Background: Ex-Works is a logistics company specializing in international freight forwarding and customs broker for shipments via courier service. We have a strong network of partners in various regions, particularly in Southeast Asia, and cater to small and medium-sized enterprises (SMEs) as well as individual consumers who require efficient international shipping solutions. Ex-Works Cargo prides itself on offering cost-effective, reliable, and streamlined logistics services and has recently expanded its portfolio to include a comprehensive customs clearance service for shipments arriving via courier into the Philippines.
Customs Broker Challenge
Problem Statement: Ex-Works Cargo noticed a growing demand for end-to-end logistics solutions among their clients in the Philippines, especially for small shipments arriving via international courier services (e.g., DHL, FedEx, UPS). Many of their customers were facing challenges with customs clearance, leading to delays, increased costs, and sometimes the non-release of goods due to non-compliance with Philippine import regulations.
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The company aimed to address the following key pain points:
- Unpredictable Customs Clearance Process: The Philippines’ Bureau of Customs (BOC) can sometimes cause delays for shipments arriving via courier, especially when shipments do not meet all regulatory requirements.
- Documentation Complexity: Many customers were unaware of the specific documentation required for smooth customs clearance, including the value declaration, proper tariff codes, and accurate invoices.
- High Costs: Courier companies often added handling charges for customs clearance, increasing the total shipping cost for the end customer.
- Lack of Transparency: Customers had little visibility into the status of their shipments, which led to frustration and uncertainty about when their goods would arrive.
Objective: To provide an efficient, reliable, and cost-effective customs clearance service for shipments arriving via courier, ensuring that clients’ goods clear customs quickly and without issue.
Solution
Ex-Works Cargo’s Approach to Customs Clearance:
Customs Clearance Service Integration: Ex-Works Cargo began offering a full range of customs clearance services for shipments arriving through courier services. This service included the preparation and submission of all necessary customs documentation, such as:
- Import declarations
- Commercial invoices
- Bill of lading (if applicable)
- Product classification and tariff code determination
- Value-added tax (VAT) compliance (if applicable)
Ex-Works Cargo liaised directly with the Philippine Bureau of Customs to expedite the process and reduce delays.
Dedicated Customs Clearance Team: The company established a specialized customs clearance team with local expertise in the Philippines. This team was equipped with knowledge of the latest regulations, duty exemptions, and import restrictions, allowing them to navigate the complexities of customs requirements and ensure compliance.
End-to-End Visibility: Ex-Works Cargo implemented a tracking system that integrated with courier carriers’ tracking portals to provide clients with real-time updates on their shipments. Customers were able to see the progress of their shipments through the customs clearance process, providing transparency and reducing the uncertainty about delivery times.
Cost Optimization: Ex-Works Cargo negotiated with courier companies to reduce additional handling and clearance charges. By leveraging its established relationships with customs authorities and courier firms, Ex-Works Cargo was able to offer competitive pricing for customs clearance services.
Customer Education: Ex-Works Cargo implemented a customer education program, which included clear guidelines on how to prepare shipments for customs clearance. This helped customers avoid common mistakes, such as incorrect classification of goods, and reduced the frequency of cargo being held or delayed by customs authorities.
Customs Broker Execution
Process Workflow:
Initial Shipment Notification: Once a customer makes a shipment booking, Ex-Works Cargo is notified via the courier tracking system. The team immediately begins the process of preparing customs clearance documentation based on the shipment details.
Document Preparation: The customer provides the necessary documentation (invoice, packing list, etc.) to Ex-Works Cargo, which cross-checks all the details and ensures compliance with the Philippine import regulations. Ex-Works Cargo also determines the correct tariff classification and assesses any applicable duties or taxes.
Customs Declaration: Ex-Works Cargo submits the customs declaration electronically to the Bureau of Customs (BOC). If there are any issues, the customs clearance team works directly with the BOC to resolve them before the shipment is held.
Payment of Duties and Taxes: Upon clearance approval, Ex-Works Cargo assists customers in paying any required duties and taxes, which are calculated based on the product’s value and applicable tax laws.
Delivery Notification: After customs clearance is completed, Ex-Works Cargo arranges for the shipment to be delivered to the final destination. The customer is notified of the delivery schedule and provided with tracking information.
Results
Outcomes for Ex-Works Cargo’s Clients:
Faster Customs Clearance: By leveraging their expertise in the local customs process, Ex-Works Cargo significantly reduced the time required for customs clearance. Shipments that previously took 3-5 days to clear customs now averaged 1-2 days, improving overall delivery times for clients.
Reduced Costs: Clients saw a reduction in the total cost of their shipments due to Ex-Works Cargo’s competitive pricing and reduced courier handling charges. In some cases, customs duties and taxes were lower than expected, thanks to accurate classification and valuation.
Improved Client Satisfaction: Customer satisfaction improved because clients had greater visibility and fewer issues with delayed shipments. The transparency of the process and real-time updates alleviated concerns and allowed customers to plan for the arrival of their goods more effectively.
Regulatory Compliance: By ensuring that all documentation was in order and that all customs requirements were met, Ex-Works Cargo minimized the risk of shipments being delayed or confiscated due to non-compliance. This led to a higher rate of successful customs clearance and fewer penalties or fines for clients.
Conclusion: Ex-Works Cargo’s provision of customs clearance services for courier shipments into the Philippines successfully addressed several critical pain points for customers. By combining local expertise, cost-effective service, and a commitment to transparency, Ex-Works Cargo has become a trusted partner for businesses and individuals shipping goods into the Philippines. The streamlined process not only improved efficiency but also enhanced customer satisfaction, reinforcing Ex-Works Cargo’s position as a leading logistics provider in Southeast Asia.
