No Weak Links: The Different Roles of Customs Clearance and Trade Management in Keeping Global Supply Chains Compliant

Asian young teen working in shipping logistic cargo load area use tablet wireless technology to checking customs detail of import export container code.


From the outside, transporting goods across international borders may seem simple.

It’s a feat often taken for granted by people not involved in the supply chain industry. In reality, every successful cross-border delivery is the result of well-timed coordination, accurate documentation, and very specialized knowledge.    

Global trade is dependent on many things. At its center, customs clearance and trade management work together to make sure shipments are successfully delivered to another country. With compliance and regulatory requirements also to be considered, it can be confusing to understand the defined roles of customs brokers and trade management specialists in the process. Knowing so, however, is vital for importers and exporters to ensure the goods they’re responsible for make it to their destination. 

Assumptions and misunderstandings about the responsibilities different parties have with cross-border shipping often lead to problems. 

Roles and responsibilities defined 

Understanding the differences between customs clearance and trade management starts by recognizing the specialized roles these functions perform and the associated responsibilities: 

What is customs clearance and the role of a customs broker? 

In simple terms, the customs broker collects the necessary data and documents to perform the customs declaration activity as the shipment is being prepared to ship. They facilitate the clearance of goods through Customs by acting as a middleman between the importer or exporter and the Customs authorities. They are the team closely monitoring the details, ensuring the shipment physically clears customs. 

It is important to note that it is the importers’ and exporters’ responsibility to provide this information accurately and on time to keep a shipment on schedule. There are specific data requirements for every shipment, like the Harmonized System (HS) code, also known as the HTS code in the US. A Global Trade Management team can support HS determination to ensure compliance and the appropriate payment of duties.  

The truck is unloaded at a customs warehouse, behind a fence with a green sign, a customs control zone.

What is trade management? 

Trade management is the practice of understanding the complex requirements of cross-border shipping. For example, a trade management advisor can provide guidance on the right HS code to use to eliminate the risk of paying the wrong duties on your products, leading to hefty fines and penalties or overpayments. Unlike the transactional nature of customs clearance, trade management is about ensuring the proper planning has been done to facilitate clearing a shipment through customs and lowering your total landed costs. PSA BDP, for example, offers HS Classification services powered by Smart Classify and its Artificial Intelligence (AI) technology to help shippers determine HS codes with 99.9% accuracy to reduce penalties associated with inaccurate classification. 

Other important advice can include consultation on free trade eligibility as well as performing audits of customs brokers’ declarations to ensure compliance with regulatory requirements. 

Woman reviews data on multiple computer screens

Don’t overlook compliance 

Remember, every country has unique rules and regulatory requirements. Many shipments require approval by multiple government authorities e.g. in the US - FDA and EPA, in addition to customs. Companies must be certain they’re following the compliance regulations related to licenses and documentation required by all local government agencies (e.g., food, drugs, agriculture, sustainability, etc.). Trade management consultants are experts on what’s needed for specific countries and can support importers to understand these requirements. There is a lot at risk when things don’t go as planned.  

For example, a premium air freight shipment will always require extra urgency for clearance. Aside from the obvious need for the product ASAP by the consignee, delays at the border can include additional storage and detention costs. This only serves to add expense and time to an already costly and urgent delivery. Companies may also face other financial and/or reputational damages as non-compliance and delays in the supply chain can lead to unhappy customers, factory shutdowns or even court cases in worst-case scenario. 

Trade management advisors can help to provide the most accurate HS code and advise on regulatory requirements expeditiously, while the customs broker will perform the declaration efficiently so as not to hold up the shipment at Customs. Both roles are equally important in ensuring your supply chain runs smoothly. 

How PSA BDP keeps your supply chain compliant 

Customs clearance and trade management are separate but very connected parts of every global supply chain. Successfully executing just one, or one hundred international shipments, requires the functions to work together.   

Multi-national shipping is always complex, so companies should partner with experts who are well-versed in their functions to ensure their supply chain keeps moving.  

Whether you need qualified licensed brokers at any part of the globe to perform customs clearance or specialized Global Trade Management experts familiar with international trade regulations, PSA BDP has specialized teams who are able to support you in every part of your journey.