Global Trade: The solution making UK customs plain sailing

Our latest UK CFO Survey (CFO Survey | Deloitte UK) shows that even before the recent uncertainties around tariffs came into play, CFOs identify geopolitics, including tariffs, as the biggest external risk facing their business. Dealing across borders is far from straightforward.

In this spotlight on Deloitte’s Global Trade service, we look at the challenges organisations are grappling with and how outsourcing, and technology, can turn obstacles into opportunities.

After three decades of ‘free-flowing’ trade within the EU, geopolitical upheaval has transformed the European landscape, adding layers of complexity. In 2024, more than 70 countries went to the polls, making it the largest election year in history. New leaders took office in several major economies, with potential repercussions for imports and exports.

The climate emergency, a raft of regulation and the rise of technology have also placed huge demands on companies and their supply chains. Due to the amount of data now required, businesses are looking at ways to automate and digitalise where the landscape allows it.

Media interest in the global picture has placed this issue high on senior stakeholders’ agendas, leading many organisations to question the traditional model where carriers of a company’s freight are also responsible for customs clearance at the port. It’s created the appetite – and the need – to do things differently.

Tech and data can ease the burden at borders

New measures designed to reduce our impact on the planet, like the EU Deforestation-free Regulation and Carbon Border Adjustment Mechanism, are generating their own set of challenges for companies. Add these to what’s already in place – requirements for food, plant and animal imports; controls on organics; licensing for life sciences; the plastic packaging tax – and the burden can feel overwhelming, especially when there are hefty consequences if you get it wrong.

Miscalculated taxes, border delays and supply chain interruptions can hit companies’ profitability hard, and falling foul of regulations can lead to penalties and authorisations being revoked.

“Retailers, for example, are really good at manufacturing and selling their products to shoppers, but they may not see customs as core to their business,” says Deloitte partner Bob Jones. “The border process is being loaded up with more and more regulatory requirements and clients really need an answer.”

Deloitte’s Global Trade team provides exactly that – and for some clients, it’s helping to optimise ways of working and reduce duty bills, in some cases by millions. The outsourced service offers clients advisory support as well as innovative digital solutions. Our experts can manage all aspects of customs declarations, compliance and cross-border transactions to keep goods flowing, leaving clients to do what they do best.

At the heart of the service is our Global Trade team, primarily based near Felixstowe, the UK’s largest seaport. Set up to manage the enormous increase in customs declarations after Brexit, it solves businesses’ complex challenges with the rest of the national team.

“Put simply, we make sure the right data is in the right place at the right time,” explains Bob. “We pick up data from the client's ERP system, for instance SAP or Oracle, and supplement it using our own portfolio of applications that can help with all aspects of trade, like origin and classification. Then we ‘wrangle’ the data – we slice and dice it and move it on to the customs system.”

Think back to the days of storing your personal papers in filing cabinets. Well, Global Trade removes the cabinets. Documents are stored virtually and can be accessed quickly, which is essential in such a heavily regulated environment.

“We have minimal impact system-wise for the client, but we offer maximum value by doing as much as we can on our side of the fence,” Bob adds.

Why organisations are embracing outsourcing

Global Trade is helping clients to only pay duty where and when they need to. For one High Street retail chain, which sources products from across the world, tax savings look set to reach £10 million a year.

“This is just one potential benefit,” says Deloitte partner Caroline Barraclough. “There are time savings too, and the comfort of having someone with the right skills handling this. Also, the technology means the client needs a smaller team looking after the day to day, so those people can spend their time on things that add more value, to the business and their career.”

There are many reasons why outsourcing works for companies. And when it comes to price, it can be a surprisingly cost-effective model compared to the expense of bringing the right talent in-house, especially when customs experts can be hard to find.

Deloitte’s latest Global Outsourcing Survey, which brings together insights from more than 500 international business and technology leaders, reveals that access to talent is the number one driver behind outsourcing decisions. It also shows:

1. Investments in third-party outsourcing are expected to increase for 40% of respondents.
2. Only 20% planned to reduce their spend.
3. A total of 67% reported adopting managed or operate services, up from 45% two years ago.
4. Organisations that adopt these services had a positive experience – 88% of respondents said they met or exceeded satisfaction levels.
5. Among organisations that don’t currently use managed or operate services, 71% reported a planned increase in investment.

The model of using outsourcing to supplement employee numbers has also given way to prioritising supplier relationships that add value. Today, companies want to buy specialist skills and results, not just extra hours.

“We definitely focus on that value aspect,” continues Caroline. “We can disrupt, but we can support clients wherever they are on their digital journey, whether they are at the start or keen to safely explore new solutions like AI and robotics.”

Our advisers are the difference

Why Deloitte? What sets Global Trade apart from other outsourced solutions?

“It’s the advisory aspect of our service,” Bob explains. “It helps us to really get to know and understand our clients and offer practical solutions that work. That’s what makes us different – technology providers can’t get under a company’s skin the way we can.”

And what are the main take-aways for companies exploring options for outsourcing their customs requirements?

1. You can do things differently. The broker-led approach isn’t the only option.
2. Technology will make sense of the chaos.
3. Greater scrutiny of supply chains can reap rewards.

“Even with the challenges of Brexit, there were a lot of opportunities. Clients have had to look closely at their whole value chain rather than letting it tick along in the background with a broker, and that level of focus has unearthed savings and efficiencies that may never have been found,” says Caroline.

“It may feel like a perfect storm right now, but there is a positive story too. There are benefits to doing things differently.”