Clearing agents are professionals who handle the customs clearance of goods that cross international borders. They act as intermediaries between importers, exporters, and customs authorities, ensuring the goods comply with each country’s relevant laws and regulations.
Clearing agents also provide their clients with logistics, transportation, warehousing, and insurance services.
The clearing industry is a vital part of global trade and economy—more than 50,000 clearing agents worldwide process over 98% of international trade transactions. Nigeria’s clearing industry is estimated to be worth over N500 billion annually and employs over 100,000 people.
However, the clearing industry faces many challenges and opportunities in the current market. Some of the challenges include the increasing complexity and diversity of customs regulations, the rising competition and expectations from clients, the growing risks and uncertainties of the global trade environment, and the rapid changes in technology and innovation.
Some opportunities include the expanding trade volume and potential, the emerging markets and sectors, the increasing demand for value-added services, and the digital transformation and automation of the clearing processes.
Therefore, it is crucial for clearing agents to increase transparency in their services, as it is the foundation of any successful business relationship. Trust can help clearing agents overcome challenges, seize opportunities in the market, and achieve better results for themselves and their clients.
Reason 1: Trust is essential for building long-term relationships with clients and partners
One of the main reasons that clearing agents need to increase trust in their services is that it is essential for building long-term relationships with clients and partners. Conviction can increase customer loyalty, satisfaction, and retention, which are critical factors for the success and growth of any business.
According to a study by the Nigerian Institute of Transport Technology, trust is one of the most important determinants of customer satisfaction and loyalty in the clearing industry. The study found that customers who trust their clearing agents are more likely to be satisfied with their services, to recommend them to others, and to repeat business with them. The study also found that trust can reduce the perceived risk and uncertainty of the customers and increase their confidence and commitment to the clearing agents.
Similarly, trust can help clearing agents build solid and lasting relationships with their partners, such as customs authorities, shipping companies, freight forwarders, and other clearing agents. Trust can facilitate communication, cooperation, and coordination, enhancing mutual understanding and respect. Trust can also prevent or resolve conflicts, disputes, and misunderstandings that may arise in the clearing process, improving the service delivery’s efficiency and effectiveness.
Therefore, trust is a valuable asset for clearing agents, as it can help them create and maintain long-term relationships with their clients and partners and achieve mutual benefits and satisfaction.
Reason 2: Trust is a competitive advantage in a crowded and complex market
Another reason why clearing agents need to increase trust in their services is because trust is a competitive advantage in a crowded and challenging market. Trust can differentiate clearing agents from competitors and help them attract and retain more business.
The clearing market is highly competitive and complex, as many clearing agents offer similar services, and many factors affect the quality and cost of the service, such as customs regulations, exchange rates, tariffs, taxes, fees, delays, and risks. Therefore, customers have many choices and challenges when selecting a clearing agent, and they often rely on trust as a critical criterion for their decision.
According to our inquiries amongst importers, trust is one of the most influential factors for customers’ choice of clearing agents in Nigeria. The report found that customers prefer clearing agents who are honest, reliable, transparent, and accountable and who can deliver their goods safely, timely, and accurately. The report also found that customers are willing to pay more for clearing agents with high trust and reputation in the market.
Therefore, trust is a valuable asset for clearing agents, as it can help them stand out from the crowd and win more customers. Trust can also help to clear agents to retain their existing customers, as customers are more likely to stay loyal and faithful to clearing agents who have earned their trust and confidence.
Reason 3: Trust is a risk management strategy in a volatile and uncertain environment
A third reason clearing agents need to increase trust in their services is that trust is a risk management strategy in a volatile and uncertain environment. Trust can reduce the likelihood and impact of disputes, errors, fraud, and litigation, common and costly risks in the clearing industry.
The clearing industry is exposed to various risks and uncertainties, such as changes in customs policies and procedures, fluctuations in exchange rates and prices, delays and damages in transportation and delivery, errors and omissions in documentation and declaration, fraud and corruption in customs and shipping, and litigation and arbitration in case of disputes and conflicts.
These risks can cause significant losses and damages for clearing agents and their clients and affect their reputation and credibility in the market.
Trust is one of the most effective ways to mitigate and manage the risks and uncertainties in the clearing industry.
The report found that trust can reduce the frequency and severity of disputes, errors, fraud, and litigation by enhancing the quality and accuracy of the service, improving the compliance and cooperation with the customs and other authorities, preventing and detecting fraud and corruption, and resolving the issues and problems amicably and fairly.
Thus, reliance is a valuable asset for clearing agents, as it can help them protect and preserve their interests and investments and avoid or minimize the losses and damages caused by the risks and uncertainties in the clearing industry.
In conclusion, we have discussed why clearing agents need to increase trust in their services and how they can do that. We have seen that trust is essential for building long-term relationships with clients and partners, trust is a competitive advantage in a crowded and complex market, and trust is a risk management strategy in a volatile and uncertain environment.
Trust can help clearing agents overcome challenges, seize opportunities in the clearing industry, and achieve better results for themselves and their clients.
Therefore, we recommend that clearing agents take the following steps to increase trust in their services:
- Be honest, reliable, transparent, and accountable in their dealings with clients and partners, and deliver their promises and expectations.
- Provide high-quality and accurate service and comply with each country’s relevant laws and regulations.
- Communicate effectively and frequently with their clients and partners, and keep them informed and updated on the status and progress of their service.
- Seek feedback and suggestions from their clients and partners, and improve their service based on their needs and preferences.
- Invest in technology and innovation, and adopt the best practices and standards in the clearing industry.
- Resolve any issues and problems arising in the clearing process and handle disputes and conflicts fairly and amicably.
We hope that this article has been informative and helpful for you. If you have any questions or comments, please get in touch with us. We would love to hear from you. Thank you for reading.