Leading up to BREXIT, the automotive industry recognized that to maintain a seamless flow of inventory, they would need to plan ahead. Overnight, hundreds, if not thousands, of declarations, parts numbers, and HTS codes would all require management just to operate the normal day-to-day business. A large part of the planning process was considering how to manage the ‘heavy data entry task’ that comes with a typical Customs declaration for the industry. 

The volume of declarations post-BREXIT increased to 78.3m in 2021 just for the UK ^[1]. One way to combat the increase was to hire data entry clerks or invest in technology to manage it.

Part of this planning included leveraging partnerships to manage the same level of accuracy, focusing on compliance with customs procedures, and identifying ways to continuously improve efficiencies when handling higher volumes of data. The World Customs Organization (WCO) acknowledged the need for “Scaling up Customs Digital Transformation," and the theme encouraged “Embracing data culture and building a data ecosystem.”

International Customs Day 2022- Scaling up Customs Digital Transformation

In line with the WCO’s approach, His Majesty’s Revenue and Customs (HMRC) and customs brokers were in the process of aligning with this strategy. HMRC is transitioning from a document-driven process in the outdated Customs Handling of Import and Export Freight (CHIEF) system to a data-driven customs environment, the Customs Declaration Service (CDS). This first step will drive towards a complete overhaul of the border systems within the UK. According to HMRC, “The UK to be the most effective border in the world by 2025,” made more viable with the evolution from document to data-driven processes ^[2].

Customs brokers, driven by the increased volume of entries post-BREXIT, have increasingly utilized digital tools and further leveraged the output of these tools within their customs systems. These efforts are moving the needle from the heavy data entry perception of customs to a digital smart age of customs.


Digital Tools Are Being Used in the Customs World

A boom in smart devices around the home and everyday life has made manual tasks, like turning the lights on and adjusting thermostats, easier and quicker. The world of customs is no different. Optical Character Recognition (OCR) and OCR with machine learning “scrape” or “lift” data from commercial invoices instead of having to do this manually. Machine learning adds a smart element to the OCR software, remembering previously seen document formats and most used data fields, accelerating data processing and the accuracy of data extraction. 

These tools enable the transfer of data captured directly into the customs software. The tools, in addition to more popular existing options such as Electronic Data Interchange (EDI) and uploading Excel sheets, reduce and, in some cases, remove the manual element of administrative tasks. 

• According to McKinsey, 31% of global businesses have successfully automated at least one process since 2020
• 66% were piloting solutions
• There is a general trend toward upward investment into these solutions ^[3]

What's Next? 

Intelligent Document Processing (IDP).

According to automationhero.ai ^[4], the natural next step with the tools being used today is to combine them with Intelligent Document Processing (IDP). IDP brings intelligence to document processing by leveraging the tools to help make AI decisions. In essence, it reads and interprets documents in collaboration with humans. 

Benefits That the  “AI” World Will Bring

There is a real fear that AI will replace humans in the world of work. This really isn’t the case. Human intervention still needs to occur in validation and decision-making processes within the complex customs compliance world.

At best, the tools of AI, like machine learning, remove menial tasks, creating more capacity in humans for meaningful work. Thus, in turn, improving efficiency, reducing errors, rework, and increasing job satisfaction ^[5].

The Human Condition 

It’s hard not to think that with all this technology,

“Where do we come in?”

and

“What do we do now in the process?”

As good as technology is or will be, human intervention will still play an important role.

To start with, the transition from manual data entry to basic digital tool usage requires constant validation to ensure the initial setup mirrors the current manual way of working. Whether it be setup, transition, or implementation, it's critically important that the system checks and balances, monitoring, and compliance still need to be decided and managed by people.

The digitalization of the customs world for sure is the future. However, the human element will never go away.

Conclusion 

Customs digitalization has begun. The term “best of both worlds,” bridging digital AI tools with human experience and knowledge, is the key to the future of customs. The automotive industry in the UK is experiencing continued growth throughout 2024 as manufacturers and sellers look towards new technology to enhance the customer experience.  

We are moving towards a hybrid world in the Customs industry. Reaping the benefits of accelerating data entry, intuitive technology that learns what is important from data, and a competent person at the wheel—this is the future. 

References

[1] Customs declarations for international trade in goods in 2021

[2] Target Operating Border Model

[3] 32 Business Automation Statistics for 2021: Automation Market

[4] IDP: Intelligent Document Processing for any type of document

[5] 32 Business Automation Statistics for 2021: AI & Machine Learning