Look up to the cloud for better customs management
The perceived resource cost of self-filing customs makes many companies use third-party brokers to handle the inevitable complexities of the process. When operations specialists are striving to grow their business, the decision to outsource is eminently understandable. Few have the bandwidth to handle day-to-day operations and keep on top of the minutiae. On a per-consignment basis, a cost of €35 to €60 for each filing is, it’s assumed, a saving on the equivalent in headache tablets. It’s also a pretty sure way of ensuring the company’s operations remain compliant in every territory, so when the auditors descend on the office, the right paperwork can be retrieved and presented.
In the last five years, however, our journalists at Tech HQ have been able to cover many areas of logistics and the supply chain where automation technology has positive effects. We’ve seen a trend emerge where properly sourced and intelligently deployed technology solves efficiency conundrums in the first instance and often has several peripheral positive effects elsewhere in the business too.
One example would be warehouse management, where automated systems increase available capacity and act as a conduit for data (via APIs) from other supply chain partners. In real-time, operations staff can see exactly when consignments to and from a facility are due because the logistics systems “speak” to the WMS (Warehouse Management System).
When customs management is handled by cloud technology, it yields similarly-shaped results: it ensures compliance and grants full visibility into operations, and gifts the users with significant advantages in a few other areas too. This article describes the advantages that, depending on the shape of your operations, come from deploying in-house customs management systems and reducing broker requirements and their subsequent costs.
Compliance and auditing usually get placed at the bottom of any , but if import and export are central to your company’s operations, that’s a significant oversight. In-house customs management can automatically ensure that compliance is maintained, and the central, cloud-based solution gets updated as and when regulations and requirements change. Without having to research trade law in every territory, the platform providers update systems in the background.
Auditing is a fact of life in international goods movement. Records held with third-party brokers can be slow to retrieve, and if there are gaps in any paper trail, the trading company is liable, not the brokerage. Instead, all required documentation can be retrieved at the touch of a button (more accurately, the mouse click), maintaining a state of readiness for the inevitable audit.
Detailed real-time views of every shipment mean that decision-makers can check the status of goods at any time. That gives an unheard-of degree of pro-activity that’s simply not possible when your operations are subject to the processes of a third party.
“Finance leadership can better understand how resources are being used across the organisation through granular visibility into the supply chain thanks to digital platforms like CAS.” Jo Buvens, Chief Revenue Officer, C4T
Strategic views come from the same type of data as real-time snapshots of the situation on the ground but are formed over time. The longer customs filings happen in-house, the more data accrued. It becomes possible (much more quickly than you think) to see patterns of bottlenecks, pinpoint where duties are cutting profits, understand how changes in operations can bring value to the business, and identify risks to the supply chain.
Keeping decision-makers informed comes from automated systems triggering notifications. Stakeholders gain the ability to react fast to emerging crises and make sure that remediation happens quickly. The same automation can ensure that shipments get cleared on time and all paperwork gets correlated and filed where it needs to be.
It’s the integration with existing ERP systems that powers many of these more complex interactions, but thanks to API-based software, it’s a relatively simple matter to expose your existing ERP to customs management software. This scenario gives the bigger picture to all decision-makers across the company, marrying (for instance) financial data with customs filings. Hence, there’s a full, end-to-end breakdown of every trade.
Not every company will need every feature of customs accounting systems right away, so choosing just a few modules to fit the business today doesn’t mean that extra capability can’t be added as the company grows. Modularity ensures that software users are not paying for what they’re not using, ensuring a return on investment.
That pay-as-you-need approach brings the costs of in-house versus brokerage-based customs management into the arena. With each filing costing upwards of €35, a company reaching (for example) 2,000 border crossings will quickly find that in-house management, regardless of the extra value such a platform brings, soon becomes more cost-effective than third-party services.
For instance, one user of Customs4trade‘s CAS software deployed the platform at a cost of €51,333, covering a trade scope of three countries (BE, NL & UK) and saved over €158,000 on its third-party filing expenses in the first three years of use. Multinational companies trading across four or more regions save over a factor of 10x what they pay to brokerages – without the massive commitment of time and people that images of self-filing processes might have produced previously.
An on-demand webinar recording is available for all comers to explore the Customs4trade solution in more detail. It’s one of those technological success stories that is transforming the ways that companies worldwide do business; a fine example of empowerment through digital automation, and one that deserves your attention.
26 May 2023
26 May 2023