customs tips

Time to take advantage of the UCC – and of broker integration

Reap the benefits of centralized clearance under the Union Customs Code – like Portmade. And why integration is key – with customs authorities and/or brokers.

Do you know Portmade? They’re a customs agent based in the Netherlands. But even though they are customs experts, they’re not just “brokers”: they have a comprehensive portfolio of logistics services around the global movement of goods. They also offer advisory services.

Why should you care? Well, because on April 20, 2017, Portmade achieved an historic milestone: it received a “centralized clearance license”. In fact, the very first in the European Union under the Union Customs Code (UCC), which has been in effect since May 2016.

Centralized clearance (CC) is one of the simplifications linked with the placement of goods under UCC customs procedures. A CC license authorizes its holder to submit customs declarations electronically to their local customs office – even if the goods are presented to another customs office within the EU customs territory. You can find more information and guidance for traders on the EU website.

EU centralized clearance status and general benefits

This simplification applies to any customs procedure, except for transit traffic and goods under temporary storage. An important condition for the CC license is AEO-C certification. At the moment, the new Portmade license applies only to cargo of one customer going from Rotterdam to Belgium. But the company is considering extending it.

At this stage of developments under the UCC, an overall increase for CC applications is expected. This applies to both, applications from service providers and from shippers. How significant this increase will be remains to be seen. There are still several practical issues to be resolved: harmonization of the various computer systems and the application of VAT, for example. But, we’re on the right track.

Centralized clearance allows economic operators to centralize and integrate accounting, logistics, and distribution functions. It offers tremendous benefits: lower administrative and transaction costs, and genuine simplification and process acceleration. With this historic step, Portmade can now offer improved services to their customers.

The shippers’ view: how companies can take advantage

Of course, it’s not just brokers who can take advantage of this new EU license. Shippers can – and should – too. But, you also need to do more to truly optimize your customs processes and reap the benefits. Many shippers, for example, work with different software-based customs solutions in each country they operate. Or they hand over their customs processes to customs brokers, who use their own IT systems without any form of integration with the shippers’ systems.

This leads to a scattered customs IT landscape in a company’s network. It leaves you with incurring high costs – for example, for system maintenance and specialist staff – and without transparency. Regardless of which customs strategy you chose (in-house handling or outsourcing), a single customs solution offers tremendous benefits. You can find out more about how such platforms work and what benefit they deliver in an earlier post of mine.

If you’re looking for both compliance and efficiency in international customs, you need a smart and powerful IT system. It needs to be able to manage standard import/export processes as well as special procedures such as NCTS, bonded warehousing, IPR/OPR – to name but a few. It should also be able to manage customs procedures in different countries in line with respective, local requirements. And of course, if your strategy is outsourcing, it needs to integrate your customs brokers for full transparency.

Collaboration with customs brokers and IT integration

Outsourcing customs management to a customs broker is often a cost-effective solution in an international environment: for example, if one of your global subsidiaries does not have enough trained personnel or only handles small volumes. In many countries outside the EU – including China and the US – brokers are virtually a necessity for legal reasons alone.

But without system integration, working with customs brokers can often mean more work and more errors than necessary. Businesses send sales orders and documents such as pro forma invoices to their customs broker by e-mail, who then re-enters them manually. This costly interim step is eliminated when you integrate your brokers through an integrated multi-country customs platform.

Brokers import the data they need for their work directly from such an integrated platform and then send your customs notices, proofs of exit, etc. directly back to the platform. This bidirectional integration significantly accelerates the process and lets you archive documents by transaction centrally. This also ensures transparency for your own management and, of course, for the customs inspectors.

How do you currently handle your customs processes? In-house or outsourced? What’s your level of integration? I’d like to hear your opinion and look forward to hearing from you on LinkedIn. And if you would like to discuss solutions for customs integration, just contact us.

Find out more about Customs Broker Integration with AEB

Integrated customs management and central platforms deliver many benefits.
Integrated customs management and central platforms deliver many benefits.