Every year, more merchandise flows across national borders. In the fiscal year of 2012 alone, $2.38 trillion in US-focused imports took place, representing a five percent increase over the previous year - a figure that is only magnified in the global landscape. Yet traditional customs activities and resources remain cumbersome, and success brings alongside it the potential for sabotage. International trade is subject to threats on all sides, with customs administrators battling criminal and terrorist activities while ensuring compliance with regulations. How can government agencies transform traditional customs activities?
An encompassing solution cited in a recent IBM report highlighted the potential for improvement. Cloud, analytics, mobile and social (CAMS) technologies are the natural choice to innovate customs. CAMS holds specific weight within two circumstances: the first, where data sharing among participants is limited to one-to-one information exchange based on individual agreements or legal requirements, and the second, where data is methodically shared and enriched throughout the international trade world.
The challenges within international trade
Customs activities facilitate the trade that keeps everything going. According to IBM, there are four fundamental challenges to international trade that have been in play since the onset of trade. They are:
- Speed and cost: Suppliers and logistics professionals deal with frustration around the timeliness and administrative burdens associated with international trade. As a result, they view cargo inspections with negativity as red tape, incremental costs, and delays are created in the supply chain.
- Rising volumes: Shifting work due to finances, global supply chain evolutions and the growth of e-commerce have dramatically increased trade volumes.
- Increasing complexity: Information is fragmented as the logistics provider sector becomes increasingly specialized and advanced.
- Increasing uncertainty: Considering that criminals and terrorists have interest in concealing integral shipment details, and technological advances make it difficult for customs professionals to discern safety risks, additional pressure is placed on customs administrations to perform specialized inspection tasks, while preserving the efficiency and effectiveness others demand.
To face these issues head-on, customs administrations must rework and enhance the international trade playbook to encompass technology that can set the stage for different industries.
CAMS holds potential for international trade
Known as CAMS, the integration of cloud, analytics, mobile and social technologies has been utilized increasingly in recent years to extend the reach and benefits of international trade technologies. Broken down into four aspects, each holds a specific merit for the system:
- Cloud: Cloud computing provides access to computing resources over a network, delivering elastic capacity that supports diverse workloads from any location.
- Analytics: Analytics is used to derive insights from data to make decisions, helping identify “normal” behavior and deviations for customs and trade.
- Mobile: Mobile technology provides access for employees regardless of their location or device, which has served to improve the efficiency and effectiveness of their work.
- Social: Social technology supports and maintains communities sharing common purposes - an aspect that, within the international trade ecosystem, could mean supporting participants in a specific shipment.
CAMS technology will soon be essential to realizing the full potential of innovations within the international trade ecosystem. By utilizing information through analytics, customs professionals will be able to operate smoothly within the framework of social technologies and mobile abilities.
Utilizing cloud technologies means customs administration can foster a lack of reliance on local IT infrastructures, which streamlines the international trade ecosystem and ensures that trade seamlessly complies with regulations that govern international trade, including fiscal, economic, security, health, consumer safety and environment codes.
Granted, the future of seamless information services is still a ways away. However, CAMS can help international trade get there faster. By developing smaller point-solutions, starting in a single country or several that agree to collaborate, the solution can sustainably grow to a global initiative.
The future of international trade
International trade faces an unprecedented amount of growth in the years ahead. In order for nations to ensure that challenges do not hold their economic success back, they must implement adept systems. To learn more about how your customs administration can provide better, more efficient systems without straining the process, be sure to read IBM’s report Innovating customs.