The pandemic has made the logistics industry very volatile. The industry is under a lot of pressure. Do you think the industry is now well prepared to take the challenges head-on, and what are the areas for improvement?
Logistics, like any other industry was taken unaware by the pandemic. The small and medium players were the most affected simply because they did not have the same level of technology adoption as the bigger players. Most of them were still using legacy systems. The pandemic forced logistics service providers, especially freight forwarders and Customs Brokers, to switch to web-based solutions. They gained the lesson the hard way.
Though the switch to web-based solutions was a move in the right direction, it was more out of compulsion to tide over the immediate crisis of employees being unable to attend office. Decisions were made in haste, with little thought given in selecting the proper application or vendors. Now, as the logistics service providers have realized the intrinsic benefits of web-based solutions, they are looking at ways to augment their service capabilities with the help of advanced applications. With the adoption of the right technology solutions, logistics service providers will be in an excellent position to face future challenges head-on.
Digitization seems to be at the core of Customs this year. International Customs Day, which was celebrated on 26 January 2022 had the theme set by World Customs Organization as ‘Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem’. How will the Customs Community reinvent the way they do business with this digital wave?
The digital wave has set in, and Customs Brokers are acutely aware of this development. Kunio Mikuriya, Secretary-General, World Customs Organization outlines, ‘Digital Customs’ as “using digital systems to collect and safeguard Customs duties, to control the flow of goods, people, conveyances and money, and to secure cross-border trade from crime, including international terrorism which continues to rear its head across the globe.”
It is now a well-established fact for the Customs Broker Community that digitization is the only way forward. Customs Brokers will have to shed their inhibitions on technology adaptation and draw some bold decisions. Technology adaptation will be at the heart of Customs Brokers’ effort to re-invent themselves and ride the digital wave. Adopting the right technology solution will play a crucial role in resurrecting business.
The role of a global Customs Broker is fast changing. Their expertise is now getting built not only in Customs-related matters but also in facilitating international trade. What are your thoughts on it?
The assimilation of the world economy and the immense growth of e-commerce globally has led international trade to become more ambitious in its approach and aggressive in its expectations. Global initiatives such as Business Sans Borders (BSB) to create an open connector of business platforms, trade associations, government bodies, financial services, and other services providers and other initiatives are opening up cross border trade and diminishing barriers.
The World Customs Organization (WCO) has set up the Authorised Economic Operator (AEO) program encompassing various players in the international supply chain. Under this program, an entity engaged in international trade stands endowed by Customs as compliant with supply chain security standards and granted AEO status and certain benefits.
Under these circumstances, the Customs brokers can no longer profess expertise only in customs-related matters. They also are expected to facilitate international trade with end-to-end solutions. If the Customs Brokers are to survive and thrive in the future, they will have to diversify and enhance their capabilities to provide end-to-end logistics solutions. Many Customs Brokers are already ramping up their competencies to offer end-to-end solutions and are aiming for AEO certification. It is either that or become extinct.
In the recent Union Budget 2022, the government’s drive to encourage integrated logistics and multi-modal connectivity is definitely a positive move towards the progress of the logistics industry in India. But ease of compliance is still missing. What is your take on this?
The government has taken significant steps towards improving and enhancing the logistics infrastructure, which shall go a long way in Ease of doing Business and lowering logistics costs across the country. The Government is also facilitating trade through an electronic customs environment for Ease of Compliance. The Indian Government has introduced many new initiatives to this end, like faceless assessment and paperless processing. They have introduced digitization in the payment of duties and taxes via electronic transmission.
The Government recently launched the Customs Information Portal to provide free access to information to all Customs procedures and Regulatory Compliance for nearly 12,000 Customs Tariff Items. Though the prime aim of digitization is to provide a seamless platform to taxpayers for the Compliances, it remains an unfulfilled dream due to an absence of a single, shared platform. We can safely say that though substantial work is initiated, there is still much more to do in this direction.