Expect the Unexpected: 7 Essential Risk Mitigation Strategies for Customs Brokers

1. Diversifying ABI Software Platforms

The reliance on ABI software is an undisputed best practice in the customs brokerage industry. Unfortunately, as we’ve seen, outages, though infrequent, can occur. These can stem from issues beyond a software vendor’s control, like problems with third-party cloud hosting services or API connections with US Customs.

To combat this, savvy brokers, as many as 30% of high-volume brokers, are now investing in more than one customs compliance software platform. This redundancy isn’t just a safety net; it’s a smart business move. The cost of a backup system often pales in comparison to the losses incurred from even a day’s delay in filings.

By having an alternate system ready to go, brokers can maintain continuity in their most critical operations, keeping cargo moving and customers happy.

2. Strengthening Cybersecurity Measures

The digital nature of modern customs brokerage makes cybersecurity paramount. A breach can lead to significant operational disruptions. Regular security audits, stringent cybersecurity protocols, and continuous employee training can fortify your defenses.

Educating your team about the latest phishing scams and potential digital threats is as crucial as the technology you use to protect your data. Even CBP is taking action, recently releasing a guidance document containing best practices specifically for customs brokers on how to prepare for and respond to a cyber-attack.

3. Building Strong Relationships with Technology Partners

Your technology partners, including customs compliance software vendors, play a crucial role in your operational integrity. Building strong, collaborative relationships with them ensures you get swift support when needed.

Regular meetings, feedback sessions, and understanding their contingency plans can give you a clearer picture of how equipped they are to handle crises, thereby allowing you to plan accordingly.

4. Implementing Regular Data Backups and Recovery Plans

Data is the lifeblood of customs brokerage. Regular backups are essential to safeguard against data loss due to system failures or cyber-attacks. Equally important is a well-orchestrated data recovery plan, ensuring minimal downtime and quick restoration of operations in the event of data compromise.

5. Training and Cross-Training Staff

Your employees are your greatest asset in times of operational crises. Training and cross-training your staff can prevent a complete standstill when key personnel are unavailable.

Ensure that multiple team members are trained in critical tasks. This not only builds redundancy but also fosters a more versatile and resilient workforce.

6. Establishing a Robust Communication Plan

Communication is crucial during operational disruptions. Having a clear plan on how to communicate with clients, partners, and employees during such times is essential. This plan should include protocols for timely and transparent communication to maintain trust and manage expectations effectively.

7. Protecting your Business with Insurance

Customs brokers should also prioritize comprehensive business insurance coverage to safeguard against various professional risks. Key among these is errors and omissions insurance (E&O), which is essential to protect against claims arising from mistakes or negligence in their services, such as errors in documentation or misclassification of goods.

Additionally, general liability insurance is crucial to cover bodily injury, property damage, and other injuries related to business operations. Cyber liability Insurance is increasingly important these days, considering the substantial amount of sensitive data customs brokers handle, providing coverage against data breaches and cyber threats.

A combination of technological, procedural, and human resource strategies is key to building a resilient operation. By implementing these measures, customs brokers can not only safeguard against disruptions but also enhance their overall operational efficiency and reliability.

 Key Takeaways

• A multi-pronged approach combining technological, procedural, and human resource strategies is essential for building a resilient customs brokerage operation.
• Customs brokers are investing in multiple customs compliance software platforms to mitigate risks from outages, ensuring operational continuity and customer satisfaction.

• Emphasizing regular security audits, stringent protocols, and continuous staff training to protect against cyber threats and operational disruptions.

• Establishing strong collaborations with technology vendors for better support and understanding of their crisis management capabilities.