Why do international borders exist to create friction?
Where have you been?
With the explosion of international e-commerce offering all kinds of innovative products, speedy delivery of consumer goods to our homes is a modern convenience we have all become accustomed to. Whether it’s a luxury handbag from Italy or designer headphones from Japan, have you ever wondered about all the transport checkpoints your parcel has visited before arriving at your door?
The six major logistical stages your new product goes through are:
1. Your product will be boxed in a warehouse of the company that made it
2. It will transported to an international border
3. Checked by a customs official
4. Transported across countries to the destination border
5. Checked, again, at an import customs
6. Last mile home delivery
Nothing to declare…are you sure?
For everything to run smoothly, the process involves a collaborative ecosystem of advanced logistics, innovative technology, and dedicated stakeholders all communicating together. The main friction point, where unexpected delays can occur, are at international borders. Customs officials revise the movement of goods and people to make sure everyone and everything follow the rules imposed by the local government.
Have you ever seen your parcel waiting at a weird location near an airport? Most probably, this is an “interior customs”. It is not a border, but an area that has the same function. Instead of a government official asking questions about your trip, at such locations the government official will ask a customs broker questions about your parcel. If your parcel is stuck, it is because the conversation has gotten a bit complicated.
The government’s function is to generate a fiscal benefit to the national exchequer so that individuals and companies pay a fair amount of taxes. As with any interaction with the government, a large volume of paperwork is involved with meticulous procedures to be adhered. Incorrectly filled customs declarations can cause confusion and delays in your parcel’s journey to its final destination.
The Customs broker
A customs broker is an agency or individual who acts on behalf of the importer or exporter to talk with the government and look for the best outcome. They manage the data flow between the private sector and the government to make sure international trade can run more efficiently. Customs brokers stay ahead of the changes to international trade rules, regulations and legislation. They are familiar with all stakeholders and manage communication at every stage of the supply chain. They work to mitigate the risk of customs clearance delays, solve documentation problems and simplify complex processes. In summary, customs brokers speak government language for international trade and are experts on and in the field.
Hitting the road
We are all familiar with the household names in the logistics space such as RoyalMail, FedEx, DHL or UPS. However, because of the sheer scale of shipments being moved around the world at any one time, there is an incredible volume of subcontractor delivery companies working within the sector. Many stakeholders have transitioned with the digitization of supply chain technology and use a variety of unconnected platforms to manage their operational processes. This generates enormous data fragmentation in the delivery ecosystem leaving a big gap for efficiency improvements. While the collection, delivery and transfer between partner companies can often be fluid, if there is one small filing error at customs, goods can be detained for lengthy periods.
Home at last
With the ongoing adoption of digital practices and cloud solutions in the supply chain sector, a huge amount of data is being created every day. As gatekeepers of border transaction information, customs brokers can plug into Sifty’s platform to increase efficiency and unlock process improvements. By applying Machine Learning techniques to large data sets, Sifty enables brokers to increase efficiency without recruiting more people; unlocking the broker’s time from repetitive tasks and minimising inspection delays at international entry and exit points. Your parcel can move swiftly from the border control to the next leg of its journey, where the last mile delivery driver will expedite it to your doorstep.
Get in touch to talk to our expert customer success team about how Sifty can help you increase your international trade efficiency.
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We have recently been awarded an InnovateUK Smart Grant from the UK Government. We are delighted to receive this support and are working hard to achieve results quickly for all customs teams worldwide.