Finding the Right Customs Solution – a Cost Benefit Analysis

When trying to determine your solution for creating and managing customs declarations, you will need to ensure the strategy you select meets your budgeting and supply chain needs. A cost-benefit analysis can help with this. In this piece we will look at different potential examples for companies to help you build you own model. But first, lets take a look at some key questions. 

The first question you need to ask yourself, is ‘Could my shipments go at any time?’.

It’s an important question to answer first because this will inform if your solution requires 24/7 capability to interact with Revenue and Customs on your behalf. These resources will need the appropriate customs clearance experience.

The second question to ask yourself is, ‘Do we have the budget and resource to run this in-house?‘.

If creating a customs solution in-house for an ‘anytime’ shipping model, you will need a minimum of 5 customs experts to cover all hours in the week.

The third question is ‘Do we have the financial and time cost of software acquisition, integration and operation?’

A specialist clearance agency would be expected to have over 20 dedicated and experienced clearance agents in place at this stage. They would need to be capable of scaling with demand and have strong filing and data management procedures. Additionally, a specialist clearance agent will have procedures for keeping up with legislation, SOPs and a strong tax and audit-based approach.

 Below you will find some example cost benefit  calculations which can assist you in deciding your customs declarations strategy. 

 Example 1

A company who exports 300 shipments per month with shipments Monday to Saturday between 7am and 8pm

 In this case we are assuming an inhouse solution will require at minimum a team of 3: 2 juniors at €40k fully loaded; and one supervisor at €60k fully loaded giving a total of €140k in staff costs for an in house solution.

This would be versus €234k for a typical clearance agent based on a €65 per declaration cost.

Using Declaron the cost would be €144k (based on a €40 per declaration cost for a 300 declaration bundle).

No customs clearance experts need to be hired and the time spent by current staff should be 3 minutes to enter the shipping information for the declaration. Using our system, the time for obtaining clearance is reduced to 4 minutes with a 90% probability of no errors.

Example 2

A company who exports 100 shipments per month only shipping between Monday to Friday 9am to 8pm.

In this case you may try to cover all shifts with one junior customs clearance agent (fully loaded at €40k) and a Customs Clearance supervisor (fully loaded at €60k) giving a total of €100k in inhouse staff costs.

Again, taking a €65 declaration cost for a standard clearance agent the cost would be €78k.

Using Declaron the cost is €54k (based on purchasing a 50 declaration bundle, giving a per declaration cost of €45), but again, using our system, the time for obtaining clearance is reduced to 4 minutes with a 90% probability of no error routings. No customs clearance experts need to be hired to use Declaron and as a cloud-based solution there is no technical integration needed.

 Example 3

A company who imports 10 shipments per month only Monday to Friday, 9am to 5pm

In this case the cost is €60k for an in house Customs Clearance Expert, versus €7.8k for a typical clearance agent again based on a €65 per declaration cost.

Using Declaron the cost is €6k (based on customers purchasing a 25 declaration bundle at €50 per declaration). You also benefit from access to our customs clearance experts and the time for obtaining clearance is reduced to 4 minutes with a 90% probability of no error routings.