There are no songs written about breaking up with a customs broker, but it can be a painful, awkward experience nevertheless. If you’ve been with the same brokerage a long time, maybe you’re afraid of hurting the broker’s feelings. Or if things have been on a negative path for a while, perhaps you’re concerned about the broker being uncooperative.
You may just want to avoid any possibility of disrupting operations because you have so much else going on. Whatever the reason for delaying the inevitable, by prolonging a doomed relationship you could be putting your business at risk. Recognize when it’s time to switch customs brokers and follow through; the legal and financial future of your company may depend on it.
What does a good customs brokerage do?
If your business has never used a different customs brokerage, it can be hard to assess the current one’s performance. As a starting point, you should unearth the original service agreement and make sure everything originally promised is being delivered.
Beyond that, recognizing the work of an ineffective customs broker may require a reminder of what the good ones do. Read What makes a good customs brokerage? for a detailed explanation, but in general you can expect a broker to:
- Guide you through the first steps of any new operations
- Dedicate enough bandwidth to support day-to-day work responsively
- Offer forward-looking, strategic insights to help the business grow
- Stay on top of any regulatory or procedural changes affecting your business, and explain their implications clearly
- Be on call to help troubleshoot unexpected delays and costs
Preparing for “the talk”
Severing business relationships is easier in some instances – and for some people – than others. Regardless of how you expect your customs brokerage to take the news, a little preparation goes a long way. It’s smart to have at least researched potential replacements beforehand, and have documentation ready for fast onboarding when needed.
If your company uses shipping or recordkeeping software provided by the brokerage, review the terms of use. Consider speaking to an attorney about any data protection concerns. It may be possible to continue using the technology independent of the brokerage services, either indefinitely or until a new solution is identified.
For those feeling anxious about angering or hurting a broker’s feelings, keep these points in mind:
- The business is top priority, and a customs broker’s performance can have serious financial and legal consequences on its future.
- You don’t need to explain yourself, but if you want to, keep the rationale high-level and unemotional. A concise example or two may be appropriate, but know which ones you’d like to share ahead of time.
- The broker has almost certainly experienced similar conversations before, and doesn’t take them personally.
Signs that it’s time to move on
Sometimes there’s one incident that makes it glaringly obvious your business needs a new customs brokerage. Other times it sneaks up on you so slowly that you don’t even recognize unacceptable service until it’s pointed out. And if you didn’t have good service starting off but didn’t know any better – well, you should after reading this!
A mistake every once in a while is inevitable, and customs clearance processes are very complex. If an issue on the following list comes up occasionally in isolation, it doesn’t mean your customs broker is awful. When you see many of these problems pop up frequently, though, you may need to consider other options.
Delayed shipments
Something as simple as a missing form or incorrect tariff classification code can result in shipments getting flagged by customs. Your business doesn’t have time for that to happen, and neither do your customers. Brokers should help prevent silly mistakes from delaying shipments, and intervene on your behalf to expedite resolution when they’re unavoidable.
Unnecessary fees and fines
In addition to wasting time, delayed shipments often result in wasted money. Demurrage, detention, per diem and storage expenses, for example, add up quickly. Another way to throw money down the drain is by using the wrong tariff code. When brokers don’t know the Harmonized Tariff System well enough to code shipments correctly, they create two potential issues. On one hand, you could be paying more duties to clear customs than is legally required. On the other hand, which is potentially much worse, you could be underpaying. If your business is audited, the resulting penalties and overdue back-payments could be devastating.
Internal distraction from primary business
It’s a serious red flag when your employees spend so much time troubleshooting clearance issues that it becomes a distraction. To begin with, clearance issues should never be frequent enough to require extensive, ongoing in-house bandwidth. On rare occasions when there are problems with shipments in customs, the broker should step in and resolve them.
Compliance violations
Customs brokers are specially trained and licensed to offer regulatory guidance that enables clients to quickly and legally clear goods. Honest oversights can be explained and fixed, but once officials start associating your shipments with problems, they become less understanding. If your broker lets matters get to this point, your competence as a manager will be called into question too. Your broker should know the ins and outs of all customs regulations relevant to your business, and ideally your industry.
Unresponsive support
Imagine the frustration of going to the hospital with a broken arm, and hearing that all medical staff are vacationing. It can almost feel like that when an emergency spare part gets held up in customs and your broker’s MIA. If you have trouble reaching your broker when small issues come up, what will happen when a big problem arises? Granted, things come up and brokers deserve a work-life balance too, but you should never feel ignored by your brokerage. You should also know how to reach an alternate contact in case of emergencies if your broker isn’t reachable.
It’s not you, it’s your customs broker
If you’ve lost that loving feeling with your customs broker, it’s time to do something about it. The odds of spontaneous improvement are slim, and each day with an ineffective provider increases your financial and legal risk. With some research, you’re sure to find a better brokerage that truly deserves all that your business has to offer.
FAQ
Customs requirements can vary based on several factors, such as type of goods, transport mode and country of origin. As a result, clearance isn’t always straightforward. Customs brokers help prevent delays in compliance with applicable guidelines.
Customs brokers are specially trained and licensed to handle the documentation, transport and clearance of goods on behalf of clients. Internal resources usually lack the expertise and background to handle customs complexity, which can lead to costly missteps.
International trade can be highly rewarding in the steady hands of a seasoned expert. Read The smart approach to cross-border trade to find out how customs brokerages reduce cross-border trade complexity.
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