Cracking the Customs Code: Can customs clearance ever be automated?
Imagine you’re a forwarder handling the logistics needs of an up-and-coming e-tailer in the Latin American market, that sources goods from China. Your client is intent on offering customers the same delivery windows as the Amazons and the Alibabas of the world: less than 72 hours between the time a customer places the order on their e-commerce website and the moment the package is delivered to their doorstep. But the airfreight hub that falls within its geographic target market is Aeroparque Jorge Newbery (AEP) in Argentina, where customs processes are notoriously slow, largely because its authorities still require all documents to be submitted on paper.
You’ve had instances in which there have been clerical errors in the paper-based forms you submitted – errors that would have been avoided had you been able to use your company’s internal data-sharing software – that you weren’t made aware of for hours after the shipment was stalled in customs. And by the time you were notified of the error and were able to make the change, your client’s shipment missed the 72-hour delivery goal before it was ever released from AEP’s customs.
The digitalization of customs processes has come a long way in the past few years, with the U.S. and the E.U. each perfecting their own initiatives that require airports to accept customs-related documents electronically. However, many countries’ major airfreight hubs are still operating with 20th century, paper-based processes.
And even at the most modernized airfreight hubs of the world, others factors like new tariffs and increased government regulations on special cargo can introduce major challenges to compliance that increase the risk of getting held up at customs.
The digitalization of customs processes at all of the world’s major airfreight hubs is one of the final hurdles the airfreight industry has yet to overcome. Converting from paper to electronic is not an easy feat for any business, large or small. This is especially true for members of the logistics industry. Like a three-legged race, each link the in supply chain needs to move forward in sync with the next in order for the industry, as a whole, to reach the finish line.
With increasingly narrow delivery window expectations, inefficiencies within the airport customs process are a bottleneck that logistics IT firms and forwarders are intent on tackling, with the hopes of making the goals of shippers of the world – like the ambitious e-tailer client – a possibility.
