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Disruption and complex rules challenge global traders

[ October 22, 2024   //   ]

A study commissioned by Customs Support Group study says that unprecedented geopolitical disruption, complex customs regulations, lack of internal expertise and capacity and the impact of AI are the main challenges affecting international traders.

The Strategic Radar Customer survey includes insights from a broad range of CSG’s clients, including logistics service providers and goods owners in the automotive, retail, consumer goods and FMCG industries. 

CSG chief executive John Wegman, said: “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.” 

The survey found that 51% were affected by global shocks such as the Suez Canal blockage and the Ukraine war, while 45% needed specialised expertise to ensure prompt response and compliance with local and international customs regulations and dealing with stricter environmental regulations.  

The research also revealed that while large international companies often keep developing in-house capabilities to maintain self-reliance, they are increasingly turning to external customs experts due to a lack of the specialised knowledge needed to address complex challenges and mitigate financial and operational risks. 

Another reason for outsourcing is to access more advanced digital solutions to enhance efficiency and data accuracy, coupled with the limited capacity to manage large volumes of documentation and support repetitive tasks. 

While customs handling has traditionally been paper-intensive, manual, and prone to errors, 33% of respondents emphasised the importance of new technology, with many recognising AI as a key opportunity to enhance automation and efficiency. However, the complexity of regulations and documentation has led to uncertainty about how to implement these effectively, as there are concerns about potential non-compliance issues arising from automated, non-human interventions. 

Wegman concluded: “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 context explains the growing trend of outsourcing customs handling operations to professionals. As Europe’s leading and largest customs solutions provider, with more than 1,700 industry experts, we are proud to offer our clients peace of mind, ensuring their goods move across borders efficiently and risk-free.”

https://www.customssupport.com/insights/report-reveals-three-biggest-challenges-international-trade.