SME%20Supply%20Chain%20Management

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SME Supply Chain Management
Whats important to being staying competitive?

• Robert Krieger
• President

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What is a Customs Broker?

• Licensed by CBP
• Part of the Dept. of Homeland Security
• Corporate License Permit
• Individual License Holders
• What is import when choosing one

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What is an International Freight Forwarder?

• Licensed by FMC
• NVOCC tariffs published
• Anti-rebate policy
• Confusing terminology

• Not licensed
• Most CNS (IATA) members
• TSA regulation

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US Focus on Security

• National Threat Center
• Increased examinations
• Voluntary C-TPAT program
• Stepped up TSA enforcement

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Krieger Worldwide

• Customs Brokerage Forwarding in USA, Mexico and
  Hong Kong
• Warehouse Distribution Services
• Domestic Transportation
• Logistics Consulting Services
• Insurance
• Duty Drawback programs
• Importer Security Filings

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What do you need to know?
Concerns
Opportunities
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Customs Regulations

• Regulated by 19CFR
• Informed Compliance Reasonable Care
• Importers required to submit Entry
• Most importers use brokers
• Entries filed electronically
• Includes data about manufacturer, importer,
  classification, conveyance, and valuation

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Importers Responsibility

• Verify accuracy of entry
• Prior to submission
• Marking of Goods
• Description
• Country of Origin
• Manufacturer
• Piece Count

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Entry Review

• Government retains right to review entry
• Review final upon liquidation
• Importer retains right to review entry
• Strict time limitations apply

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Examination

• Government retains right to inspect cargo
• Based on entry criteria
• Based on risk management
• Depending on product statutes up to 6 months
  after importation
• Failure to redeliver results in penalty
• Regardless of examination importer responsible to
  be comply

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Non-Compliance

• If CBP believes importer in violation
• Likely investigation
• Possible civil penalties
• Possible criminal penalties

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Related Party

• Most brokers dont ask
• Most importers answer incorrectly when asked
• Significance?

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Valuation

• Transaction value is implied (TV)
• TV of identical merchandise
• TV of similar merchandise
• Deductive value
• Computed value
• Sec 152.107 value if other values cannot be
  determined

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Transaction Value

• Additions to arrive at dutiable value
• Royalties
• Licensing fees
• Packing costs
• Selling commissions
• Apportioned value of any assists
• Penalties for omissions wrong valuation

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Classification

• How to determine correct rate of duty?
• Harmonized Tariff over 215,000 classifications
• Modified by chapter notes
• Modified by GRIs
• Effected by Binding Rulings
• Effected by court decisions

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Examples

• Wheel Chairs
• Customs view
• Importers view
• Our view
• Verdict

• Radio Watches
• Customs view
• Importers view
• Our view
• Verdict

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Freight Issues

• When can we get the freight?
• How much will it cost? What is the real cost?
• Individual shipment bidswasteful
• Tendency to focus on lowest bidder
• What is the real cost of cheap rates poor
  service to your business?

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Case Study in Freight

• Audited 36 random transactions
• Poor carrier selection
• Vessels too slow (China-DC 26-31 days)
• Unreliable service
• Over dependence on airfreight when speed needed
• Airfreight issues
• Dimension on AWB 12 above packing list
• Transit time, factory to door, 12 days!

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Findings in the Case Study

• Problems identified
• Customs broker different from Forwarder
• Did not coordinate well together
• Customs broker coordinated poorly with trucker
• Forwarder used cheapest airline, charged premium
  rates and overcharged on dimension

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Additional Findings

• Freight shipped to wrong port
• Paid freight on CFR shipments
• Paid insurance twice
• Did not consolidate freight
• Paid extremely high export freight rates

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Visit to Distribution Center

• Measured 40 different cartons
• Most had incorrect measurements printed on the
  cartons

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Case Study Conclusion

• 2,000,000.00 to 3,000,000.00
• Possible savings if international freight
  properly managed.

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Export Issues

• Duty Drawback
• Goods imported then re-exported
• Fungible items
• Complexmay not be worth the effort
• Export Controls
• Controversial
• Difficult to understand

Export Licenses
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Hot Topics

• Import Compliance
• Free-Trade Agreements
• Foreign Trade Zones (FTZ)
• Security

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Import Compliance

• Focused Assessments
• Increased Audits
• Smuggling Illegal Transshipments
• Importers must take steps to verify origin
• Detentions seizures have increased

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FTZ Free Trade Zone

• Goods outside Customs Territory of US
• Tariff shifts possible
• Delays duty payment
• Export without drawback headaches
• Fix problematic goods
• Reduce MPF

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Conclusion

• Importing is extremely complex
• Regulated by Customs other agencies
• Easy to make mistakes
• Importer needs to be compliant
• Importers best friend Broker/Forwarder

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Thank You