Automated Customs Management

Redefining the Automated Customs Process

Grant Sernick
July 3, 2024
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min read
Redefining the Automated Customs ProcessRedefining the Automated Customs Process

Given the complexity of today’s global supply chains, even minor disruptions can lead to significant shipment delays and freight transportation backups. As a result, shippers must manage their current customs process resiliently and effectively.

However, the old ways of handling customs no longer work in today’s quickly evolving global environment. Disruptions such as the Red Sea crisis, Panama Canal water levels, the Ukraine–Russia War, and tensions between the U.S. and China are driving the need to connect the customs process to the larger supply chain to improve visibility, reduce costs, and ensure on-time deliveries.

In our latest paper, The ROI of Automating Your Customs Process, the reader will learn about the challenges of traditional customs processes and the benefits of automating them.

The Broken Process

Uncertainty reigns in the traditional customs process. Often, the process is disconnected from the overall larger supply chain, which leads to inefficiencies, a lack of visibility, and uncertainty if mistakes are made prior to submitting a customs entry or other forms to the Customs Border and Protection (CBP).

The average cost of a customs entry is $100, and the average import security filing (ISF) is $25. This cost can add up quickly, and if entries are miscalculated or the wrong data is used in a calculation, fines can be severe. The CBP can impose fines of up to $10,000 per entry for recordkeeping infractions.

As noted in a previous blog post, customs brokers often do not show their work, resulting in what we describe as the black box, which can potentially lead to numerous audits and fines.

To reduce these uncertainties, shippers need to upgrade their customs process to meet 21st-century challenges. Otherwise, they will face fines, delays, and potentially lost customers.

Automating the Process

Automating the customs process removes almost all the manual work associated with the traditional process. It saves time, reduces cost by at least 50%, eliminates risk, provides better visibility of the clearance status, thus eliminating the black box issue, and, most importantly, gives control to the shipper.

Unlike the traditional process, where product master data and operational processes are managed separately, the automated process combines these into a seamless, interconnected process. It creates a structure where a shipment can be automatically converted from the operational documents to the required customs documents.

This integrated approach allows for better management and synchronization of commercial invoices, packing lists, and bills of lading, thereby automating and streamlining the customs process.

The Benefits

Among the benefits of an automated customs process include the availability of validated data and the elimination of manual errors through automatic calculations.

While audits are always possible regardless of automation, post-entry audits can also be automated, highlighting any discrepancies, such as when data submitted by the customs broker may not match the compliance team’s information.

In addition, automation may also allow for the self-filing of customs entries directly with CPB instead of using a third-party customs broker. Self-filing could cut brokerage costs by as much as 50 percent.

Lastly, documentation, including commercial invoices, packing lists, bills of lading, and advanced shipping notices (ASNs) from vendors and forwarders, is centralized in the system and easy to retrieve just in case there is ever a question.

Control Amid Chaos

The complexity of supply chains is increasing as risks grow and disruptions occur around the world. Your entire supply chain, integrated with the customs process, must be able to adapt quickly to any sudden changes regardless of how big or small they may be or face the consequences, including fines, delays, and loss of business.

By automating the customs process and linking it to the rest of the supply chain, resilience will be achieved, and life will be easier for the customs broker and the importer.

3rdwave’s Shipment Execution Platform™ allows BCOs and shippers to plan early, observe what’s happening in every stage, and respond in real-time to ensure favorable outcomes.

To learn more about the customs process, download our latest paper – The ROI of Automating Your Customs Process.

If you’re ready to take the next step, contact us to learn more about 3rdwave’s solution for automating customs filing.

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