Customs Agents in International Trade

More than 85% of UK non-EU export value is facilitated by customs agents, yet little is known about how firms organize and adjust these relationships. This paper provides novel evidence on trader-agent relationships using transaction-level UK customs data from 2009 to 2019. We document a highly concentrated and skewed network structure: while most trader-agent links are short-lived and low value, a small number of persistent relationships account for the majority of agent-mediated trade. We show that agent use reflects two distinct strategic motives. Firms are more likely to rely on agents when entering new markets or introducing new products (exploration), but these relationships are shallow and short-lived. In contrast, when firms trade in markets aligned with their agent’s established expertise (exploitation), relationships are deeper and more persistent. Finally, exploiting the 2016 Brexit referendum as a major policy uncertainty shock, we show that firms more exposed to EU markets reorganize and deepen their reliance on customs agents. Our findings identify customs intermediation as an important organizational margin through which firms manage border frictions and trade policy uncertainty.