Lately my client asked me very simple question:
What advantage brings us SAP GTS + Broker interface against direct filing with Customs office?
“Very simple” question, isn’t it..
I believe there is no bullet point or straight forward answer to this question as every client might be in different situation, each country legislation is different and processes might be set up differently.
Lets make some assumptions..
Assuming client has no proper experience is customs, has no business power on-boarded and is highly dependent on Brokers knowledge and his customs experience..
In this case electronic communication with Brokers system could eliminate Brokerage costs up to 50% (based on my experience). If you imagine GTS is holding almost 100% export data + approx. 85% of import data and interfacing GTS system to Broker system would avoid almost all manual work of Brokers employees, why not to use this argument to cut Brokerage costs?!
There are few things for consideration:
1. In case of Brokers system interface, I would recommend to let Broker work in GTS system directly (In case company compliance allows this process). Like this all import/export declarations are finalized in GTS system and client may use this important data for reporting. It is not only reporting for import/export numbers, but client can directly control Brokers employees work.
2. Brokers harmonization would be a huge benefit across the enterprise, as more Brokers systems brings more interfaces which equals to higher IT costs. At the end integration with 1-2 Brokers is much easier than keeping all Brokers connected. Proper RFQ process needs to be executed by Business before. (Analyzing IT capabilities, time estimates for IT integration from their end and of course Brokerage costs)
3. For auditing purposes, GTS system may be used as stand alone system as all relevant data for audit purposes are stored there, no need for audits at Brokers instances. All import/export permits may be attached to GTS declarations.
Of course now a question appears – why not to use Broker for direct filing at customs office, when he is already working in GTS? Well, in case client already uses Broker for filing its import/export, there must be reason why direct filing is not possible..
Various reasons may be valid:
- SAP GTS not localized for * country.
- Technically not possible to keep up with all the customs systems changes.
- Technical interface to customs system would be a huge IT effort/costs.
- There is no electronic filing possible etc.
Obviously direct filing would be my “Thumbs Up” answer all the time, but not every grass is the same green. Sometimes it is not possible, so lets bring Broker interface on the table and analyze ROI. Usually this is the fastest ROI to present to the Board.
I believe my assumptions/considerations are not the only ones, discussions before the decision to build interface to Customs Broker could take couple months.
So coming back to very first question in the article..
No, there is no simple answer to this question without knowing clients background. At the end “money rules the world”. “What is the Advantage” answer stands on clients abilities and costs which needs to be invested in order to automate import/export process, either via Broker or directly with Customs Office.
So first Analysis which way to go needs to take place and only than we can provide “Advantages and Benefits” of the solution. (Without this I am not going to start with ppt presentation.. :))))) )