When Retail Disruption Bites: Trade Compliance is More Important Than Ever
Emmett Young, key account director at Customs Support Group, looks at the impact of ongoing global uncertainty on retail supply chains
Just as the logistics sector begins to absorb and adapt to one retail disruption, new challenges continue to emerge. Ongoing geopolitical tensions in key regions are contributing to rising energy costs and pressure on critical shipping routes such as the Strait of Hormuz, adding further complexity to retail supply chains across the UK, Europe and the US.
Customs and trade compliance has always been an essential part of retail supply chains. Disruption often highlights more visible pain points such as delays or rising fuel costs. However, when margins tighten and trade flows become less predictable, customs and compliance becomes a critical control point in the movement of goods.
Many organisations remain understaffed and underprepared in this area. They continue to operate reactively rather than proactively, often without the expertise needed to move goods across borders efficiently. In an increasingly unstable geopolitical environment, that combination poses serious risk.
A Retail Disruption Hydra: War, Tariffs & Regulatory Hurdles
Few sectors have escaped the disruption created by shifting US trade and foreign policy. For retailers, the latest round of US tariffs has created significant pressure. What was initially expected to be a marginal cost increase has quickly escalated into a more complex challenge, forcing brands to rethink how they move goods in and out of the US market.
At the same time, regulatory changes are complicating market entry. The removal of the $800 de minimis exemption has proved just as disruptive as the tariffs themselves. Shipments that previously moved with minimal customs intervention are now subject to duties and more detailed documentation requirements.
Low-value test orders and direct-to-consumer shipments have become more difficult and more expensive to manage. Carriers are increasingly adding clearance charges on top of duties, raising costs further for shipments where margins were already slim.
In many cases, customers are now responsible not only for the tax, but also additional processing fees – and sometimes even a margin applied to the duty itself. In an e-commerce environment where customers expect fast, affordable, and hassle-free delivery (and returns), this can quickly damage customer experience and loyalty.
Now, as conflict in Iran intensifies, there is further risk to an already fragile global supply chain.
For retailers, this creates a difficult balancing act. Customers expect shelves and online platforms to remain fully stocked and competitively priced, while costs continue to rise. At the same time, businesses cannot afford further disruption at the border.
Retail Disruption Raises Classification Risks
Correctly classifying goods has become a critical part of this balancing act. Both importers and exporters are navigating a more complex regulatory environment, with less margin for error.
Failure to classify goods correctly can lead to unexpected duties, fines, and delays. Businesses are often forced to absorb these costs or pass them on to customers – neither of which is ideal in an already pressured market.
CSG’s second Strategic Radar Customer Survey highlights the scale of the issue. As many as 70 per cent of businesses may be exposed to risk due to goods misclassification.
The report also shows that geopolitical uncertainty, volatile markets, and expanding regulations are pushing customs and trade compliance higher up the corporate agenda. However, many organisations still lack the knowledge and internal capacity to manage this complexity effectively.
More than half of businesses (50.5 per cent) face latent misclassification risk as they have not conducted a classification review. Fewer than half carry out regular checks, despite 28.3 per cent already experiencing negative consequences such as increased costs or customs audits.
This underlines the importance of strong governance and experienced oversight in ensuring goods are classified accurately and consistently.
Increased Reliance on Relevant Retail Disruption Expertise
As regulatory complexity increases, customs management is becoming more visible within organisations. However, operational customs activity continues to be largely outsourced.
Around 70 per cent of shippers do not maintain an in-house customs clearance team. Where internal teams do exist, they are typically small – often four full-time employees or fewer. While 22 per cent of companies have recently hired additional customs specialists, plans for further recruitment remain limited.
As a result, increasing compliance demands are more likely to be addressed through external support than internal expansion.
More than a third of companies (38 per cent) cite a lack of specialised customs knowledge as the main reason for outsourcing. A further third point to limited internal capacity, while just under 30 per cent see outsourcing as more cost-effective. Access to digital tools and support with fast-changing regulations also adds value.
Luckily, when in-house capacity is limited, partial outsourcing to trusted external partners is showing to be an effective approach to plugging organisational gaps. These external partners are increasingly coming to be seen as more than transactional service providers, becoming long-term enablers of resilient and compliant supply chains at a moment when the margins for error at the border are slimmer. The hydra of supply chain disruption has many heads. Retailers cannot afford to add customs and compliance to the beast when disruption is already biting.
Staying on top of constant regulatory change is not easy. For teams looking to stay informed and ahead of risk, Customs Support Talks, our 2026 webinar series, provides expert insight and real-world guidance on the issues shaping global trade. Register here.
