Customs Brokerage Market – A 360° Market Overview
Customs brokerage firms make the international trade possible by facilitating the shipment and delivery of goods across international borders. The agency has to take care of shipments which occur in a sheer volume across international borders every single day. Each country has a different set of rules and regulations regarding customs, import, and export. Additionally, laws and regulations regarding customs are changing constantly, making it impossible for a normal person to do business across international borders. The customs broker facilitates this transaction as they are responsible for knowing all the rules and regulations. The broker will facilitate and streamline the shipping process for the individual or the organization.
The customs brokerage market is on track for a steady growth of 8.5% per annum. Buyers, especially in North America and Europe, are collaborating with regional suppliers for strategic sourcing and supply chain management. Collaboration with regional suppliers has enabled buyers to reduce their TCO for customs brokerage and helped them realize cost savings between 5% and 7%. Although global firms can offer a wide range of customs brokerage services, it is their inability to offer assured savings that is swinging the market in favor of regional suppliers.
Although the demand for customs brokerage services is rapidly on the rise, the prices are only set to marginally increase over time. The market for such services is highly fragmented, resulting in high level of competition which is expected to keep the prices stable. The growth of the manufacturing industry has alerted service providers to offer their services for increased global trade. This will bring in added revenues to such service providers.
The brokers can charge their clients either an hourly rate, a fixed fee, or fee-based on services provided. However, both buyers and sellers are hesitant to deal on a fixed fee. They prefer to deal on an hourly rate basis, which bills customers on the basis of time involved for the advice and solutions on processing the shipment. It also provides the buyer with finer control over the expenses associated with customs clearance.
Reducing the total lifecycle or ownership cost is one of the most effective cost-saving levers in this market. Reducing the TCO associated with customs clearance process by focusing on R&D to come up with technological innovations can help suppliers increase their process efficiencies, reduce overall costs, achieve increased economies of scale, and transfer these savings to buyers.
Suppliers for long had been working on technology to detect defects in shipment. These technologies include smart seals and trafficking sensors that alert suppliers in case if a seal of a cargo item is tampered and help to locate the shipment before it reaches a customs official. A supplier based in California is utilizing a smartphone app that connects shippers and carriers. The app allows containers from multiple shippers to be grouped at the ports before alerting different carriers on when containers are available and where they should be taken.
Read more about the market outlook of the customs brokerage market along with procurement best practices, pricing insights, supply market insights, and market innovations in SpendEdge’s upcoming report on the global customs brokerage market.