Team checking the customs clearance process

During the last 1.5 years, companies have faced several challenges that have clearly demonstrated the need for a good overview of the supply chain in order to be able to act early and with force when circumstances change and the supply chain is strained. A good overview also includes control over the company's customs clearance management, including all parties involved, end-to-end. It is about costs, compliance but also supply chain resilience and gaining a competitive edge.

 

The need for visibility and the ability to monitor the course of events along the entire flow of goods has clearly become apparent over the past 1.5 years. The pandemic, changing buying behaviours, increased competitive pressure, political events, but also the opportunities and demands that come with digital development have affected and continue to affect companies’ product flows and sourcing strategies. The physical flows also come with an extensive flow of information to ensure effective customs clearance. The better control we have over the necessary customs data and documentation, the better the conditions for ensuring successful customs handling that strengthens the supply chain, reduces costs and contributes to improved compliance.

Cost optimisation

Good control over the company’s customs clearance increases the opportunities to reduce costs and includes both direct and indirect costs. Better overview and follow-up opportunities reduce the risk of paying unnecessarily high fees, many times linked to customs value and tariffs but also due to the fact that available free trade agreements are not fully utilised. This affects purchasing costs. Furthermore, better conditions are created to streamline both information flows and work processes, which reduces operational costs. Good control of ensuring that the right information is in the right place at the right time also increases the possibilities of optimising the lead times in goods flows, while at the same time reducing the risks of unplanned delays. These factors together contribute to reducing both transport and production costs.

Strengthened customs compliance

With increasing complexity, additional flows and recurring, changing trading conditions, it has become even more important to keep a close eye on how data and the massive flow of information are handled to ensure customs compliance. Violation of applicable customs legislation, many times due to incorrect customs value, classification, country of origin or the goods not being cleared, can, depending on the extent, expose the company to considerable risks. In addition to costly fines, inadequate compliance can also lead to sanctions with long-term consequences in the distribution chain as a result. Lack of ability to deliver and imposition of sanctions can damage the company’s reputation, jeopardise customer and supplier relationships and limit both the sales opportunities for the company’s goods and the supply of goods to its own production. Many countries also reward customs compliance through various forms of Trusted trader programmes, e.g. AEO programmes, which further increases the benefits of good control and overview.

Supply chain resilience

Improved monitoring and analysis possibilities of the company’s customs handling increase predictability, the possibilities for preventive work and the ability to manoeuvre when something happens. It strengthens the resilience of the supply chain and contributes to more reliable, cost-efficient product flows and lower production costs. Increased margins and improved risk management in turn create further possibilities for developing the business, from pricing strategy to investments in R&D. In addition, good control contributes to the company’s abilities to better meet customers’ delivery needs even in strained situations. It not only increases the opportunities for continued good business with existing customers, but also the opportunities to attract new customers. A lack of control can instead lead to the opposite, where missed sales can, in the worst case, be significantly more costly than the efforts that may be required to ensure a good overview.

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If you would like to discuss how you can develop your trade and customs management to strengthen your supply chain, please contact us by filling out the form above.

 

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