The case for visibility by your customs house broker

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What is visibility?

Supply chain visibility refers to the ability to track and trace every shipment from its origin to its final destination in real-time or near-real-time. Container visibility specifically tracks the location, and estimated time of arrival of shipping containers.

This tracking encompasses the entirety of a product’s journey. The goal of visibility is to enhance various aspects of supply chain management, including efficiency, reliability, and sustainability.

Here are some key features and benefits of supply chain visibility:

Transparency:

Stakeholders have a clear view of where products or components are at any time. This reduces the uncertainty associated with wait times, delays, transit, and delivery times.

Risk management:

With improved visibility, businesses can proactively identify risks such as delays, shortages, or potential disruptions.

Improved decision-making:

Having real-time data and insights into the supply chain enables better forecasting, inventory management, and demand planning.

Customer satisfaction:

Improved visibility often translates to better customer service. Accurate ETAs can help set customer expectations regarding delivery dates and possible delays in transit.

Reduced costs:

By eliminating inefficiencies, redundancies, demurrage & detention risks, and waste in the supply chain, companies can reduce costs.

Centralised document management:

Important documents including Bill of Lading, packing lists and invoices are often scattered between inboxes and filing cabinets. Visibility tools’ ability to connect to ports and other primary data sources to connect shipments with their associated documents as they travel eliminates time spent finding shipment documents.

Who can provide visibility solutions? What challenges do they face?

Generally, container visibility can be provided by either 3rd party vendors such as Project44, Terminal49, Gnosis Freight, and Vizion, or by tech-enabled or digital freight forwarders and customs brokers.

Achieving complete supply chain visibility is challenging due to the complexity of global supply chains, with multiple stakeholders, processes, and systems involved. The data completeness is one of the biggest problems of the logistics industry.

There are three sets of data issues when it comes to supply chain visibility or container lifecycle management:

1. Incomplete or incorrect data entered by operators.
2. Incomplete or incorrect data provided by sources such as ocean carriers, rail carriers, ports, airlines, and so forth.
3. Systemically unavailable data. This is mainly an issue for 3rd party visibility providers.

When incomplete data is provided by sources to a visibility provider, it has no good way of completing it. Some providers use supplemental sources and in some cases AI solutions to bridge the gap. Unfortunately, this is not reliable enough considering the risks.

The origin and destination trucking legs, which involve fragmented markets with small trucking companies, are generally not digitally connected.

The trucking legs are tracked by freight forwarders and can therefore be part of visibility provided by forwarders. However the US Customs data, specifically release statuses, exams, holds, as well as duty payment due dates (aka Statement Dates) is only accessible to the customs broker. As such the customs broker would either need to integrate with the visibility provider, or provide the data to the importer who then would integrate that data into a 3rd party visibility.

How much does visibility software cost?

Supply chain visibility and container visibility software can be expensive. Visibility software or software with a visibility component can often cost several hundred to several thousand dollars per-month.

For large, enterprise-grade shippers these costs are small relative to the value they unlock at scale but for smaller shippers these costs in both time and money are often prohibitive.

Why you should use a tech-enabled (digital) customs broker

The argument for customs brokers to assume the role of primary shipment visibility provider is compelling but often overlooked.

Customs brokers occupy a unique position. They possess near-complete visibility into the supply chain right from the point of origin. This vantage point often starts with the Importer Security Filing (ISF), a crucial document filed 24 hours before a shipment’s departure. This filing includes essential data like container numbers and Bill of Lading, effectively placing the customs broker at the core of the shipment journey.

Digital customs brokers embrace and leverage technology to streamline the customs clearance process for importers and exporters. This tech-first mentality often means the customs brokers are able to provide unparalleled visibility, either through their proprietary platforms or by sharing data feeds with cargo owners. Since all of this data must exist in the broker’s software environment for them to successfully operate and clear shipments, there is no additional cost to data accuracy and completeness. As such, at least basic visibility should be offered to every customer free of charge.

Traditional forwarders and customs brokers, on the other hand, often lack the expertise and technical sophistication to offer such data, leaving them and their customers at a massive disadvantage.

Stand-alone visibility providers are at a disadvantage because they either have to forego the customs status and document visibility portion or rely on the customs broker to feed this data into the system. Doing so, accurately, and consistently, requires integrations and knowhow, resources that get very expensive quickly.

When it comes to transportation milestone data, every visibility provider uses the same sources. Data quality and completion among third-party providers is consistent, with, generally, slight disparities in update speed. The data completeness for transportation milestones hovers around 85% across the industry sources. Completing the remaining 15% is where pivotal differences emerge between 3rd party providers and freight forwarders and customs brokers.

For example, if an Actual Time of Arrival (ATA) is missing from the source data, a 3rd party visibility provider may be able to complete the missing piece by either searching for alternative sources, scraping data from carrier websites or plugging in an estimated date. A customs broker on the other hand cannot clear a shipment with a missing or estimated ATA. As part of the normal course of operations, a customs broker would reach out to the carrier and complete the missing data because an accurate date of arrival is required for customs entry. An incorrect ATA can easily result in clearance delays and penalties farther down the road.

Last Free Day (LFD) to pick up the imported full containers and LFD to return the empty containers are other great examples of the importance of accurate data. The data availability for the former is stuck at around 83% and much lower for the latter. Both dates are even less reliable for rail terminals. This presents a big challenge for 3rd party providers.

Freight forwarders on the other hand are typically responsible for picking up containers and returning them on time to avoid demurrage and detention. There is a massive financial risk to the forwarder associated with service failures here. As such, the forwarders, often through their truckers, rigorously track these dates.

The stakes are too high to rely on estimates, scraped data, or AI-generated dates.

The highest burden to get the most accurate data again falls on the freight forwarder or the customs broker, depending on who is dispatching the truck. And again, if the forwarder or the broker are tech-enabled, they can cater the most accurate and the timeliest data.

Our approach to container visibility

It is because of this that Freight Right management made the decision to bring customs brokerage in-house. Even at a higher cost of compliance, bringing the customs clearance process into the same system enables us to provide visibility and document management for the complete shipment cycle.

We’ve used our 15 years of expertise in freight forwarding and customs to develop our own shipment visibility solution.

Visibility by Freight Right is designed to offer cargo owners an enterprise-grade visibility and functionality without any of the setup, implementation and training costs associated with enterprise.

Visibility by Freight Right offers:

• Plug-and-play functionality. Every shipment and every document is right there the moment you log in. No special configuration, training or implementation required.
• True real-time milestone tracking on all shipments.
• Centralised document management for all your shipment.
• The ability to manage shipments booked with other forwarders or carriers.
• Customisable alerts for containers at risk of demurrage and detention.

This post is sponsored by Freight Right Global Logistics.