The report, titled ‘The Case for AI in Cross-Border Trade’, addresses the challenges faced by logistics providers and the ecommerce sector due to an increasingly diverse and complicated regulatory environment, including the US STOP ACT, Singapore's new GST rules, Dubai's customs duty charges, the UK Customs Declaration Service, Canada's CARM importing regime, the European Union's Import Control System 2 (ICS2), VAT in the Digital Age (ViDA), and the EU's Carbon Border Adjustment Mechanism (CBAM).
Traditionally, manual HS code assignment has been laborious, with one person typically capable of assigning only eight codes per hour. AI technology can automate this process, saving significant time and reducing errors. AI can quickly assign correct codes to thousands of packages within seconds, screen for denied parties, and accurately calculate taxes and duties throughout the sale process.
Companies like DPD, Skynet, Joom, and Wish already use Eurora's technology to ship millions of packages daily, as per the press release.
The growth of ecommerce and the resulting increase in the volume of packages sent internationally has prompted increasing scrutiny from regulators around fraud and tax evasion with cross-border trade. Countries have found that tighter controls offer more safety and more revenue. For example, the European Union collected over EUR 8 billion in the first six months of EU VAT ecommerce package implementation (starting 1 July 2021).
These new regulations require customised and high-quality data, which lies at the heart of the compliance challenges faced by the industry. The paper argues that data presents an opportunity to not only tackle compliance problems but also combat broader operational challenges, such as cross-border cart abandonment. It also highlights AI’s relevance to other aspects of cross-border trade, such as sustainability, tax collection, and transportation security.
The report’s authors said that the papers outline the advantages of AI adoption and highlights its role in keeping up with regulatory and policy changes and optimising business operations. As upcoming regulations around transport security, tax, and sustainability are expected to bring more disruption, AI will become not just an option but a necessity to deal with these changes.
Eurora’s representatives added that the volume and complexity of data required to ship packages internationally can be overwhelming. Processing shipments quickly and accurately is crucial for a company's profitability, especially with increasing regulatory enforcement. AI adoption is growing among businesses, and their data indicates that using AI technology for cross-border trade can save up to 96% in costs. This presents a significant competitive advantage as data plays an increasingly vital role in international trade.
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