Customs Management within Multinational Companies

Abstract

Every international shipment is subject to customs control in the country of export as well as in the country of import. Yet, customs management as a critical logistics activity within wider international supply chain operations barely features in the academic literature. This study seeks to help fill that gap by examining how multinational firms manage their customs affairs. It draws on an interview series with customs managers at multinational companies. The study finds that the number of customs professionals within these firms can be very small (in most cases less than 20 at the corporate level). They rely heavily on the use of ICT and Standard Operating Procedures. They are largely motivated by ensuring that their organization is compliant with applicable customs ules and procedures. They also ensure that the organization can deliver goods to end customers without delay at the ports and borders – which in some industry sectors (e.g. Express Carriage or Media) is a key strategic priority. Overall, the companies for which the interviewees work appear to be risk-adverse. Although they do utilize special procedures that confer fiscal and operational benefits (e.g. duty drawback or inland clearance), most interviewees reported that there are many instances where such procedures are not taken advantage of. Apart from enriching the literature of logistics and supply chain management, findings will also be of relevance to policy makers who seek to understand how customs is managed in practice – especially with regards to developing trade facilitation measures or rolling out supply chain security programmes.

Note: Downloadable document is in Spanish.

Keywords: customs compliance, import duties, export procedures, multinational enterprise