ALL THE WAY

Customs
Optimisation Blueprint:
Leveraging customs
insights to drive stratgeic
business outcomes
1 Leveraging customs insights to drive strategic business outcomes
CONTENTS
CHAPTER 1
Introduction 04

CHAPTER 2
Address hidden costs 05

CHAPTER 3
Leverage custom insights for business 07
transformation
CHAPTER 4
What a difference digitalisation makes 09

a) The digital interoperability challenge

b) Agile and reliable workflows
c) Actionable vertical data

CHAPTER 5
Evaluate supply chain partnerships 14

Leveraging customs insights to drive strategic business outcomes 2

System in all
things is the soul
of business.
– George Washington

Leveraging customs insights to drive strategic business outcomes 3

Leveraging customs insights to drive strategic business outcomes 3
INTRODUCTION
Both SMEs and large enterprises are tasked with developing
reliable, compliant and cost-efficient customs processes. That’s
a tough ask at the best of times. But it’s particularly challenging
given today’s complex and uncertain customs landscape.
While customs clearance traditionally required only three parties – the customer, the customs
service provider and the customs authority – today, most companies rely on a vast network of
customs service providers to clear the enormous quantities of goods they’re shipping into different
markets.

This gives rise to an increasingly fragmented operation, resulting in a ripple effect of mistakes,
inefficiencies, cost increases and delays. What’s more, every business has its own unique needs and
challenges and naturally, customs impacts these in different ways.

As a result, it’s becoming clear that customers in these industries require support from a strategic The volume of goods that need
customs partner who can use their expertise to understand their unique requirements and optimise
to pass through [borders] and
their customs processes. The days of transactional customs clearance are fading. The winners of
tomorrow’s world will be those who take advantage of customs expertise today to drive strategic the complexity of managing
outcomes for the future. them means that processing
In this guide, we’ll demonstrate how this is possible through the creation of
declarations at the necessary speed
a customs optimisation blueprint. We’ll start by looking at the hidden costs is challenging for many traders.1
involved in customs operations. We’ll move on to look at the value of customs
insights in driving strategic business outcomes. Then we’ll explore the role Deloitte
of digitalisation in enabling customers to design and adapt their strategies.
Finally, we’ll conclude by offering guidance on the capabilities to look for in a
strategic customs partner.

4 Leveraging customs insights to drive strategic business outcomes

CHAPTER 2

Address hidden costs

For any customs optimisation blueprint, the logical
starting point is to address the hidden costs in
existing operations.
These are the tactical quick wins that must be identified and addressed before a more
sophisticated strategy can be plotted.

Direct operating costs, such as customs duties and related fees for each declaration,
are only a fraction of total costs. In practice, With an end-to-end shipment routinely involving up to 25 distinct organisations, around 100 people
and hundreds of interactions and data exchanges, manual process errors are bound to occur, and
the consequences can be devastating.3 How? Well, delays are an obvious example,
“actual costs can often be higher than expected,
with associated costs, including discounts and
22%
of export delays globally every day4 are caused by incorrect
rebates, accidentally left out through manual input” Harmonised System (HS) codes.
according to Supply Chain Digital.2
To understand the potential implications of failing to monitor commodity codes regularly, read this
article on the classification of import goods.

A heavy price to pay

Import duties are typically around 2-3% of the value of goods. However, according to our
customs experts, fines for non-compliance can rise to between 25-30% of the value of
goods. Is that a risk you can afford to take?

On the next page, we’ve outlined some of the hidden costs – including time, financial and
reputational costs – that can be found beneath the surface of an inefficient customs process.
5 Leveraging customs insights to drive strategic business outcomes
 Expensive added taxes, duties
and fees

Fines due to:

Incorrect commodity code or
customs value
A lack of understanding of tariffs
Cost of customs education
Discrepancies in Origin
The time, effort, and dedication documentation
needed to keep up with rules and Incorrect handling of documentation
regulations from other authorities
Back-up staff Insufficient export controls ANNOUNCED AUDITS AND AUDITS REVEAL
INSPECTIONS BECOME FREQUENT FURTHER ERRORS

BORDER INSPECTION REVEALS ERRORS

Cost of declarations Delays at the border

Your customs broker’s time
Additional staff required for peak
seasons
Customs software Reputational damage
Managing supporting documents
(in-time, validated, stored)
Handling deferment accounts and
guarantees Loss of business
Leveraging customs insights to drive strategic business outcomes 6
Recurring costs, such as the time, effort and dedication
needed to keep up with rules and regulations, are of course
widely known and absorbed.
At the same time, many companies don’t A proactive customs strategy, on the other
appreciate the full extent of time taken up hand, influences the boardroom agenda,
by these processes. And one-off costs, such enabling businesses to improve their
as fines for non-compliance, are often only procurement strategy, advance into new
known through costly first-hand experiences. markets and unlock a different breed of sales
opportunities. It’s this transition from reactive
What’s more, the diagram above doesn’t to proactive customs that’s the north star of
include the opportunity cost of time spent the customs optimisation blueprint, allowing
on operations rather than strategy. Too often, business leaders to focus on their strategic
manual and inefficient processes mean direction.
business leaders waste their time and energy
on day-to-day operations when they should
be focusing on bigger issues.

CONTROLLING CUSTOMS COSTS:

IN-HOUSE VS. OUTSOURCED

Once you’ve identified the hidden costs in your customs process, you need to decide how to
tackle them. Are they issues that you can address in-house, or does it make more sense to
outsource them to a strategic customs partner?

Leveraging customs insights to drive strategic business outcomes 7

CHAPTER 3

Leverage customs
insights for business
transformation
“Customs has traditionally been seen as a
transactional agency with probably less or no
commercial or added value.”5
Ricardo Treviño Chapa, Deputy Secretary-General, World Customs Organisation.

“We know that companies are overpaying 5-7% on average,

For decades, customs has been viewed as just a Take free trade agreements (FTAs) as an
box to tick or a transaction to complete. That’s example. Depending on a country’s rules of across different sectors, because they are underutilising
because, in the past, many businesses didn’t
have the insights to drive strategic outcomes.
origin, certain materials or products may not
be covered under the FTAs, which could result
what is already there in terms of free trade agreements.”6
But now they do. So a key goal of the customs in higher duties and fees. But if a company Lars Karlsson, Global Head of Trade and Customs Consulting, Maersk.
optimisation blueprint is to change this can leverage this insight within their sourcing
perception. strategy, they can save on costs. For example,
they could realise that it’s more cost-efficient The problem is, many companies aren’t known FTAs are usually underutilised.
Through experience, customs service to procure the raw materials from multiple aware of the world’s 553 FTAs. In fact, 200 To achieve success today, insights must
providers have increased their knowledge suppliers in different countries, rather than of them are currently unknown to most form part of your customs optimisation
of legal matters across European countries, an assembled product from a single supplier, companies, according to a recent survey.7 blueprint. With the right knowledge and
supporting declaration processes and improving and use this insight to increase profit margins Furthermore, FTAs are often complicated, experience, you gain the power to integrate
compliance. However, it’s the growth of wider or offer lower prices. Or they could use this weighty documents that require deep your customs and logistics operations and
customs and trade expertise that’s the key insight as the basis for moving their company’s expertise to unpick. This means that the accelerate business transformation.
differentiator, which adds value by supporting manufacturing facilities to a country where they
strategic decision making. can take advantage of FTAs.
Leveraging customs insights to drive strategic business outcomes 8
CASE STUDY

Uses customs insights to

deliver fresher fish.

Seaborn AS uses
customs insights Strategic focus has always
been on meeting customers’ Major distributor of Norwegian
salmon, Norwegian fjord trout

to deliver fresher fish

demands by developing new
business solutions. and Icelandic salmon.

Seaborn AS is a major distributor of Through Maersk’s mastery of European

Norwegian and Icelandic salmon and regulations, it proposed that Seaborn
Norwegian fjord trout. The company’s used Maersk Accountancy and VAT
strategic focus has always been on in Denmark, making it legal to export
meeting customers’ demands by without requiring a buyer at the time
developing new business solutions. of exporting. This makes it possible to
sell the salmon during transport and
To increase this strategic advantage and have it cleared by Maersk on Seaborn’s
deliver a fresher product to the consumer, Danish VAT number, enabling it to make
Seaborn needed a new customs solution use of the lead time to deliver fresher
for Icelandic salmon that was being salmon. Due to this advantage, Seaborn
exported to the EU at the border in has increased sales and saved on
Denmark but did not yet have a buyer/ warehousing costs, resulting in both top-
recipient in the EU. line and bottom-line growth.

9 Leveraging customs insights to drive strategic business outcomes

CHAPTER 4

What a difference
digitalisation makes
To combat growing complexities, a lot of businesses have
invested or are planning to invest in customs digitalisation,
with Deloitte reporting that 33% of companies worldwide
view customs digitalisation as a high priority.8
In part, this has been driven by governments moving their customs systems online. But it’s also
driven by strategic opportunity. Many companies have recognised that customs has the potential to
align with commercial strategy more effectively, and now they’re looking to take advantage.

However, while a lot of companies have invested in digitalisation, in many cases their investments
are yet to yield transformative results. In fact,
“The foundation of
everything is digitalisation.
80% of supply chain leaders say their investments in digital
technology haven’t fully delivered expected results That is the way forward.”9
according to the latest PwC supply chain survey.10
Björn Höglund,
Head of Growth Europe, Customs
At Maersk, we believe the difference between those companies that transform successfully, and
those that don’t, comes down to three key areas: digital interoperability, agile and reliable workflows
& Trade Services, Maersk.
and actionable vertical data.

In this section of the customs optimisation blueprint, we’ll explore each in detail.

10 Leveraging customs insights to drive strategic business outcomes

 CHAPTER 4A

The digital
interoperability
challenge 
In response to the unpredictability of the last few years, Chief Supply Chain Officers (CSCOs) are
expected to adopt new business models that can help mitigate risk.

42% of CSCOs are under pressure to maintain current margins and

profitability and achieve targets for sustainability, speed and
innovation.11
According to research by Gartner.

To succeed in their endeavours, CSCOs need The answer to that question is twofold. First, it’s
to focus on digital integration – the process because there are so many actors in the supply
of enabling different actors in the supply chain that need to exchange data. From the
chain to exchange data. Of course, this is customer to the customs service provider to the
already happening in many areas across global customs authority, plus everything in between,
supply chains. It’s also being encouraged by there’s a whole host of private and public
EU regulators and other public bodies such stakeholders involved. Second, it’s because
as the World Customs Organisation or The legacy systems are still in widespread use,
Global Alliance for Trade Facilitation. So, why especially in less developed countries where the
is customs lagging behind when it comes to digital infrastructure isn’t as mature.
digital integration?

Unfortunately, those who don’t invest in digital integration will be left behind, as customs clearance
will only become more complex as the pace of digitalisation accelerates.
11 Leveraging customs insights to drive strategic business outcomes Leveraging customs insights to drive strategic business outcomes 11
 The way to improve digital integration, therefore, is by implementing emerging technologies that
are trusted, open and reusable, and can easily integrate with other stakeholders’ systems and
processes so that new partners can join the process.

01 BUILT-IN
SECURITY

02 DISTRIBUTED
Three things to look for DATA HOSTING
“To me, using customs as a competitive
edge is like laying a puzzle. You have in emerging technologies:
certain pieces that you know are important 03 HIGH LEVEL OF
INTEROPERABILITY
as enablers – but the challenge is that you
don’t know how they fit together neither
do you have the full picture of the puzzle. Digital interoperability is like the glue that holds the customs process together. Without it, everything
But you still need to try.” else falls apart. To ensure your customs optimisation blueprint is successful, it’s important to prioritise
interoperability before moving on to other areas of digitalisation.
Joakim Ryber,
Director of Customs & Trade EMEA, Volvo Group
Trucks Operations.

12 Leveraging customs insights to drive strategic business outcomes

CHAPTER 4B

Agile and reliable workflows

Investing in digitalisation can also add more
01 Gather 02 Create speed and accuracy to the customs handling
information declaration workflow. Let’s examine how below.
to support the declaration in the customs system
Whether undertaken manually or digitally, the steps involved in the
handling workflow are broadly the same. What’s different, however, is
the outcome: the digitalised workflow is much faster, more accurate
and less arduous.

04 Declaration 03 Electronically The key reason for this is that, with digitalisation, all the information
is gathered prior to the declaration. This means that when the
acknowledged submit customs service provider creates the declaration, the documentation
the declaration to the
by customs authority with reciept
can be populated in minutes. With all the manual inputs and checks
customs authority
automated, the entire process is completed more quickly and reliably.
This is particularly advantageous for bulk shipments, when a customs
declaration can include more than 40,000 rows that could take even
the most efficient worker a number of days to type up.

In time, this process could also develop further and drive down the

05 Status update
06 Approval of
costs per declaration. For example, the workflow could evolve into a
sophisticated black box system, whereby the customs service provider,
sent electronically
to the customs system – e.g.,
declaration customer and customs authority integrate their systems and simplify
in the customs system declarations using a checklist interface. But while these possibilities are
approval, inspection required, etc.
on the horizon, the focus of your customs optimisation blueprint is on
saving time and improving accuracy.

Leveraging customs insights to drive strategic business outcomes 13

CHAPTER 4C

Actionable vertical data Cross-vertical considerations

Some considerations, such as pinpointing customs bottlenecks or ascertaining customs
Actionable vertical data helps businesses turn an effective complexity, are shared across industry verticals. To maximise value for your organisation,
it’s necessary to go beyond these cross-vertical considerations and tackle your unique
customs blueprint into an optimised customs blueprint. industry requirements.

It’s a value-add element that presents huge opportunities for businesses, with the potential to
produce a snowball effect. For example, the right data can be used to make a customs process Unlocking opportunities using actionable vertical data
proactive, not just reactive, enabling them to take action to maintain optimal inventory levels
Transitioning to a centralised customs solution, whereby customs data is collected, stored and
or avoid delays. Then there’s an opportunity to meet customer and seasonality demands more
controlled in a centralised digital platform, is an essential step in transforming customs into a value
effectively, which opens the door to increase revenue growth. However, to make the most of these driver. It simplifies your customs process and helps you unlock the power of data visibility to leverage
opportunities, companies need to review their specific industry requirements. actionable customs data. By getting a holistic overview of your operations, you gain more control and
can take data-driven decisions that open up new possibilities, unique to your vertical. It’s the final, and
Let’s look at how customs impacts different industries. arguably most important step, in the development of a customs optimisation blueprint.

Retail Lifestyle FMCG Refrigerated cargo

• Retail businesses typically have their own in-house • Lifestyle businesses, who need to be ahead of the • Declaring FMCG goods requires additional checks • The priority for refrigerated cargo businesses is to
customs department, but that department may latest trends to sell a product while it’s hot, need a and documentation on things like safety and get products to their final destination in optimal
only be made of a few members of staff, meaning customs process agile enough to meet fast-paced, chemical usage, so FMCG businesses need this condition, which means they need a robust
unforeseen illnesses or public holidays and vacation constantly changing, consumer demand. knowledge to ensure they’re compliant. customs process that minimises risk of delays.
periods can cause huge problems. • Because their businesses are so driven by seasonal • As FMCG supply chains are relatively short, with • Because their products need are temperature-
• While retail businesses may have existing customs trends, lifestyle businesses are also more likely to delays easily capable of doubling lead times, sensitive, refrigerated cargo businesses also need
knowledge, they may need deeper expertise in benefit from the use of bonded warehouses, where a faultless and efficient customs process is access to cold storage facilities embedded into
European customs regulations, to support Tier 1 they can keep unsold inventory until it comes back required. their customs process.
accounts. into season. • Faced with high raw material costs and increased • As even the smallest disruption can threaten
• As the products retail businesses sell are usually • With smaller sizes often subject to different taxes, protectionism regulations, FMCG businesses need product quality, the customs process needs
made from a whole host of different materials lifestyle businesses need to know how this affects a reliable customs process that makes it easier to to be stable and predictable to realise process
that are subject to different duties and fees, they their commodity codes. pivot sourcing strategies. efficiencies and increase speed to market.
need good knowledge of these differences during
procurement.
Within Volvo Group, we have loads of data in our
systems, and our challenge is to extract the data
from the systems and to combine them to make
sense, especially data connected to customs.

Without data, you are blind… I think one of the

struggles we have had, in the past, was to use
facts to take decisions because without data
visualisation you have no idea about the facts.
Sure, you have a hunch, you have strategic
ambition, but you don’t know how to act until you
have the data visualised for you.12

Joakim Ryber,
Director of Customs & Trade EMEA,
Volvo Group Trucks Operations.

15 Leveraging customs insights to drive strategic business outcomes Leveraging customs insights to drive strategic business outcomes 15
CHAPTER 5

Evaluate supply chain

partnerships
By addressing hidden costs, leveraging customs insights and embracing digitalisation, Deep customs knowledge
businesses have a highly effective customs optimisation blueprint at their disposal. A partner that knows European regulations inside out, can help you leverage FTAs
However, to help implement that blueprint, they need external support. That’s where a and has the consultancy capabilities to identify opportunities to optimise your
strategic customs partner comes in. customs process, enables you to move from transactional to strategic customs.

Indeed, The Times reports that customs management is “only efficient when the right
strategy and partners are chosen, and processes are properly integrated into supply chain Integrated supply chain offering
networks and systems.”13 So, what does the right partner look like? You won’t be in a position to capitalise on market opportunities unless you
partner up with an organisation that has a wide network of owned assets and
competencies in all types of logistics services.

Centralised view of customs

Harmonisation of systems and processes is essential in facilitating strategic
customs. Look for a partner with a centralised customs solution that can give you
a simplified, unified view of all your customs data.

Global reach
To align customs with commercial strategy, you need a partner with the
infrastructure to facilitate trade in any of the world’s markets. A customs partner
that only operates in one continent is, by nature, limited.

Leveraging customs insights to drive strategic business outcomes 16

Invest time and effort to ensure you select a partner that meets these criteria and adds value to your
customs process. With their support, you can gain the competitive edge, increase resilience, open up
Could Maersk Customs Services be your strategic customs partner?
markets and reimagine your supply chain models.

Maersk Customs Services can work with your team to continuously improve customs
operations and influence your business’s strategic direction. Our customs experts support
you to ensure business-critical customs insights are adopted into your organisation’s
strategic decisions and vision.

Working with Maersk Customs Services as your strategic customs partner enables you to
benefit from our deep customs, technology and integrated logistics expertise, all from
a single source. Alongside this, our operational control of assets and our suite of digital
tools and platforms can give you the visibility and control to make customs the strongest
link in your supply chain. And, with global coverage and support, we’re a powerful ally for
your customs process from point of origin to final destination, with the flexibility to take
care of all your customs or work as an extension of your in-house customs department.

For more information on the role of customs in business strategy,

watch our recent Virtual Event.

To talk to us about your specific customs challenges, contact us here.

Leveraging customs insights to drive strategic business outcomes 17

BIBLIOGRAPHY
1
Deloitte, Simplifying new UK customs rules, 2021, https://www2.deloitte.com/uk/en/pages/ 10
PwC, PwC Digital Trends in Supply Chain Survey 2022, January 2022, https://www.pwc.com/us/en/
annual-report-2021/stories/simplifying-new-uk-customs-rules.html services/consulting/business-transformation/digital-supply-chain-survey.html

2
Supply Chain Digital, Global Trade Management: The Big Picture to Efficiency, August 2021, 11
Gartner, Future of Supply Chain, January 2022, https://www.gartner.com/en/supply-chain/
https://supplychaindigital.com/supply-chain-risk-management/global-trade-management-big- research/future-of-supply-chain 3 Supply Chain Digital, Global Trade Management: The Big Picture
picture-efficiency to Efficiency, August 2021, https://supplychaindigital.com/supply-chain-risk-management/global-
trade-management-big-picture-efficiency
3
Supply Chain Digital, Global Trade Management: The Big Picture to Efficiency, August 2021,
https://supplychaindigital.com/supply-chain-risk-management/global-trade-management-big- 12
Ryber, Joakim, The Future of Customs Maersk Virtual Event, Maersk.com, December 2022, https://
picture-efficiency www.maersk.com/news/articles/2022/12/02/the-future-of-customs?sc_lang=en 5 Treviño Chapa,
Ricardo, The Future of Customs Maersk Virtual Event, Maersk.com, December 2022, https://www.
4
Maersk, The Future of Customs Maersk Virtual Event, Maersk.com, December 2022, https://www. maersk.com/news/articles/2022/12/02/the-future-of-customs?sc_lang=en
maersk.com/news/articles/2022/12/02/the-future-of-customs?sc_lang=en
13
The Times, How the right customs strategy pays off for UK cross-border trade, September 2021,
5
Treviño Chapa, Ricardo, The Future of Customs Maersk Virtual Event, Maersk.com, December 2022, https://www.thetimes.co.uk/static/customs-strategy-cross-border-trade-uk-aeb/
https://www.maersk.com/news/articles/2022/12/02/the-future-of-customs?sc_lang=en

6
Karlsson, Lars, The Future of Customs Maersk Virtual Event, Maersk.com, December 2022, https://
www.maersk.com/news/articles/2022/12/02/the-future-of-customs?sc_lang=en

7
Maersk, The Future of Customs Maersk Virtual Event, December 2022, https://www.maersk.com/
news/articles/2022/12/02/the-future-of-customs?sc_lang=en

8
Deloitte, The Impact of Digitalization on Customs Service Providers, October 2020, https://www2.
deloitte.com/content/dam/Deloitte/de/Documents/consumer-business/Future_of_Customs_
Service_Providers.pdf

9
Höglund, Björn, The Future of Customs Maersk Virtual Event, Maersk.com, December 2022,
https://www.maersk.com/news/articles/2022/12/02/the-future-of-customs?sc_lang=en

18 Investment and opportunity are coming to European rail