From the cereal we eat in the morning to the toothpaste we use before bed, fast-moving consumer goods (FMCG) are an integral part of our day-to-day routines. And with an estimated growth of 5.4% in the next five years and market size of $15,361.8 billion by 2025, FMCG forms one of the biggest industries worldwide.Yet, the FMCG industry operates in a complex and uncertain logistical landscape. Whether it’s high raw material costs, increased protectionism, evolving sustainability regulations or additional import and export licences, businesses have a challenge to ensure all requirements are met while maintaining competitiveness. Gaps in customs knowledge can present major risks to your supply chain. They exacerbate these challenges, leading to inefficiencies, cost increases and delays. The solution is a reliable, compliant, cost-effective and streamlined customs operation. If this can be achieved — through distinguishing and integrating touchpoints — you get improved data, visibility and insight. So, exactly how can you use these integrated customs insights to improve supply chain efficiency?
Avoid hidden costs and finesFor many FMCG businesses, the direct operating costs of customs, such as customs duties, taxes and related fees for each declaration are significant. Yet, with an end-to-end shipment routinely involving up to 25 distinct organisations, around 100 people and hundreds of data exchanges, errors naturally occur. Errors which can lead to unforeseen costs and fines for incorrect administration. For example, it’s estimated that 22% of global export delays every day are caused by incorrect Harmonised System (HS) codes.
Reduce the cost of customs administrationWhile import duties are typically around 2-3% of the value of goods, the cost of managing your customs operations is considerably more than this. There’s the cost of education, the cost of support staff and the dedication needed to keep up with continually evolving rules and regulation. On this last point, our expertise and advice can keep all stakeholders up to date with the latest regulations, so you’ve the insights to keep goods moving at every stage of their journey.
Leverage customs insights to fuel your businessCustoms is often seen as a box to tick, something that must be done to continue trading. However, by providing rich insights, customs can support strategic decision making across different areas of the organisation. Take free trade agreements (FTAs), as an example. Depending on a country’s rules of origin, certain materials or products may not be covered under the FTAs, which could result in higher duties and fees.
Sell while in transitIn some jurisdictions, customs rules prohibit you from moving goods until a buyer is found. This was the case for Seaborn AS, a major distributor of Norwegian and Icelandic salmon, whose Icelandic fish was being held at the EU border in Denmark. Maersk’s customs experts proposed the solution that Seaborn used Maersk Accountancy and VAT in Denmark, making it legal to export without requiring a buyer at the time of exporting
Improve speed and accuracyIntegrated customs insights help improve predictability and control, which improve speed and accuracy. You can see which goods move seamlessly across borders and which are regularly held up, and then work on solutions for this. And you can use customs data from up and down the supply chain to speed up data exchange. For example, when a customs service provider creates a declaration, it can be instantly populated with up-to-date, accurate information and shared between all stakeholders.
Take the next step with MaerskImproving the efficiency of your FMCG supply chain is a sizeable task, layered with different challenges. With integrated customs insights, you can bypass these, reveal hidden solutions and take a more strategic approach. But you don’t necessarily need all this customs knowledge and capability in-house. Working with an expert partner is an effective way to lighten the load, reduce costs and speed up your customs operations.
For more on the power of customs insights, download our Customs Optimisation Blueprint eBook.