The logistics industry incorporates technology into its operations, making it better positioned to provide visibility during freight movement. The introduction of smart containers, RFID-equipped trucks, and rail wagons, along with the role of freight forwarders, has also created visibility during the inland transport legs.
Importers and customs brokers typically enjoy visibility across the extended supply chain, but this often diminishes during the customs clearance stage. This is because customs clearance involves more than just the physical movement of goods — it requires meticulous compliance with documentary requirements and adherence to stipulated processes.
Challenges arising from lack of Customs Clearance Visibility
As explained in the previous article, the lack of visibility into customs clearance can be the source of multiple challenges. These include the absence of pre-alerts in case of inadvertent omissions, the inability to amend submissions in time, and the risks of penalties and reputational loss. It also contributes to delivery delays, suboptimal planning, higher landed costs, and poor supply chain reliability.
Furthermore, this lack of visibility increases the risk of errors in calculating and paying customs duties and taxes, making it more challenging to navigate the complexities of international shipping. Such errors not only heighten the likelihood of financial penalties but also compromise the efficiency and integrity of the entire supply chain.
The consequences of these challenges can be severe. They can impair the importers’ ability to serve their markets (in the case of finished products) or ensure continued production (in the case of inventory and spares), resulting in missed sales opportunities and revenue losses.
Benefits of Gaining Visibility into Customs Clearance Process
Having visibility into customs clearance can generate significant process-related benefits for customs brokers and importers. This visibility is crucial for brokers to efficiently manage their customs business, including data entries and ensuring timely payment of duties.
These benefits help streamline and optimize the customs clearance process, ensuring smooth cargo clearance and movement and staying on schedule.
These benefits include:
1. Enhanced compliance levels and lower probability of customs violations
With customs clearance visibility, it is easier to ensure compliance upfront and also proactively rectify errors. This helps customs brokers and importers comply with documentary requirements and procedures, thus reducing the probability of customs violations.
2. Minimising delays
With higher levels of customs compliance, the chances of delays in clearance are minimized, resulting in smooth and fast movement of imported goods through customs.
3. Better supply chain planning and transport scheduling
With better compliance and smooth movement of goods due to customs clearance visibility, the quality of supply chain planning improves as potential bottlenecks are eliminated. Transport scheduling and drayage movement are also simplified as the time needed for customs clearance can be estimated with a greater degree of precision.
4. Rationalizing costs
Eliminating the risk of customs violations and delays helps avoid associated costs, including storage fees, detention charges, demurrage, inventory carrying expenses, and fines. By mitigating these risks, businesses can rationalize their cost structure, ensuring that only planned expenses are incurred. This proactive approach prevents the erosion of profit margins caused by unplanned or unforeseen costs, safeguarding financial performance and enhancing overall operational efficiency.
5. Automated information flows
With the digitization of trade documentation and automation of information flows, all relevant information is shared with the parties concerned. This ensures timely pre-alerts where action is required, thus negating the possibility of information not being shared or necessary action not being taken by the stakeholder responsible.
6. Higher customer satisfaction levels
As customs clearance visibility leads to streamlined customs clearance, customers get their goods on time and without undue delays, resulting in higher customer satisfaction levels.
7. More resilient supply chains
With customs clearance visibility optimizing customs tasks, the movement of goods is in accordance with what was initially planned. Adherence to estimated delivery timeframes and minimizing delays help build more resilient and robust supply chains.
How Technology Can Unlock These Benefits
With the inherent limitations of manual customs submissions — including human errors, mistakes in product classification, incorrect duty application, noncompliance with stipulated procedures, and incomplete documentation — it is obvious that process efficiencies cannot be realized by relying on human effort alone.
Technology must be deployed to complement human expertise. This will eliminate errors, process unstructured data, facilitate accurate classification and application of duties, and generate pre-alerts on milestones or where action is needed.
Importers and customs brokers will therefore have to eventually shift towards a more digital mode of working, leveraging logtech solutions in their quest to gain customs clearance visibility.
Best Practices for Implementing Customs Clearance Visibility Platforms
Implementing customs clearance visibility platforms can provide numerous benefits, including improved efficiency, reduced costs, and enhanced compliance. To ensure successful implementation, the following best practices should be followed:
- Choose a platform that provides real-time tracking and monitoring of shipments
- Ensure that the platform is integrated with customs data and provides access to key performance indicators
- Select a platform that offers customizable customs data feeds and alerts
- Implement a platform that provides extensive global trade intelligence and import and export databases
- Ensure that the platform is user-friendly and provides automated communication systems
- Work with a reputable customs broker like KlearNow.AI, who has expertise in customs clearance and can provide guidance on implementing the platform
By following these best practices, importers and exporters can pick their ideal customs clearance visibility platform. Such a visibility platform will provide them with the tools and insights needed to navigate the complex customs clearance process, leading to improved compliance, better shipment visibility, and a more efficient customs clearance process, ultimately enhancing the overall supply chain.
KlearCustoms: The ideal Customs Clearance Visibility platform
As one of the pioneers in the logtech industry, KlearNow.AI has, over the years, developed a suite of products aimed at transforming the way businesses approach customs clearance.
KlearNow’s suite of products includes KlearCustoms, KlearHub, and KlearEngine. The platform transforms customs brokerage by automating document processing, enhancing visibility and control, and increasing scalability. The software was developed by Licensed Customs Brokers (LCBs) and battle-tested as an ABI provider in the US and a licensed broker in Canada, the Netherlands, and Spain.
To explore KlearNow’s products or schedule a free demo, click here.
