Technological Advances in the Supply Chain and the New Role of AEO

Technological advances in the supply chain are undoubtedly affecting today’s logistics. Quoting the president of Cisco, “the only thing we can be sure about is that in the near future we will do things in a very different way”. 40% of businesses will not operate in the future as they operate today.

Today’s logistics has an intense dependence on technological tools, which have radically transformed trade related processes. The advances in this translate into market competitiveness. This trend can be summarized in one sentence: “Global competition has ceased to be between companies to become a competition between supply chains.”

All of us in the logistics chain are rapidly adopting the technological change, moving into what is known as “collaborative logistics”. The objective is to improve operational efficiency, security in transactions, management of resources and the ability to respond fast to decisions being taken every day. The goal is to be competitive in international trade.

The cloud, big data, block chain, artificial intelligence, internet of things, 3D printers, etc. are part of the new trade environment. We continuously integrate technological innovations and in some cases we explore them while their robustness for the business environment is being developed.

When things start to connect, traceability, both internal and external to the company, becomes a requirement. We need to know at all times the origin, placement, consumption and use patterns of a product, in order to correlate it with client demand factors that contribute to the perceived quality of the products and increase their value for the final consumer.

In parallel, we witness the development of multipurpose and multi-directionality platforms where all the actors interact in the supply chain. All the operators who are part of the supply chain will be incorporated into a technology platform concept, applicable to the specific supply chains where each of them interacts.

In this sense, trust, efficiency, security of transactions, flexibility of decision making, interconnectivity, results, and … maximization of costs and investments are increasingly important.

Connectivity with customs

Technological platforms must now have an agile, secure and robust interconnectivity with the systems of customs control and management. Transactions and processes involved in the international exchange of inputs, processes and products, can be linked with information supporting their characteristics and origin; full identification of all participating operators; Real-time recording of the operations carried out and, above all, the integral visibility of the merchandise along its entire route.

Taking into account all of the above, the Authorized Economic Operator (AEO) plays an important role, not only in strengthening the security of the logistics chain through the trade flow, including process control, but also by generating competitiveness for international trade.

We talk about simplified procedures, less use of documents, preferential lanes, fewer revisions for those who are already certified as AEO and all the supply chain security measures involved, to finally achieve that the customs become invisible.

Far from wanting to say that they do not exist, we aim for them becoming invisible to all those who are registered and certified, in such a way that customs and authorities can make more assertive inspections with a complete risk analysis.

Traditionally customs were the first point of information and inspection of cargo. Today customs should be the last checkpoint since there is a lot of prior information that with a good risk analysis can determine whether the cargo should be physically revised or not . In a very similar way to what is done today in the United States with the “Global” program, only if you travel regularly to a country and you are previously registered in the global program, it is known who you are and where are you going, so they do not normally check you anymore on immigration, unless you change your route or represent a risk. The same should be for the movement of cargo. Only cargo that may represent risk for a country should be usually checked. Thus, customs become invisible.

What is the next challenge? A key challenge is increasing Mutual recognition between countries for the authorized economic operator. Without mutual recognition every exporter or importer or member of the logistics chain has to work to be certified in one country and then in another and then in another in which there is no mutual recognition. Mutual Recognition Agreements and technology enable the New Role of the Authorized Economic Operator.