Digitization of customs-relevant data
The current situation in the area of preparing shipments to third countries is strongly characterized by traditional, paper-based processes. These processes have hardly changed in the last 20 years and are still time-consuming and error-prone. Documents are printed, manually assigned and attached to shipments, which leads to loss of shipping documents, expensive reworking and extended transit times. In order to modernize these inefficient processes, the EU adopted Implementing Decision 2879 in 2023. This decision aims to support the efficiency and modernization of customs procedures through the development and introduction of electronic systems. The exchange of information between customs authorities and between economic operators and customs authorities is to take place electronically in future. This measure complements existing electronic systems such as electronic import declarations, electronic certificates of origin and electronic invoicing in public procurement. Companies operating in the customs sector or involved in customs procedures must prepare for the switch to electronic systems. This changeover will have an impact on their business processes and IT systems. The deadline for implementing the structures at country level is June 2025. Although the changeover will only gradually become mandatory for shippers and importers in the following years, the first carriers, especially express service providers, want to introduce the new systems as quickly as possible in order to optimize their processes and make them more efficient. Paperless trade, also known as “paperless trade” or “electronic trade document”, enables customs documents to be transmitted electronically as a digital image. There is no need to print out and attach the documents to the parcel, as the documents are transmitted online to the carriers in a digital format, for example as a PDF, via an interface. The following documents can be transmitted electronically:
- Commercial invoices: Digital invoices with details of the goods traded, prices, taxes and payment terms.
- Customs declarations: Electronic customs declarations for the cross-border movement of goods, including export accompanying documents and export licenses (MRN), if applicable.
- Certificates and licenses: Electronic versions of certificates that confirm the quality, origin or other aspects of the traded goods.
- Certificates of origin: Electronic documents that confirm the origin of the goods and are relevant for compliance with trade agreements.
- Insurance documents: Digital insurance certificates proving the insurance cover for the transportation of goods.
- Payment instructions: Digital documents with information on the payment of goods deliveries.
- Transport documents: Electronic versions of transport documents such as loading lists, packing lists and other logistical documents.
- Bills of lading (B/L): Electronic versions of bills of lading that confirm the transportation of goods between the sender and recipient.
Eliminating the manual processing of paper leads to cost savings and efficiency gains along the entire supply chain. The EU expects the financial burden to be reduced by 25%. In Germany alone, savings of 2 billion euros per year are expected at institutional level. Of course, security also increases: papers cannot become detached from parcels and are always within reach, which is a frequent problem, especially with multi-parcel shipments. This is particularly advantageous for urgent and important parcels, where the loss of documents is least likely to happen. Dispensing with printouts also saves tons of paper and plastic, which makes a significant contribution to environmental protection. Automating processes also minimizes sources of error. Costly reworking and delays are avoided. Digitization also speeds up customs clearance processes. However, there are also exceptions: Depending on the carrier and country, upper value limits for paperless trade apply. If a destination country does not accept paperless customs clearance, the shipment is marked as “Electronic with Originals” (EWO). In this case, the customs documents can be uploaded directly electronically so that they can be checked by a customs agent at an early stage. However, in order to meet the legal requirements, the printouts of the customs documents must still be attached to the shipment. In addition, there will still be documents that must be attached in the original, such as phytosanitary certificates, movement certificates or dangerous goods documents. Unfortunately, the transfer of documents as an image does not allow for full automation of customs clearance processes. To achieve this, the invoice information must be transferred in a machine-readable format. This is referred to as a digital customs invoice, also known among carriers as a “paperless invoice” or “commercial invoice data”. All data that must appear on the invoice is transmitted to the carriers via an interface. Specifically, this involves the data from the invoice header and the invoice items at item level:
- Invoice header:
- Incoterm (delivery term)
- Invoice date
- Invoice number
- Place of destination / place of delivery condition
- Reason for export
- MRN (if available)
- Address and contact details of the consignor, consignee and responsible importer
- Invoice items per article:
- Item number
- Goods tariff number/HS codes
- Description of goods (EN)
- Number of items / unit of measure
- Price per item
- Weight (net/gross)
- Country of manufacture
With UPS, it may not be necessary to transmit the customs invoice when using the digital invoice, as UPS can create a customs invoice itself using the transmitted customs data if required. It is important to coordinate with the carrier and clarify the options in detail. Both procedures are free of charge. However, the first carriers will charge a surcharge for retaining the paper invoice. If this is not implemented, shippers will therefore incur additional costs. However, digitization is already leading to cost savings due to the elimination of the new surcharges and the reduction in process costs, as the printing of documents, assignment, attachment and all subsequent costs resulting from errors are eliminated. To use the services, it is necessary to register with the carrier. This involves receiving access data for data transmission. Each carrier has its own modalities, and the interface and data format are also carrier-specific. It is therefore advisable to coordinate closely with the carrier. The functionalities are usually already included in the carrier portals, so that additional adjustments are not necessary. Data entry is largely manual, which is time-consuming. In addition, every employee must be trained in how to use the tool. When using several carrier portals, the time required increases significantly and errors are unavoidable when working in this way. Optionally, interfaces can also be set up in the pre-system. These interfaces are carrier-specific, and each carrier has its own specific requirements for the interface, formats and data transfer. This means a considerable amount of work for the IT department. Changing carriers therefore means a great deal of coordination and programming work, both for your own IT department and for the provider of the ERP/WMS system. This means a loss of flexibility and, in some cases, high conversion costs. Ideally, the transfer of documents and information should be handled by a dispatch system. The shipping system receives all the information required for shipping from the leading system (ERP/WMS etc.) via an interface and prepares it accordingly for the freight service providers. It prints the shipping labels partially or fully automatically at the packing stations. This means that all shipping processes are bundled and automated in one shipping system. This speeds up processing, avoids errors and therefore drastically reduces process costs within the company.