Yes, we live in a unique time in the history of international trade. With today's environment of heightened security, things seem to change dramatically on a daily basis. For instance, the importance of accurate paperwork filed in a timely manner will continue to increase. The enactment and enforcement of the U.S. Customs' Advance Manifest Regulation for ocean, air, rail and road shipments, is just one example of change-in-action.
Beyond the tools for small package shipments, companies can also seek out third-party logistics firms and others offering expertise in customs brokerage, import/export services and multimodal shipping for freight. Knowledgeable consultants can help with compliance issues and other international trade issues, including helping customers comply with C-TPAT requirements, establish effective distribution networks overseas and leverage Free Trade Zones.
For those who arm themselves with the right combination of know-how and tools, the opportunities that come with global trade are great and growing.
Below are some tips on how you can keep on top of rapidly changing Customs regulations, improve regulatory compliance, reduce operating expenses and streamline global supply chains.
- As noted, companies can take advantage of Web-enabled services that are currently available to quickly and accurately generate an all-inclusive estimate of international shipping costs, identify harmonized tariff codes, quickly search for restricted trading parties, or identify specific import or export license needs. While these tools can provide a competitive advantage for almost any company engaged in cross-border shipping, they are particularly useful for manufacturers and retailers in the Primary Focus Industries, which include apparel, automotive, electronics, footwear, high tech, medical equipment, pharmaceutical and textiles.
- Maintaining a detailed transaction history is critical to provide an audit trail for compliance checks and guard against potential penalties and fines. Newly available services allow businesses to electronically store and archive detailed shipping records online replacing file cabinets full of physical documents, and making it easier to generate a report for a Customs audit.
- Getting an all-inclusive cost estimate of international shipping including applicable duties, fees, taxes and transportation costs based on the origin, destination and products in a shipment is pivotal to success. This is now possible, quickly and accurately, with newly available landed cost engines. That allows importers to identify the lowest cost international suppliers. And it helps exporters improve customer service by providing shipping rates with all duties and taxes included at the time of order, speeding cash flow and reducing the number of refused shipments and returned products. The refusal rate for international orders tends to be much higher than for domestic shipments and the cost of one refused shipment can exceed the profit on multiple successful orders.
- Consider joining the Customs-Trade Partnership Against Terrorism (C-TPAT), which gives you optional entrance into CBP's Importer Self-Assessment program. Both programs will identify you as a low-risk importer, and that will reduce customs exams and increase paperless entry response from CBP. Participation in the Importer Self Assessment program allows you to identify and correct errors instead of being subjected to the scrutiny of CBP audits. And that reduces the possibility of penalties if they discover errors or misdeclarations in your entries.
- Conduct a compliance assessment with a customs expert to identify areas of possible compliance risk. The assessment should cover the same areas CBP would examine in a Focused Assessment. By ensuring compliance, you can save your company fines, and avoid the likelihood of future regular CBP inspections of your shipments.
- Consider contracting third-party consultants who can help with international trade issues, like complying with C-TPAT requirements, establishing effective distribution networks overseas and leveraging Free Trade Zones.
About the Author: Jerry DelGaudio, UPS vice president, International Trade Services, is responsible for UPS customs brokerage and trade management services, including more than 7,500 employees in more than 400 locations around the globe.