Exporters and importers engaged in cross-border trade have to contend with far greater regulatory and documentary requirements than is the case with domestic trade. International trade is an extremely complex process and is heavily dependent on paper documents. The first step in intelligent document processing is the collection of a variety of documents, including spreadsheets and reports, from large amounts of data sources.
The complexity is compounded by various factors such as the involvement of multiple parties (exporters, importers, shipping lines, drayage providers, port authorities, and customs officials), geographically dispersed supply chains (with varying procedural requirements in each country), and commodity-specific requirements.
Documents common to the import process include the bill of lading, commercial invoice, certificate of origin, import licences, spreadsheets, and reports.
These documents are important to ensure accurate classification of commodities, determine the tariff rate applicable, and pay the correct amount of customs duties. They are often collected in large amounts and in a variety of formats.
Exacerbating Supply Chain and Documentation Complexity
In recent years, with supply chains being caught in the crosshairs of geopolitics and trade wars, the complexity has exacerbated significantly.
In the American context, the imposition of Trump tariffs and frequent updates to tariffs and regulations have compelled importers to closely scrutinize individual components and parts of commodities, and sources thereof.
The complex mix of tariffs applied to the USA’s many trading partners — combined with the fact that most supply chains span multiple countries — makes it crucial for importers to know exactly where each component comes from and what tariff rate applies to it. It is essential to comply with all relevant laws and regulations in accordance with customs requirements to ensure legal importation of goods.
The implication is that, besides the standard documents, companies also need to carefully check the Bill of Materials to confirm the provenance, the number of goods, and ascertain the correct tariff rate. Proper documentation is required for the entry process to comply with customs regulations.
Narrow Technological Vision Impeding Broader Compliance Standards Automation
To deal with these challenges and simplify the classification process, companies are using technology for AI document processing in their quest for compliance automation.
Selecting from the numerous AI document processing tools primarily focused on classification, companies can run the risk of creating a siloed approach towards documentation.
Such an approach can prove to be suboptimal and undermine the business case for deploying AI.
Organizations, therefore, need to be cognizant of the full potential of AI document processing tools and expand their objectives to include intelligent document processing and compliance automation.
Advantages of Cross-Process AI
Given its tremendous potential, the use of AI shouldn’t be restricted to just classification, but rather towards learning, adapting, and applying across processes; in short, making it cross-process AI.
Organizations need to take a holistic and long-term approach while incorporating AI in their tech stack, moving beyond AI-document processing, to cover intelligent document processing, customs submissions, proactive notifications, and exception management, with the end goal being compliance automation.
Rather than restricting the usage of AI to the classification of commodities, organizations must broaden their digital targets to include intelligent document processing, automating information sharing, generating auto-alerts in case of incomplete or non-compliant customs submissions, and flagging other procedural deficiencies.
Using cross-process AI for compliance automation can help organizations improve accuracy levels, reduce human effort, eliminate risks arising from inadvertent violations, and bring in end-to-end customs automation.
The purpose here is the generation of reusable intelligence, spanning data ingestion, intelligent document processing, and gleaning relevant component-level data from the Bill of Materials, apart from storing, correctly interpreting, and applying origin rules and updated tariffs.
With data thus flowing across functions and processes, organizations can maximize their investment in AI document processing tools and successfully attain their aim of compliance automation.
By sharing standardized and accurate data across departments and processes, organizations are better positioned to focus on their core business activities without having to allocate valuable human resources to rote tasks such as preparing documents, processing and compiling data, performing component-level analysis, manually determining tariff rates, and calculating duties payable. With their time thus freed up, employees can utilize their time and expertise for higher-value activities.
Enable Cross-Process AI in Customs Operations With KlearNow
To effectively leverage AI for customs automation, companies must carefully evaluate available logtech solutions. The goal is to choose a cross-process AI platform that not only processes data intelligently, but also applies that data across downstream activities — enabling truly end-to-end compliance automation. Companies use KlearNow’s platform to benefit from a system that automates the collection of documents for shipped goods and arriving shipments, streamlining the entire customs process.
Global control tower solutions, representing the pinnacle of logtech sophistication, are exceptionally well-suited for this purpose.
As opposed to products that target certain aspects of logistical functions, global control towers are designed to optimize the end-to-end supply chain, facilitating compliance automation.
In the global control tower segment, KlearHub stands apart for its sophistication and ease of integration. The platform ensures all compliance steps are complete and provides proof of compliance for every transaction.
KlearNow, a leading logtech player, has drawn upon its technological expertise and profound industry knowledge to offer a single AI engine that fuels multiple workflows.
Organizations that have partnered with KlearNow have testified to the transformational impact on their supply chains. The system can automatically respond to compliance issues and trigger necessary actions, ensuring smooth and efficient operations.
Schedule your free demo today and witness how KlearNow can elevate your supply chain to the next level.
Frequently Asked Questions (FAQs)
1. How does intelligent document processing software help reduce manual data entry and human error?
Intelligent document processing software automates the extraction and organization of information from both structured and unstructured data. By eliminating Manual Data Entry, it minimizes human error and speeds up document turnaround times. Intelligent document processing works by leveraging machine learning, data capture, and extraction to streamline business process automation, enabling organizations to efficiently process large volumes of documents.
2. What are the key advantages of automated document processing in trade compliance?
Automated document processing allows companies to handle complex customs and shipping paperwork with greater accuracy and consistency. Key advantages include faster processing times, reduced compliance risks, and improved handling of sensitive information across departments and systems.
3. How do IDP systems manage unstructured data and convert it into relevant data for compliance?
IDP systems use AI and natural language processing to identify, extract, and structure information from unstructured data such as invoices, bills of lading, and certificates of origin. This ensures that only relevant data is captured and seamlessly integrated into compliance workflows and regulatory submissions.
4. Why is processing documents efficiently essential to meeting regulatory requirements?
Processing documents quickly and accurately helps ensure adherence to constantly evolving regulatory requirements in international trade. By automating document workflows, companies can validate classification data, confirm tariff details, and generate compliance proofs without delays or manual intervention.
5. How can intelligent document processing reduce repetitive tasks and improve productivity?
By automating repetitive tasks like data entry, document sorting, and classification, intelligent document processing frees employees to focus on higher-value work. It ensures that structured data is captured consistently while sensitive information is handled securely, boosting overall operational efficiency.
