Scale and Scope of Customs Clearance Increase the Complexity of the Process
As countries strengthen economic ties and engage in greater international trade, both export and import volumes have risen steadily. As per United Nations data, global trade was valued at approximately $32 trillion in 2022, of which trade in goods comprised almost 78%, being valued at $25 trillion, growing 10% over the previous year.
This means that in 2022, Customs departments worldwide handled an aggregate of merchandise worth $25 trillion, providing an idea of the quantum of work involved in customs clearance.
To regulate this burgeoning trade and protect national interests, countries have instituted trade policies and set a framework of regulations, which comprise the core of the customs clearance process. Considering the number of countries and multiple jurisdictions involved, as well as the sheer diversity of products imported, customs clearance processes can be lengthy and complex.
Difficulties in Customs Clearance and Implications in Cases of Non-compliance
With several difficult administrative processes to comply with and a vast array of documents to be furnished, importers can flounder in the maze of customs clearance activities.
Matters are compounded by the fact that the penalties for non-compliance with regulations can be severe, ranging from the imposition of sanctions or additional restrictions to fiscal penalties. Even in the case of inadvertent errors, rectifying the lacunae in submission or adherence can prolong clearance times, resulting in delays in goods getting past Customs and reaching the market, an event that could have potential commercial ramifications in the form of lost sales and revenue or delays in production.
Necessity and Benefits of using a Customs Clearance service provider
In this context, the services of a customer clearance service provider assume significance for importers and cargo owners.
Customs clearance service providers are professional agents who help cargo owners and buyers clear customs in a timely and efficient manner by handling the documentary and other requirements, as well as ensuring compliance with all the relevant regulations and processes.
There are considerable benefits to be derived from utilizing the services of a customs clearance service provider, the most important of which are explained below:
1. Updated knowledge and awareness of the intricacies of the customs clearance process
A major proportion of the complexity in customs clearance arises from the myriad rules and processes that an ordinary business or importer would not be aware of. A professional customer clearance service provider will have complete and updated knowledge of end-to-end processes and can therefore guide the importer or cargo owner in all aspects of the customs clearance process, as well as efficiently clear customs.
2. Timely and complete document preparation and compliance with all requisite processes, thus avoiding risks from non-compliance and delays in cargo clearance
Since the customs clearance service provider is aware of documentary requirements and the timelines for submission, he can proactively collate and prepare the necessary documents and ensure submission well in time. Oftentimes, customs authorities use systems, where documents have to be uploaded, which customs clearance agents are trained in and hence can handle better than the importer.
3. Reduction in manual work and errors, resulting in higher accuracy
Since the customs clearance agent possesses the requisite knowledge and expertise, their work is generally accurate and prompt. Therefore, using a customs agent ensures higher accuracy levels than if the importer were to handle the task in-house. Further, the outsourcing this task leads to a reduction in manual work for the importer.
4. Lesser in-house staffing requirements and elimination of manual tasks
The reduction in manual work free’s up the time of the importer’s employees and relieves them of the burden of cumbersome technicalities. These employees can then focus on value-adding tasks or core business activities, positively impacting the company’s bottom line.
5. Lower costs due to economies of scale
A professional customs agent generally has a big team of knowledgeable and trained employees to handle customs clearance activities on behalf of their client base. This leads to the generation of economies of scale, whereby the customs broker can render superior quality customs clearance services at a cost lower than what the importer would have incurred had they handled the activity in-house.
6. Leveraging systems for greater efficiency
A customs broker’s wider scale of operations means software investments are more cost-effective. This helps generate greater efficiency and accuracy, which directly benefits businesses utilizing their services.
7. Better customer service and, subsequently, greater business benefits
Due to the streamlining of their customs clearance processes, the importer can better fulfill customer needs, leading to higher customer satisfaction, potentially translating into more orders and creating upselling and cross-selling opportunities.
The technological imperative
The manual element of the customs clearance activity can be overwhelming, both for customs clearance agents and customs officials, wherefore stakeholders are increasingly leveraging technology for automating and optimizing customs clearance tasks, with the intent of enhancing efficiency, reducing costs, and utilizing resources more efficiently.
The application of AI and ML-enabled technologies have resulted in the development of software solutions aimed at the unique needs of the logistics industry, including the automation of customs clearance workflows.
Functionalities such as intelligent document processing and automated submission of documents, and generation of alerts related to various milestones in the shipping process have simplified customs clearance activities to a great extent.
While the market is replete with competing Logitech solutions, the nature of the technology and underlying algorithms is such that systems that have been in use for a longer period have a distinct advantage by virtue of having handled more data and hence being more intelligent and better at processing documents.
With the benefits of Logitech solutions becoming apparent, the increasing role of technology in recent years has been a global phenomenon.
How KlearNow helps facilitate the Customs Clearance process
As a prominent player in this market, KlearNow has established its reputation as a reliable provider of high-quality Logitech software solutions.
KlearNow’s AI-powered platform has accelerated the digitization of customs clearance processes, enabling the smooth movement of goods through customs worldwide.
KlearNow helps importers and businesses with clearing customs swiftly and increasing on-time delivery.
Recognizing the criticality of real-time visibility in the international transport chain, KlearNow’s platform provides this functionality in partnership with project44.For more information about how KlearNow can help your business, please click here.