Los Angeles, CA (PRWEB) August 09, 2014
Customs brokerage services have a buyer power score of 3.7 out of 5, indicating moderate buyer power. According to IBISWorld procurement analyst Hayden Shipp, “buyer power is constrained by buyers' general dependence on customs brokers.” While US law does not require importers to use a licensed broker, doing so usually reduces the time and financial costs of importing. The regulations that affect importers change regularly, and depend on trade agreements, trade restrictions and duty rates. The involvement of many government agencies in regulating products that cross the border further enhances the complexity of customs clearance. The potential legal costs and shipping delays stemming from product misclassification sway most importers to use a licensed broker rather than guide goods over the border themselves. Self-brokering is the only substitute for this service, and while it eliminates broker fees, it is generally only cost effective for major companies with huge import volumes.
Several market characteristics favor buyers and boost negotiating power. First, competition among brokers is high due to the market's fragmentation. Thousands of firms provide customs brokerage, and none have large enough market share to dictate market prices. “As such, price growth in this market is mild and nonvolatile,” says Shipp. Additionally, buyers can procure services through several types of supplier. Integrated carriers and freight forwarders can bundle customs brokerage with freight transport or other logistics services, allowing buyers to streamline the procurement process for international shipping and reduce total costs. Additionally, lead times are short in this market by necessity; customs brokerage complements international shipping, which is time sensitive and often purchased on an ad hoc basis. As such, many brokers offer lead times as short as one or two days.
Buyers should seek out brokers with experience in importing their type of product and representation at their preferred ports of entry. Buyers are advised to try a new broker's services with a one-time clearance before entering a longer contract. Also, buyers should ensure that their broker provides a transparent fee schedule and access to documentation filed on their behalf. The largest vendors in this market are UPS, FedEx, Expeditors International and DHL.
For more information, visit IBISWorld’s Customs Brokerage Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of customs brokerage services. Customs brokers, also called clearing agents, guide imported goods through customs by providing a range of services, including classifying goods, preparing relevant documents, passing documents to governmental authorities, calculating and paying taxes and duties, arranging inspections and facilitating communication between the importer and governmental authorities.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.