RISK MANAGEMENT STRATEGIES FOR CUSTOMS BROKERS

Agents of International trade include how they create and uphold documentation requirements and how Government
regulations must also be followed if doing so is necessary for operational efficiency and client satisfaction. This study
examines how customs brokers have adopted four categories of risk: documentation error, regulatory compliance and
legal risk, and operational risk. It also examines how the application and execution of different strategies by these
customs brokers result in an increase in operational and client satisfaction through an increase in risk management
effectiveness through various data analyses. Data were collected from fifty (50) customs brokerage employees using a
five (5) point Likert format questionnaire and then subjected to statistical analyses, such as percentages of responses,
one-way ANOVA and chi-square. The statistical analyses and data support the following conclusions: that
documentation errors were the predominant issue (80% affirmation); that the impact of the application and execution of
risk management practices upon client satisfaction and operational operations by customs broker/forwarders at 80%
affirmation; that there is a high amount of technology adoption by customs brokers, particularly with the use of
ICEGATE, but a lack of use and/or awareness of EDI and RMS; and that, across all ages and years of experience,
customs brokers have a similar perception of the impact of risk management, indicating that there is a consensus in the
industry on the subject of risk management. Furthermore, documentation discipline, regulatory compliance and strategic
use of technology are critical components of effective risk management within the Indian customs brokerage industry,
and therefore it is recommended that future studies continue to examine what aspects of documentation discipline,
regulatory compliance and strategic technology use can improve risk management within the industry.
KEYWORDS: Risk Management, Customs Brokers, Customs House Agent (CHA), ICEGATE, CBIC, Documentation
Compliance, EDI, RMS, International Trade, Customs Clearance, India