Trade and customs compliance costs at ports

This article provides a review of the costs associated with trade and customs procedures at sea ports (trade and customs compliance costs). As such, the article draws on an ongoing body of research, including interviews with over 50 individuals within the UK port sector and the UK’s trade policy and customs community. Demand for good research in the assessment of trade and customs compliance costs is particularly urgent, especially in the context of the recent World Trade Organization Trade Facilitation Agreement and subsequent reform obligations at sea ports and borders. At present, research into trade and customs compliance costs is mostly limited to macro-economic models and broadly scoped international surveys with relatively little concern for the specific cost details. The author argues that a more detailed understanding of trade and customs compliance costs is necessary in order to help evaluate investment in trade facilitation-related measures and performance at ports. This article thus takes a bottom-up operations-informed approach to the examination of trade and customs compliance costs at sea ports and finds that they can be attributed to three broad areas: initial set-up and approval (authorisation) costs; transactional costs; and inspection costs. Each of these three areas is discussed in detail in order to help foster further academic research and analysis.