Customs Clearance around the world have modernized in recent years, becoming more competent at employing digital technologies. Since the turn of the century, e-commerce has grown exponentially in scope, while the global economy has become more digitalized. As a result of these advancements, the customs sector now has access to a variety of data and digital tools.
Moving forward, customs clearance must go beyond simply automating their procedures: they must leverage digitization to better serve their constituents and contribute to national economic growth. This is especially important given the growth in cross-border e-commerce, rising customs and security risks, and the urgent need to support the post-COVID-19 economic recovery.
The majority of the industry's digitalization initiatives have focused on customs clearance management, namely declaration processing, which includes tasks such as risk management, valuation, data verification, and payment services. While undergoing digitization, customs administrations can use digital technologies such as data mining, big data, and telematics to improve operations and allow secure trade.
Focusing on trade facilitation, additional digitalization efforts were directed toward the implementation of a Single Windows (facilities, sometimes known as 'SWs,' that allow parties to lodge standardized documents at a single point of entry to meet all regulatory criteria) and institutional cooperation. Customs is frequently assigned a lead role in building a national SW. In such cases, it makes little difference whether simply customs declarations can be processed electronically; the SW project requires a coordinated, whole-of-government strategy to enable effective information exchange, streamlining of operations, and collaboration across border control agencies.
Looking at customs, we can see new forces shaping our future: the continued rise of e-commerce, the proliferation of national SWs, increasingly complex global supply chains, a greater emphasis on transnational illicit trade, escalating concern for environmental protection, and — as a result of the ongoing COVID-19 pandemic — an urgent need to replenish depleted treasuries. Clearly, customs clearance has grown in importance, both domestically and internationally.
In this tough environment, customs clearance must recognize new trends and changes. To capitalize on these disruptive technologies, customs leaders must adopt new mindsets in response to this shifting vision.
Customs collects more data from the public than any other government agency. This is shown by Korea Customs Service (KCS), which stated in a June2018 article that it collects 45 GB of structured data and 30 GB ofunstructured data per day.
These massive amounts of data can give valuable insights if customs can harness them using powerful data analytics. In this setting, customs administrations must improve data analysis techniques and become more data-driven. Customs has also turned to data mining and predictive analytics, such as using cognitive technologies and advanced algorithms to analyze unstructured data, as well as predictive analytics that aid in the identification of patterns and trends, compliance and/or non-compliance history, gaps, risks, and modes of operation. Data analytics offers a novel approach to customs analysis by utilizing sophisticated tools to collect data from diverse sources, assess and analyze it, and extract important insights from it.
The ever-improving capacity to mine sources of information using data analysis techniques has a significant impact on customs today. Recently, there has been a spike of interest in data analytics, as well as an increasing requirement for training on how to apply data analytic models.
In recent years, the World Customs Organization (WCO) has launched a number of initiatives to promote data analytics in customs. The Band of Customs Data Analysts (BACUDA) project, a collaborative research platform focusing ondatra analytics, was launched in September 2019. BA-CUDA seeks to create data analytics algorithms in open-source languages (R or Python) that WCO members can utilize with their own data.
While Artificial Intelligence (AI) is not new, it has only lately gained prominence and attention due to the availability of cloud computing and large-scale processing capacity, along with the exponential increase of data.
The use of artificial intelligence in customs clearance gives a significant opportunity. Given the massive amounts of data acquired by customs and border agencies from goods, people, and vehicles crossing borders, AI provides the capacity to make sense of this large and ever-increasing amount of data. Essentially, these AI technologies can process this data and find and anticipate trends more effectively than humans.
Robotic Process Automation (RPA) is a computer or software that performs high-volume, repeated operations more efficiently than people. RPA software robots can log into applications, enter data, handle queries, calculate keep track of records and transactions, finish jobs, and log out. What differentiates RPA from traditional IT automation is the capability of RPA software bots to mimic human workers by being aware of and adapting to changing circumstances, exceptions, and novel situations. Once RPA software has been programmed to collect and analyze the activities of specific operations, it may then alter data, trigger reactions, initiate new operations, and interact with other systems automatically.
RPA has the potential for increased application in customs clearance, such as data verification of numerous manifests and declaration submissions. It can be programmed to detect, for example, if the value of the products in the declaration does not match the invoice, the declaration lacks a certificate, or there are incorrect data inputs. Typically, RPA can assist in detecting and resolving frequent errors that cost customs significant time and human resources. Using RPA in conjunction with an optical character recognition bot, data entries on manifests and claims can be quickly verified with additional documentation attached — such as commercial invoices, packing lists, certificates of origin, and permits — and promptly corrected in the declaration processing system.
Blockchain has been hailed as a transformative technology for a variety of industries, including the government sector. Blockchain-based technology has numerous applications for government entities; one of its primary benefits is its trustworthiness, as cryptography ensures that records cannot be altered.
Blockchain technology features, such as Distributed Ledger Technologies(DLT) and smart contracts, offer significant potential to increase cross-border supply chain efficiency and speed by simplifying operations and reducing the need for human intervention in many transactions. These characteristics help reduce cross-border friction while decreasing the cost and complexity of cross-border transactions. DLT and encryption enable trading community governments to safely share and exchange data with customs and other government agencies. This eliminates a single point of failure while safeguarding vital commercial and government data. Smart contracts can streamline the customs clearance process by automatically releasing items that meet customs requirements.
As customs clearance digitalizes, blockchain will become a more appealing option. Several customs agents have launched experimental projects, including the exchange of electronic certifications and bills of lading. Many of these attempts are still in the proof-of-concept stage, so it will only be a matter of time until customs use blockchain more widely. However, a number of challenges remain that prevent wider adoption, including a lack of governance rules and restricted interoperability.
Customs clearance agents should continue to collaborate with the trade community to explore possible uses and identify processes that might benefit from blockchain technology in order to ensure that digital trade growth continues. One promising application of blockchain technology is to improve the interoperability of SW systems regionally and worldwide.
The epidemic has underlined the essential roles that customs play in enabling trade, providing additional push for the digital transformation of customs clearance. These developing technologies have great potential if they are properly implemented. Customs leaders must take a comprehensive strategy to deploying digital technologies in order to increase automation, improve efficiency, and effectiveness.
Another shift in perspective is required: while technologies are key enablers, digital transformation cannot be achieved entirely through ICT. Far too frequently, digitalization efforts fail to acquire traction when projects are approached in a compartmentalized manner, spearheaded solely by ICT departments.
Instead of a piecemeal approach, digitization activities should have a transformational impact on entire businesses. As a result, personnel in charge of both operations and business must be actively involved, with re-engineered use cases and processes for these modern technologies. With this concerted approach to this promising technology, customs will have a lucrative path ahead.
In conclusion, leveraging the expertise of a Hexalog for customs clearance processes can significantly streamline and enhance your supply chain operations. Through the strategic use of cutting-edge technology and innovative solutions, these companies can navigate the complexities of international trade with precision and efficiency. Automated documentation, real-time tracking, and advanced data analytics are just a few of the technological advancements that can simplify customs procedures, reduce delays, and ensure compliance with regulatory requirements.
Partnering with a Hexalog that prioritizes innovation means you can focus on your core business activities while enjoying the benefits off aster, more reliable customs clearance. Embrace the future of logistics and experience how technology-driven solutions can transform your import and export processes, making your business more competitive in the global market.