-time performance is highly dependent on efficiency at national borders. Companies cannot afford delays in customs processes throughout the entire supply chain, from procurement to distribution.
But as soon as goods cross the border, things get complicated. Different countries use different IT systems: for example, the United Kingdom is currently moving from CHIEF to CDS, Germany works with ATLAS, Switzerland uses e-dec and the Netherlands are on the verge of switching from AGS to DMS.
Many companies that submit their own customs declarations still work with separate customs teams for each region. And each team usually works with a separate, local customs system in their area. This fragmentation leads to system silos, a lack of transparency, missing uniformity in processes, and ultimately to inefficiency and increased risks across the organisation.
It is high time to harmonise these different customs processes, link together relevant systems or simply implement one central customs system in order to streamline customs management and build the right foundation to efficiently manage future changes.
Companies that have outsourced their customs management and work with customs brokers may think this does not apply to them. But the actual collaboration between shippers and customs brokers for these outsourced customs processes is often not so digital.
Take, for example, an export shipment. Usually, the exporting company sends its customs agent an email with instructions and the necessary documents attached as a PDF file – for example, pro forma invoices. Most customs agents have a small army of administrative staff who then enter the necessary data manually into their own system in order to be able to make the correct declaration.This is a highly inefficient, labour-intensive and error-prone process that makes it difficult to keep an overview. It is also an expensive exercise because the cost of a customs clearance based on manual data input can be up to 50 percent higher than using an integrated solution from end to end.
Clearly, automating the process of collaboration between shippers and their customs brokers helps to streamline and speed up processes while reducing transaction costs and errors at the same time. Ideally, customs related information should be available at any time, at any location, via a central platform. Separate system silos with data held separately in different countries and locations need to be merged. This requires an IT solution with unhindered data exchange in both directions that offers standard interfaces, transparency, and easy access for all partners involved.
The regulations governing international trade and customs processes change frequently and unexpectedly. An integrated customs platform makes it easier to implement changes, strategy and processes, and to add new procedures, for example when entering new markets, moving from self-filing to customs agents, or responding to new import tariffs. Once all relevant customs processes, data and partners have been integrated into one system, customs management can generate added value and contribute to a company’s competitiveness.
Iqubal Singh Pannu
Iqubal Singh Pannu is Senior Solutions Consultant at AEB in the UK and has been with the company since 2006. With considerable consultancy and project management experience, spanning several areas of the supply chain, Iqubal is advising companies on solutions for optimising supply chain performance and generating value through automated global trade and logistics processes.