Ways Improving Visibility of Imports Saves You Time, Money and Reduces Risk
Kevin Shoemaker
Integration Point Inc.

Supply chain risks, regulations and compliance requirements increase almost daily. Tracking a shipment across a global supply chain is already difficult to accomplish but even more complicated as trade regulations perpetually change in our post-9/11 world. For some, an international transaction could require the filing of as many as 35 documents across 25 parties to comply with more than 600 regulations and more than 500 free-trade agreements. What most organizations need is the ability to see every part of the transaction to ensure not only compliance with regulations but also that the goods are reaching their destinations.
Gaining insight into entries is one way to improve visibility. Entry visibility allows a company to manage trade compliance data of goods from the time they leave a foreign supplier until those goods reach their destination while automating pre-entry documentation and post-entry reconciliation processes. Entry visibility solutions provide the automation tools that allow companies to manage this process and correct errors in an efficient and cost-saving manner.
Why is entry visibility critical for all importers?
Following are 10 ways entry visibility helps companies to improve their global trade practices:.

1. Improved Compliance.
When importing, regardless of the country of import, organizations need more visibility into the entire transaction to avoid fines, penalties and to ensure compliance at every stage of the transaction. An automated entry visibility solution enables companies to automatically generate entry filings and forms required by any customs authority. This includes filing a complete entry that supports the declared value, quantity and classification for every product being imported — even if there are multiple items within one shipment. An automated entry visibility solution eliminates manual filing, manual errors and significantly reduces processing time.

2. Minimized Complexity.
A typical import transaction requires the synchronization of many moving parts — customers, suppliers, distributors, third-party logistics operators, forwarders and brokers. Everyone needs to use the same data so the right data gets included in the entries, but this can be close to impossible given the complexity and disparate data sources among the various parties involved. Using an entry visibility system that has a single database and common interface that allows all parties to access the data via the Web helps minimize the complexity of international transactions.

3. More Reliable Credentialing.
An effective post-entry audit solution must support the ability to compare value, quantities and classification information with what is declared in the entry filings (including the 7501 and the 10+2 submissions in the U.S.). When importing multiple items in a single shipment, this can translate into a significant amount of information that, if not included in the original entry documentation, must be available immediately upon request. A good entry visibility solution not only assists in the preparation and audit of entry documents, but also maintains all associated records in an electronic database for easy retrieval.

4. Ensured Confirmation.
Regardless of the regulations or authority in charge, practicing “reasonable care” is a must for all organizations. This means you, the importer, and your brokers need a comprehensive audit process to ensure everyone has adhered to all known compliance requirements and that the correct information has been provided on all entry filings, including those made by a broker on its clients’ behalf. With an automated entry visibility solution, every entry is audited, and discrepancies are displayed to the user in an easy-to-understand fashion, allowing for the necessary corrections to be made and submitted in a matter of minutes.

5. Savings on Duty Fees.
An average company that only audits 10 percent of its entries under a regular random audit is likely to lose millions of dollars a year because of misclassifications and missed opportunities under free-trade agreements (such as the North American Free Trade Agreement), free-trade zones and other special programs. In addition, within areas such as a U.S. foreign-trade zones, companies accumulate multiple shipments into a single entry that can save hundreds of thousands of dollars in broker and merchandise processing fees.

6. Optimized Import Processes.
The cost for each additional day that goods spend “in transit” has been estimated to be 0.5 percent of the total value of the goods. Therefore, even a few days shaved off the total cycle time can save hundreds of thousands of dollars on a large shipment. One way to improve the cycle time is to reduce or eliminate any potential delay at the border with Customs. Sending spreadsheets back and forth between company and broker, while unfortunately common, can be avoided by automating the process of sending product data to the customs broker as part of the pre-entry process. In sending product data to brokers in a daily feed, it becomes much easier and more cost effective to keep a company’s classification database in sync with the broker parts database.

7. Avoided Compliance Penalties.
Costs can be minimized by taking the necessary steps to avoid penalties that result when errors are made repeatedly before they are discovered by an outside party. Having visibility right after an entry is filed allows a company to determine the root cause of the error, take the steps internally and externally to correct the errors, and to report the errors soon after the entry is filed, instead of months afterwards — or never.

8. Optimized Free-Trade and Special Program Opportunities.
Free-trade programs such as NAFTA require timely and accurate records that prove the items qualify for the tariff reductions or waivers that importers claim. If you, as the importer, are unable to produce the records when asked, you lose the claim and could be subjected to a fine for the misfiling. Using an integrated entry visibility solution, you can avoid losing this savings opportunity and eliminate the possibility of fines by automatically qualifying entries against current free-trade agreements and flagging those entries with discrepancies for quick resolution.

9. Closed Import Loop.
A key to ensuring efficient trade is closing the loop that connects the shipper, the broker, the customer and the buyer. By closing the loop, you provide all parties in the transaction cycle with up-to-date information and develop processes to not only highlight errors but also provide a way to easily correct them. Without a closed-loop process, steps inevitably get missed and savings disappear because of incorrect classifications, shipment delays, in-transit inventory costs, penalties and fines, other claims and write-offs.
An entry visibility solution allows a buyer to send the necessary classification and filing information to the broker up front. This allows for the automatic retrieval and reconciliation of the entry filing on the back end and therefore closes the visibility loop.

10. Quicker Time to Market and Increased Profits.
Beyond cycle times and the implicit costs of importation, the faster goods can get to market, usually more can be sold and more profits reaped. Goods that linger at Customs risk spoilage (if perishable) or damage. No importer wants to be late to market and miss important windows of opportunity. Delayed imports cause delayed payments and subsequently reduced profits. Likened to an air traffic controller, entry visibility helps avoid potential problems by anticipating the quickest and safest route to ensure a timely and cost-effective arrival of goods.
As a result of changing international policies and security measures, global trade in the 21st century is fraught with challenges, including compliance, complexity, credentialing and confirmation. Companies need to address each challenge to achieve an efficient, cost-effective, global supply chain. Failing to address even a single challenge can result in unnecessarily high costs and other liabilities.
JoC TENs essayist Kevin Shoemaker is a director at Integration Point in Charlotte, N.C. He can be contacted at kshoemaker@integrationpoint.com.

With Jamaica's comparatively small ship registry, this adds to the registry's recognition and revenue earnings.

The M/V Panjang will soon be renamed the M/V CCL Moji and will operate in the Chinese coastal trade. Shipping from China to Jamaica is set to see an increase.

Maritime Authority of Jamaica (MAJ) is responsible under the Shipping Act to administer the registration of ships and to ensure that they comply with safety, security, and marine environmental protection treaties adopted by Jamaica. They oversee shipping to Jamaica.

In December 2000 the MAJ, transformed the Jamaica Ship Registry into an international registry where non-nationals could own and register Jamaican ships. The registry provides much needed foreign exchange and generates additional income from company incorporation and the employment of Jamaican seafarers.

On hand to witness the launch were the Jamaican ambassador to China, His excellency Wayne McCook, Mrs Claudia Grant, deputy director general of the MAJ, and Calvin Chen, deputy registrar for China.

With Jamaica's comparatively small ship registry, this adds to the registry's recognition and revenue earnings.

The M/V Panjang will soon be renamed the M/V CCL Moji and will operate in the Chinese coastal trade. Shipping from China to Jamaica is set to see an increase.

Maritime Authority of Jamaica (MAJ) is responsible under the Shipping Act to administer the registration of ships and to ensure that they comply with safety, security, and marine environmental protection treaties adopted by Jamaica. They oversee shipping to Jamaica.

In December 2000 the MAJ, transformed the Jamaica Ship Registry into an international registry where non-nationals could own and register Jamaican ships. The registry provides much needed foreign exchange and generates additional income from company incorporation and the employment of Jamaican seafarers.

On hand to witness the launch were the Jamaican ambassador to China, His excellency Wayne McCook, Mrs Claudia Grant, deputy director general of the MAJ, and Calvin Chen, deputy registrar for China.

China, with the only restriction being that the consignment is at least a container load (either 20-feet or 40-feet). However, Barrett stated that the company’s focus is currently on sourcing for the construction industry.

In response to the question of Jamaica being in need of additional warehouse facilities to meet increased demand for storage, Barrett said this was not an immediate issue, but could become so in the future. He said from his own knowledge, businesses were buying based on their current available warehousing space. He noted that Kingston Logistics Centre and ZIM Integrated Shipping Services were building warehouses on the Kingston wharf, to facilitate the need for container storage.

 Challenges
 Barrett said the main challenges he had seen in trading with China were:
  1)”Delivery, in that orders must be placed in advance of when needed. He explained that it normally takes a minimum of eight weeks between ordering and the shipment from China to reach Jamaica.

The lingering perception that goods manufactured in China were of poor quality. He empathetically stated that this was not true and we “need to get over it”. He said customers needed to appreciate the fact that a major portion of OEM (Original Equipment Manufacturer) products are created in China. That is, the products are made in China and the labels of the major companies are then affixed to the item.

He did note that countries such as Germany and the USA were still hard to beat in terms of quality, but said China was very much a force to be reckoned with. Barrett said Chinese-made goods represented value for money; if you pay for a $50 item, you will get $50 in value.

The businessman said persons should bear in mind that in Chinese business culture it was discourteous to refuse to do business with someone. Based on this, Chinese businesspersons will bargain and reduce their prices so as not to lose the customers’ business. However, one must be careful about how to bargain, because a reduced price could also mean a reduction in quality.

“Not every Chinese company is registered as an exporting company and, as such, cannot export to other countries. This he said was the only regulation that could prevent business between a Jamaican and a Chinese company.

Barrett said one word of advice for persons considering doing business in China was to ensure that invoices are stamped with the company’s seal (or chopped as it is referred to in China). Without this seal he noted that if there were any disagreements re shipment, the importer had no recourse in Chinese courts. He said a brokerage company such as China Resources International helps to mitigate against this, and ensured that only quality goods are received. To prove his point, Barrett shared an email he received from his Jamaican partner in China, Dr. Nicoleen Johnson, concerning a shipment of sofa chairs.

“Check completed. Good job overall; in today’s inspection I only discovered one other issue. Item hb102 in the catalogue all the cushion covers seem to be made from the same material as the base, however…the cushions are made with pu material, which has patterns on it and looks very plastic. …I have requested that they redo the cushion with the same material and they have agreed.”

This he said goes to show that each shipment is checked firsthand before they are loaded onto the container for shipping to Jamaica, and because of this the Chinese manufacturers are willing to satisfy their customers.  

In terms of intellectual property concerns that many countries have in relation to doing business with China, Barrett did not believe that was an issue. He said companies such as China Resources do due diligence to ensure that no internationally-branded products are purchased from companies that are not authorised to sell them.  He advised that if an importer was in doubt, they should ask to see documentation, and seek the assistance of China Sources International.

He said China-Jamaica (and Caribbean) trade offered great export opportunities, and Jamaica can become a distribution centre for Chinese goods. He said that new entrants especially, would be best served by going through a sourcing agency to avoid some of the pitfalls, especially if their risk aversion was low.