GTM study

Clear the track to Digital Customs Management

Our latest study finds the majority of trading companies not only say they are racing toward digitization in their customs work but that the greatest potential may lie in how they team with customs brokers.

Most trading companies plan to digitize their customs processes or have implemented their first steps, according to the study ''Clear the track to Digital Customs Management,'' published by AEB and survey partner Baden-Wuerttemberg Cooperative State University (DHBW) Stuttgart. 

In fact, more than 35 percent of the 435 experts polled said they have implemented at least one digital project in customs. Moreover, a similar percentage of firms says they are planning projects to do the exact same thing.

Download the complete study here. 

Prof. Dr. med. Dirk H. Hartel,
Prof. Dr. med. Dirk H. Hartel,

Trade conflicts increasing demand for standard processes

‘’We assume that public debate about the growing number of trade conflicts is fueling management's interest in digitizing customs processes. The companies need efficient standard processes to free their specialists in the customs departments for problem solving and strategically important tasks, "says Prof. Dr. med. Dirk H. Hartel, Professor of Logistics and Supply Chain Management at the DHBW Stuttgart and one of the authors of the study.

One-in-three respondents said digitization of customs processes is a high priority at their company. Considering that the customs department at most companies is usually a small area that has to compete with other areas such as procurement, distribution or production for resources, this suggests companies are seeing more value in advancing the state of customs work.

Digitization of customs
Digitization of customs

Digitization brings home centralization

The main impact of digitization is seen by 61 percent of respondents as being the centralization of customs clearance work. A large number of those surveyed, 49 percent, also expect centralized archiving and 43 percent said they see improved IT communication with customs.  

At the top of the wish list for digitization projects in the global trade environment is customs clearance in exports. Some 65 percent of those we polled consider digitization to be "very important" and 30 percent "rather important". 

In second place is the digitization of export control. About 62 percent of the respondents consider it "very important" and 25 percent "more important".  

So why are respondents so enthusiastic? On one hand, export declarations and export control processes can be very high volume. On the other hand, some companies struggle with exports, at times because of that volume, and it impacts deliveries. Digitization will make these companies more competitive while lowering costs.

 Dr. Ulrich Lison
Dr. Ulrich Lison

Digitization could stem skilled worker shortage

Most respondents also expect digitization to result in significantly reduced personnel costs in customs. More than 73 percent said a they expect that savings to be at least 10 percent though only a few firms, seven percent, said they would cut customs department staff, likely because of the short fall in skilled workers today.

 "It's more about working with existing employees rather than actually cutting staff,’’ said Dr. Ulrich Lison, member of the board at AEB and co-author of the study. ‘’Performance scales only digitally, which means that without a digitization of the customs processes, the customs department becomes a critical bottleneck.’’

Clearing the bar is not easy

Not everyone though is expecting it to be an easy race to technical advancement. Frequently, companies say. digitization projects in customs encounter obstacles. In fact, 36 percent of respondents complain about a lack of digitization know-how in their company, 35 percent say projects lack management support and 33 percent say they are challenged to find the resources for the projects. Still, there is much optimism. Seven percent of the respondents said they are digitization professionals while another 33 percent can be classified as advanced in digital. 

GTM study
GTM study

Data exchange with customs service providers needs to tighten 

‘’Businesses should start now to gain experience,’’ said Dr. Lison. ‘’You should first focus on simple, small projects - such as automating export processing or creating a dashboard of foreign trade data. These promise a quick return.’’  One project could be improving connections between IT departments and customs brokers. The survey found a large percentage of companies still use email and telephones to communicate customs work.  "Continuous communication with IT systems is a basic requirement.  Outsourcing will only lead to additional work. It will mean duplication and potential transmission errors, which will ultimately lead to higher total costs," warns Prof. Dr. med. Dirk H. Hartel.

About the survey

The study "Clear the track to Digital Customs Management" is based on a cross-industry survey of 435 experts from the logistics, foreign trade and IT sectors. The participants work in companies of different sizes,  85 percent of the companies are based in Germany. One in twenty participants is a member of the board of directors or the board of directors, and more than half of respondents hold a middle management position as head of a division or department. The software company AEB and the DHBW Stuttgart have carried out the survey annually since 2013.