Brave Secure World

10+2 Reverberates through Global Supply Chains




  • Sellers.
Timing will be the biggest issue for sellers While 8 of the 10 importer-required data elements are already prepared by sellers in their commercial documents, they often do not have time to prepare the documents before the vessels are loaded and departed. Typically, sellers will get documents to customs brokers only days before arrival at the U.S. port. As a result, sellers are considered the "long pole in the tent," which will present the most significant Change Management challenge in converting to the newly dictated timeframe.

  • Carriers.
  • Because they must transmit two additional data types, there is a direct additional cost to carriers. CBP has estimated an incremental cost of up to nearly $100 per vessel trip for the Vessel Stow Plan, and a cost of up to $700,000 over a ten year period to put in place systems for Container Status Messages for those carriers initially lacking such systems.

  • Foreign-based Forwarders.
  • Foreign-based forwarders are well positioned geographically to work with sellers and manufacturers. However, these forwarders often lack the IT systems and personnel to manage the classification tasks required to produce HTS numbers at the line-item level. With investments, however, they may be poised to take on new services, thereby gaining new customers and new revenues.

  • U.S. Brokers.
  • Brokers have the expertise and systems to perform all of the tasks required by 10+2, including HTS classifications, but they often lack the overseas presence and relationship with suppliers. As a result, they may end up partnering with or acquiring overseas forwarding operations, or building up their own. Even without having ‘boots on the ground' in overseas locations, brokers will likely obtain additional service revenue for managing more information on behalf of importers.

    The bottom line is that in the new regulatory environment, companies will have to deal with IT systems, processes and personnel that were not set up to managing tasks at different times, in different sequences, and at a more granular level.

    Companies that do comply with the ruling, but with inadequate personnel, processes or technology will probably see not only increased costs, but a deterioration of their working capital position.

    What to do?

    Given all this, perhaps the biggest question on everyone's minds is what to do. It's clear that companies need to change business processes, systems, partners and personnel, yet there is no prescribed or standard solution that dictates how.

    There are four criteria are critical in considering a 10+2 solution:

    • Process re-engineering
    — Given 10+2's compressed timelines, companies must re-engineer processes that formerly occurred over 10 to 20 days.

  • Allocation of responsibility
  • — The relationships importers have with their trading partners and the capabilities of those partners will drive this decision.

  • ISF filing approach
  • — Importers will need to choose between third-party or self-filing options and whether to file the ISF and Customs Entry at the same time.

  • How — and how much — to automate
  • — Web-based Global Trade Management solutions can streamline and accelerate trade processes, but will require investment of time, effort and upfront resources.

    10 + 2 As An Opportunity to Improve Your Global Supply Chain

    This directive, rather than simply causing more work and short term cost, can be used by importers and other trading partners to drive a greater degree of automation, upstream quality control, visibility, and collaboration that will lead to more efficient business processes.

    Below are examples of how process re-engineering accompanied by automation may help companies turn the 10+2 initiative into an advantage:

    • Enhance Your Experience.

      When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

    Already have an account? Click here to Log in.

    Enhance Your Experience.

    When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

    OR

    Complete the registration form.

    Required
    Required
    Required
    Required
    Required
    Required
    Required
    Required
    Required
    Required
    Required