In today’s interconnected world, the dynamics of global trade are increasingly under pressure from geopolitical disruptions and the rapid adoption of artificial intelligence. A recent report from Customs Support Group sheds light on how these two forces are shaping the landscape of international trade, revealing significant challenges and opportunities for businesses.
The Customs Support Group, a European customs and trade solutions provider, conducted an extensive survey involving global logistics firms and multinational manufacturers across various sectors, including automotive, retail, consumer goods, and fast-moving consumer goods (FMCG). The survey identified several prominent challenges impacting daily trading activities, notably the increased complexity of customs regulations, a shortage of internal expertise to navigate these regulations, and the dual nature of AI as both an opportunity and a source of concern.
Insights from the Strategic Radar Customer survey showcased the sentiments of logistics service providers and goods owners, highlighting three consistent themes. First, the complexity of customs regulations has escalated, compounded by recent geopolitical events. Second, many companies are facing significant knowledge gaps when it comes to compliance. Third, while AI presents significant opportunities for increasing efficiencies, there are also substantial concerns linked to its adoption.
According to John Wegman, the CEO of Customs Support Group, “We have identified three consistent trends in international trade—the increasing complexity of regulations and associated risks, further intensified by recent geopolitical disruptions; the expertise and knowledge gaps companies face in addressing these issues; and the high expectations for AI, coupled with concerns about potential errors.” This statement encapsulates the essence of the challenges faced by companies engaged in international trade today.
The report revealed that a majority of participants, 51%, reported experiencing difficulties due to global shocks, with examples such as the Suez Canal blockage and the ongoing conflict in Ukraine significantly impacting supply chains. Furthermore, about 45% of respondents recognized the urgent need for specialized expertise to ensure compliance with both local and international customs regulations amidst stricter environmental regulations.
In analyzing customs compliance, the survey unveiled a trend where large international companies are increasingly investing in in-house capabilities to become self-reliant. However, a noteworthy number of firms are also opting to outsource certain functions to external customs experts. This outsourcing strategy is primarily driven by the pressing need for specialized knowledge to tackle regulatory complexities, ultimately mitigating financial and operational risks.
Outsourcing in this context also allows companies to leverage advanced digital solutions that enhance efficiency and data accuracy. Many respondents identified capacity issues as a significant barrier, with nearly 60% outsourcing customs tasks to manage these challenges, while 45% pursued outsourced expertise specifically for its specialized knowledge. Interestingly, industry-specific expertise was deemed crucial by 48% of respondents, underscoring the importance of having knowledgeable partners in navigating the intricacies of international trade.
Customs operations have long been characterized by labor-intensive and error-prone manual processes. However, the report notes that 33% of surveyed companies were keen on adopting newer technological solutions, with AI frequently cited as a pivotal component in enhancing automation and operational efficiency. Nonetheless, it is critical for organizations to tread carefully when implementing such technologies. Concerns have risen regarding non-compliance resulting from automated processes lacking human oversight, underscoring the necessity for human vigilance in customs operations.
As John Wegman articulates, “Ultimately, all three trends can be distilled to a common concern: the fear of non-compliance risks. Such concerns underscore the vital role of customs knowledge and expertise—what we call Real Intelligence—as the key to enhancing AI or navigating the complex and evolving regulatory landscape amidst geopolitical disruptions.” This perspective reinforces the idea that while technology can streamline processes, it cannot replace the nuanced understanding required to manage compliance effectively.
The growing trend of outsourcing customs handling operations is a strategic response to these challenges. As the largest customs solutions provider in Europe, Customs Support Group boasts over 1,700 industry experts dedicated to offering clients peace of mind, ensuring their goods navigate borders smoothly and without unnecessary risk.
In conclusion, businesses involved in global trade must navigate a complex environment shaped by geopolitical tensions and the transformative potential of AI. As they seek growth and efficiency, the balance between leveraging advanced technologies and maintaining robust compliance measures will be crucial. The insights from the Customs Support Group’s survey emphasize the importance of specialized knowledge and the strategic use of outsourcing in overcoming the challenges of modern international trade.