In a globalized economy, the flow of goods crosses not only national borders, but also customs borders. For market participants – from manufacturers to service providers – customs, with its varying and volatile national regulations, is a major challenge. The second article in our series on globalization, for which we spoke to Thomas Weins, CEO of customs service provider Gerlach Customs Germany, explains how to meet these customs challenges.
Customs Regulations and How They Affect the Globalized Economy
Basically, it’s quite simple: a customs duty is a tax levied on goods, capital, or services when they cross a customs border. The amount is determined by the state or confederation into which the goods are imported. Tariffs are intended to regulate cross-border trade, promote fair competition, and combat economic crime. The General Agreement on Tariffs and Trade (GATT) and the guidelines of the World Trade Organization (WTO) provide the framework for national customs regulations.
The reason why it is not always that simple is that national regulations vary widely and are constantly changing. In 2025, for example, new rules will come into force as part of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention). This agreement affects the EU and many of its trading partners.
The EU-Mercosur agreement between the European Union and the Mercado Común del Sur (Brazil, Argentina, Paraguay, Uruguay) was negotiated in December 2024 and has entered the legal review phase, and the EU customs reform, which provides for the creation of a central EU data hub and an EU customs authority, will come into force in 2028.
The Trend Towards Centralization in Europe
According to Thomas Weins, VP Customs & CEO Gerlach Germany, the EU customs reform is a response to the booming e-commerce sector, which is creating major challenges for European customs authorities due to the sheer volume of shipments that need to be checked. However, it is not only these aspects of customs law that politicians are concerned about but also issues of product safety. “The hope is that the increasing (data) volumes can be better controlled and that there will be more transparency across countries about the goods imported into the EU.”
The member states have taken a first step towards this centralization with the introduction of the New Computerised Transit System (NCTS) Phase 5, Weins explains. “There is a clear trend away from local customs systems in each country towards a single system that improves data exchange.”
Uncertain Global Tariff Development
Thus, the objective at the European level is standardization. This could be countered by the global evolution of customs regulations following the inauguration of the new US President. Customs is currently facing a number of uncertainties and challenges. The new Trump administration and its policies, which not only introduce additional tariffs but also make changes down to the smallest detail, are eliminating duty-free limits. In addition to these uncertainties, Thomas Weins anticipates that global trade will become more challenging for market participants. Millions of shipments will now be subject to customs duties for the first time or to higher fees. For Gerlach Customs this means a considerable additional workload.
“Customs is and will remain a complex challenge for global trade, and new issues will be covered in the future. Companies should prepare for the coming changes early on. This requires more and more experts who are familiar with global trade.”
Thomas Weins, VP Customs & CEO Gerlach Germany
Top Customs Challenges for Businesses
The process of customs clearance is complex enough. When a shipment crosses several customs borders in global trade, not only are repeated procedures necessary, but there may be very different requirements to comply with. All companies that trade products outside the European Union are concerned with the requirements of global trade. Therefore, the following aspects are crucial for these companies when dealing with customs issues:
- Compliance: Global trade and customs laws and regulations are complex and vary from country to country. Understanding and complying with different legal requirements for different countries and contracting parties is essential to avoid fines and time delays. Also in terms of import and sales taxes, there are often different tax regulations and tax rates.
- Volatility of trade agreements and domestic regulations: Changes to trade agreements or adjustments to national trade regulations can occur suddenly, affecting tariffs and conditions for imports and exports. Companies need to be informed and flexible to respond immediately to these dynamics.
- Tariffing: The Harmonized System (HS) of the World Customs Organization (WCO) forms the basis for the individual customs tariffs. Before goods can move in the global market, they must be classified according to the HS code. This requires HS knowledge. Errors in classification can lead to incorrect rates of duty and result in legal problems.
- Cross-cultural barriers can affect the quality of customs clearance in the global movement of goods. Intercultural competence (from cross-border knowledge of regulations to verbal communication) facilitates smooth customs clearance in different countries and prevents delays or misunderstandings.
How to Save Time and Costs in Customs
With all these challenges, effective customs management requires in-depth knowledge of legal and cultural issues. Companies must constantly adapt to changing regulatory frameworks and market conditions. Continuous training of employees in international trade and customs law is essential.
There are also technological solutions such as customs management systems. They facilitate the documentation of all trade activities and the implementation of control mechanisms that check each customs-related process for possible violations.
Furthermore, high-performance IT systems facilitate risk management in day-to-day customs operations. Issues such as cybercrime, data protection, and fraud prevention are becoming increasingly important. Risks must be identified and addressed early to protect businesses from loss and ensure compliance. Again, both are important: modern technologies and ongoing employee training.
“Knowing the changes in the regulations, good data quality and data availability guarantee smooth processes at the border.”
Thomas Weins, VP Customs & CEO Gerlach Germany
How Companies Can Benefit from a Competent Customs Service Provider
Partnering with customs service providers can not only speed up customs clearance but also save costs that would otherwise be incurred due to lack of experience and possible penalties. However, Thomas Weins believes it is not very helpful for companies to rely on a variety of carriers for their international trade activities, who in turn handle the customs formalities themselves or through third parties. This leads to a loss of control over the customs process, and irregularities are inevitable.
Single-source solutions are more promising. This makes it all the more appealing that Gerlach, the leading neutral provider of customs services in Europe, is a wholly-owned subsidiary of DHL Group. This combines both logistics and customs expertise under one roof.
“Customs is becoming increasingly complex and requires true specialists with the necessary customs expertise. As a customs service provider for more than 140 years and with more than 1000 employees, we have the knowledge and operational experience to support our customers. As part of the DHL Group, we are also involved in the policy committees of the EU Commission and the EU Parliament and are informed at an early stage to keep our customers’ supply chains running.”
Thomas Weins, VP Customs & CEO Gerlach Germany
Do you need support with your customs processes?
Contact our colleagues at Gerlach Customs. Gerlach is the leading neutral provider of customs services in Europe and offers the full range of customs services.
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Conclusion: Meeting the Customs Challenges to Seize the Opportunities of Globalization
Global trade opens up more opportunities for companies than potential problems with customs. And despite political developments in the United States, as well as in crisis and war zones, there is no general trend reversal towards regionalization, as the new DHL Global Connectedness Tracker indicates. Globalization and a worldwide sales market remain a great opportunity for all companies, but it also presents tasks and challenges, of which dealing with customs issues is only one example.
Especially for small and medium sized companies it is a considerable effort to keep up to date with all aspects of international customs law. Customs service providers such as Gerlach are happy to support you in all matters relating to the successful organization of your cross-border trade: from import, export and transit duties to complex customs solutions. If you need support with your customs processes, please contact our colleagues at Gerlach Customs.
