US Customs and Border Protection Industry Growth Opportunities

This study outlines the industry outlook for the US Customs and Border Protection. It examines the federal agency's FY 2025 annual budget, its strategic objectives, and new prime contracts awarded in FY 2024 to:

1. Identify industry drivers, restraints, and emerging growth opportunities
2. Detail the budgetary funding trends between FY 2023 and FY 2025 and highlight the major programs for FY 2025
3. Examine the FY 2024 contracting activities, including multi-year obligations, and identify leading contracting departments within the Customs and Border Protection agency
4. Explore the industry outlook for small and medium-sized enterprises
5. Analyze the industry's competitive landscape and highlight leading contractors and contracting activities

The growing digitalization, globalization, eCommerce, and global socio-political unrest will contribute to the mass flow of people and cargo in the United States, positioning the Customs and Border Protection agency for funding growth to address operational demands. Migration and security policy shifts and changes in federal administration may further accelerate the procurement of advanced systems during the study period. The Customs and Border Protection agency aims to rapidly integrate cutting-edge technologies, such as data analytics, artificial intelligence (AI), and machine learning (ML), to improve operational efficiency. Interoperability will take center stage as information-sharing among federal agencies takes precedence. Cost-effective, scalable, and flexible intelligence, surveillance, and secure communication solutions will be sought to address evolving security challenges.

Scope of Analysis
The study explores the US Customs and Border Protection’s annual funding and strategic objectives to:
Highlight and detail the agency’s budgetary trends between FY 2023 and FY 2025.
Identify the leading programs for FY 2025.
Explore general industry trends, technology advancements, and barriers and opportunities for industry growth.
It analyzes relevant spending activities of FY 2024 to:
Discuss the US Customs and Border Protection’s spending trends and highlight the leading contracting departments.
Explore the industry outlook for small businesses, as designated by the agency, and detail their contract share within contracting departments.
Examine the competitive landscape and discuss the contracting activities of top industry participants.

The Impact of the Top 3 Strategic Imperatives on the US Customs and Border Protection Industry
Geopolitical Chaos
Why
The United States receives a high volume of migrants annually, a trend expected to increase amidst escalating regional and global political and economic instabilities. The anticipated surge will place significant pressure on existing infrastructures and facilities, challenging operational efficiency.

Frost Perspective
Ongoing and planned investments in intelligence and surveillance technologies will focus on maximizing interoperability to streamline information sharing.

Procurement activities will encompass secure communication networks and biometric identification tools to enhance real-time situational awareness.

Disruptive Technologies
Why
The US Customs and Border Protection is investing in cutting-edge technologies, such as artificial intelligence (AI) and machine learning (ML), to improve data collection, processing and analysis, threat identification and reduction, and domain awareness.

Frost Perspective
The adoption of AI and ML-based tools will optimize resource allocation, enhance border security, and support faster, more secure processing of travelers and cargo.

Moving forward, data analytics and predictive risk assessment models will take center stage in the agency’s operations.

Industry Convergence
Why
To address the operational challenges created by the rising volume of passengers and cargo, the agency is prioritizing strategic public-private partnerships through the Reimbursable Services Program and the Donations Acceptance Program.

Frost Perspective
Collaborative public-private programs will focus on infrastructure improvements, developing and integrating non-intrusive inspection technologies, mobile biometric and inspection solutions, and adopting best practices in supply chain resilience and security.


Growth Drivers
The Customs and Border Protection agency oversees the screening of passengers and cargo at more than 300 ports of entry across the United States. With the rise of eCommerce, globalization, and digitalization, the volume of passengers and cargo is expected to grow substantially, making it imperative for the agency to improve data management and analytical tools to reduce passenger waiting time and cargo backlogs.

The rise of fentanyl and other synthetic drugs, such as methamphetamine and heroin, is exacerbating the drug epidemic across the United States. In response, the Customs and Border Protection Agency plans to increasingly automate intelligence collection and reporting, develop AI- and ML-based deep learning algorithms, and procure large-scale imaging systems and handheld/portable mass spectrometry.

Procurement activities to enhance border security and threat assessment will encompass deploying unmanned aerial vehicles (UAVs), incorporating multi-role aircraft featuring multi-sensor systems, and modernizing existing air and maritime fleets with advanced sensors, operating systems, and communication networks.


Growth Restraints
Strict regulatory standards, encompassing federal guidelines and rigorous cybersecurity requirements, impose significant barriers for new entrants in the industry. The demand for advanced technologies, such as AI, ML, facial and biometric identification, and non-intrusive inspection solutions, necessitates considerable investment in RDT&E. While high capital commitment is essential to remaining competitive, it also poses a deterrent for potential participants.

The planned integration of advanced technologies and frequent upgrades to new tools require specific technical expertise and regular and intensive workforce training to optimize system performance. These requirements can be cost-intensive and create potential skill gaps among agents, impacting operational efficiency.

Government leadership and administration changes could prompt policy shifts on immigration, border security, and trade, affecting the agency’s objectives and priorities. Furthermore, budgetary constraints could hinder technology integration and infrastructure maintenance, impacting operational efficiency and responsiveness.