Navigating Compliance and Customer Expectations: Innovative Strategies for the Logistics Industry

What innovative strategies can the logistics industry implement to navigate the complex web of global compliance regulations while ensuring safety and efficiency?

The logistics industry can navigate global compliance regulations by adopting digital solutions such as AI-driven systems and automating paperwork. Partnering with local compliance experts, leveraging real-time data analytics for proactive risk management, and investing in training for staff on evolving regulations can also be a key strategy to handle the current requirements in cross-border goods traffic in the best possible and most effective way. For example, AI proved to be an effective tool for tariff classifications, which could lead to improving data quality.

So, to summarise, I would like to highlight the following points:

• Use of new technological possibilities for data analytics to improve data quality.
• AI is used to put declaration data onto the higher quality level regarding the tariff classification and thus the use of more accurate commodity codes and goods descriptions.
• The effective consolidation of all necessary data and its uncomplicated and fast exchange through the use of SW-solutions and community systems
• Better mechanisms for risk management on both sides – business and government – and regular systemic self-auditing of companies based on the use of smart technologies to ensure compliance in every situation
• Re-design of the process flows to speed up the overall process based on using pre-clearance measures and submitting advanced cargo information as comprehensively as possible.

How do technological advancements, such as AI, reshape regulatory compliance in logistics operations, particularly considering that the global air freight market is projected to exceed $200 billion by 2026? What specific technologies have proven most effective in enhancing compliance and reducing operational risks in this rapidly growing sector?

Experience in other sectors of the transport industry has shown that the use of community systems and Trade-SW solutions can influence processes in such a way that a high degree of automation can be achieved while ensuring the monitoring of goods movements. Efforts must be focused on improving the quality and availability of the data required by law.

As e-commerce continues to surge, how are customer expectations evolving in the air cargo sector, and what innovative strategies can the industry adopt to not only meet but exceed these rising demands?

In today’s rapidly changing landscape, staying ahead of the curve regarding evolving expectations is essential. This involves understanding the key points that shape our perceptions and experiences. Adapting to these changing needs in business, education, or personal relationships can lead to more effective communication and improved outcomes. We can foster a more inclusive and responsive environment by acknowledging and addressing these evolving expectations.

Key Points (Evolving Expectations):

–  Faster Deliveries: clients expect quite fast = same-day or next-day deliveries, so speed is a top priority.

– End-to-End Transparency: real-time tracking and updates is a baseline expectation.

– Sustainability: environmentally conscious consumers are expecting greener logistics practices.

Strategies:

– Digitalisation and flexible solutions: Adopting advanced technologies like AI, blockchain, etc, to improve efficiency, predict delays, and enhance transparency.  Developing agile networks to handle surges in demand, especially during peak seasons. New technologies should help ensure that internal workflows and control mechanisms can also be organised in the best possible way. Digitalisation reduces paperwork, minimises delays, enhances transparency, and ensures better regulatory compliance.

– Strategic Partnerships: collaborating with e-commerce platforms and logistics companies to optimise the supply chain. The key element here is data and its quality. To enable a smooth process, especially in view of the volumes in e-commerce, it must be possible at border clearance to fulfil the authorities’ mandates with relatively little physical effort. The measures implemented for this purpose and the systems and technologies used must meet legal requirements and be transparent regarding regulatory requirements.

– Sustainable Practices: Investing in fuel-efficient aircraft and carbon-offset programs to align with green initiatives.

To not only meet but exceed customer expectations, the air cargo sector must embrace innovation, prioritise sustainability and focus on seamless integration with e-commerce ecosystems.

Customs fraud has been a major target of federal government intervention in recent years. What innovative strategies have been implemented to reduce the estimated $30 billion lost annually to customs fraud?

Indeed, the fight against smuggling and illicit trade is playing an increasingly prominent role in the day-to-day work of customs services worldwide.

The digitalisation of the processes, incentivisation of the use of electronic filing and data sharing, the constant expansion of databases, and the increasingly effective evaluation of additional data from a wide variety of sources continually improve the authorities’ position in the fight against illicit trade. The use of ever-improving technological tools and more and more precise data allows customs services to constantly optimise and expand their risk management and the associated risk profiles. The centralisation of databases also plays an important role in this.

Automated data verification and AI tools have proved to be effective in detecting suspicious patterns and anomalies, thus improving risk assessment and fraud prevention. Close and more effective cooperation with various partners provides a network for the extensive exchange of information.

What is the role of Customs and how it can pioneer the adoption of cargo community systems at airports and ports?

Customs definitely play a critical role in ensuring the smooth flow of goods across borders while enforcing compliance with regulations and security standards. While customs cannot be the leading force in promoting cargo community systems (such as PCS/CCS/Trade SW solutions), it can still significantly contribute to their adoption. The Customs Service is an executive agency. This means that the control and final decision on the movement of goods across borders lies with the customs service. Of course, compliance with all legal requirements is monitored in cooperation with all relevant authorities. However, the final decision as to whether the goods may be imported or exported lies with the customs service.

Customs can facilitate the implementation of cargo community systems by collaborating with port and airport authorities, logistics providers, and other stakeholders to ensure the systems meet regulatory requirements. By integrating customs procedures into cargo community systems, it is possible to streamline clearance processes, improve data accuracy and reduce delays.

Of course, this depends on the design of the specific process landscape in the respective port, airport, country or even region. Nevertheless, customs authorities have also learned from various projects worldwide that cooperation with PCS / CCS / Trade SW solutions also benefits customs services. Ultimately, it is about fulfilling the mandate of trade facilitation and creating the best possible conditions for the growth and prosperity of the country.

Olga Vikaine serves as the Head of the eCustoms Department at the National Customs Board within the State Revenue Service of Latvia. With a strong background in customs and trade regulations, she plays a crucial role in shaping the future of customs processes in an increasingly digital landscape. Olga’s expertise is vital as the logistics industry navigates the complexities of globalisation and e-commerce, ensuring that Latvia’s customs operations align with the market’s rising demands and regulatory changes. Her insights into the intersection of technology and customs are invaluable for companies looking to thrive in the evolving logistics environment.