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Common Trade Challenges Due to Lack of Customs Clearance Visibility

Customs clearance is a blind spot in supply chains. In a world where supply chain visibility is fast becoming the norm, with importers and customs brokers investing in solutions that provide visibility during the transportation process, stakeholders often lose visibility during the customs clearance process. Achieving complete supply chain visibility presents a big challenge, primarily due to the complexity and fragmented nature of global supply chains.

This is thanks to the customs process being completely under the ambit of the customs department. The department is duty-bound to thoroughly check to ensure that the shipment complies with all applicable regulations, while detecting and penalizing violations as and when they occur.

This implies that exporters or importers have little influence over the customs process or with ensuring compliance, save for completing customs formalities and documentation.

During the customs clearance stage, importers and customs brokers cannot receive regular updates on shipment status. They can only be informed formally about anomalies in data submission or procedural violations by the customs authorities.

Potential Challenges Due to Lack of Customs Clearance Visibility

Importers and customs brokers could potentially face several challenges arising from a lack of customs clearance visibility or not using customs clearance software, including:

1. No pre-alerts in case of missing or incorrect customs documentation/ procedural lapses

With manual processes, it is not possible to receive pre-alerts or notifications about inaccuracies in customs data or procedural lapses.

2. Inability to proactively rectify or amend as needed

In the absence of such pre-alerts or notifications, customs brokers will not be able to correct mistakes or rectify omissions.

3. Risk of customs violations and penalties

Since they lack the ability to correct lapses in customs submissions, customs brokers and importers are exposed to the risk of penalties for non-compliance.

4. Delays in cargo delivery and prolonged transit times

International shipping involves complexities and responsibilities, such as delays in customs clearance or additional time required to rectify deficiencies in customs filings, which will delay the movement of goods, increasing transit times and the time to market.

5. Not able to efficiently plan onward movement and drayage

If importers or customs brokers do not have customs clearance visibility from ocean carriers, they are not in a position to accurately predict the time needed for clearance of cargo, in which case, they will not be able to efficiently plan drayage and onward movement of cargo.

6. Higher costs

Delays at customs add to avoidable costs, resulting in higher TCO or landed costs. This is due to the incurrence of charges towards storage, detention, demurrage, inventory carrying costs, and monetary fines.

7. Supply chain reliability undermined

All the above factors affect supply chain reliability, as they directly prolong delivery times and the costs involved.

8. Reputational risks

Customs delays could be construed as a reflection of the professional expertise and knowledge of the customs brokers, and repeated instances thereof could result in loss of reputation.

How Technology can help overcome these Challenges

With the increasing availability of supply chain visibility products in recent years, the focus is now shifting to customs clearance visibility platforms.

Powered by AI and ML, customs clearance visibility platforms can help importers and customs brokers avoid most of these challenges related to customs processing.

Customs clearance visibility platforms provide insights into the status of customs clearance for shipments, which ensures that importers and customs brokers are aware of the status and timelines for each shipment. This helps them adhere to all customs regulations, like customs duties, taxes, and restrictions. In case of delays, the stakeholders can plan onward movement and inventory accordingly.

Advanced software solutions are crucial for validating and managing HTS codes, enhancing efficiency during the customs clearance process.

In addition, features such as error flagging and autogenerated pre-alerts for upcoming milestones or required actions empower stakeholders to address errors, amend submissions, and take timely action, effectively preventing potential process delays.

The use of technology thus minimizes the risks of non-compliance and the incurrence of additional costs, such as storage, detention, demurrage, or customs penalties.

Additionally, smooth cargo movement through customs helps safeguard supply chain reliability and adhere to committed delivery times.

Enhancing Customs Clearance Visibility with KlearCustoms

In their quest for customs clearance visibility, a growing number of importers and customs brokers are partnering with KlearNow.AI.

KlearNow’s KlearCustoms is AI- and ML-powered digital customs clearance software designed to provide visibility into customs clearance and streamline the entire process.

KlearCustoms operates by integrating data, real-time analytics, timely notifications, customs filings, and reporting and audits. Trade agreements play a crucial role in customs clearance processes, especially for large enterprises engaged in international shipping. To navigate these dynamic challenges effectively, advanced technologies like customs clearance software are a necessity today.

By transforming trade documents into structured data and all customs-related data into a single platform, KlearCustoms provides importers and customs brokers with a clear and real-time view of all customs and shipment activities, thereby enhancing customs clearance visibility.

The incorporation of KlearNow’s logtech solutions has delivered tangible benefits for customers, as demonstrated by the consistently positive feedback.

To explore KlearNow’s products, please click here for a free demo.

 
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