Customs Services Market Procurement Intelligence Report

The market for Operation of Facilities and its sub-segments such as Customs Services are at an interesting intersection. Suppliers are shedding the category expert tag and moving up the value chain to offer an integrated approach to their services. With this new approach, suppliers can offer a wide portfolio of services and position themselves for large contracts that go beyond just Customs Services.

Outsourcing of Customs Services now represents a significant part of the global spend on this category, driven by value derived and a growing number of vendors who keep innovating with new services and value propositions.

As market presence of companies become global, there is a growing preference towards service providers who can provide services seamlessly across the globe and have excellent understanding of local regulations and culture.

Trends like these and many others discussed in this report are necessitating a relook at the way Customs Services is procured and the procurement cost saving opportunities that exist.

It has become imperative for category managers to remain as agile as possible in terms of their procurement practices. However, it is not always easy to quickly spot and implement alternative practices in a category like Customs Services. To help quick decision making, this report advises on several procurement best practices that have worked well for category managers.

For example, Category managers must explore opportunities to integrate planning and management activities of categories using analytics, to gain better control over category spend. This will also allow them to consolidate their supply base easily, as well as to segment suppliers based on requirements and spend on each supplier.

Buyers should evaluate the true costs of each product and service within the scope of work for supplier, and also understand the hidden costs associated. This can help them to set accurate targets for cost reduction for their suppliers, and effectively monitor and evaluate their performance against industry benchmarks.

Buyers should set a baseline against which the performance of suppliers can be benchmarked along with setting measurable/quantifiable KPIs. Defined KPIs provides suppliers with clarity on the scope. Besides setting standards for operations, pricing, and performance, KPIs must provide tangible goals in terms of the quality of solutions.

Customs Services procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Customs Services procurement. Some examples include: