Some tactics companies might consider to remain under the $800 limit—like breaking apart heavyweight air shipments into international parcel shipments—could back re. They can increase handling costs and the risk of damages, and cut delivery predictability, says Glenn Koepke, general manager of network collaboration with FourKites. When customs clearance goes wrong, it’s often due to incorrect data, missing paperwork, and/or poor timing on entry lings. Technology can provide an easy x for these scenarios. “In our digital world, robust solutions are available to generate accurate documentation, monitor ling, and determine status in real time,” Koepke says. SMART PARTNERSHIPS PAY OFF Working with freight forwarders and customs brokers can also help streamline customs processes and reduce costs. The right freight forwarder will help shippers
It might seem that few vendors would agree to a DDP. However, vendors can bene t from these agreements. A DDP program could enable a vendor to work with a company that otherwise might not purchase internationally. DDP agreements also tend to promote a “customer stickiness” that can make it more dif cult for customers to leave the vendor, Cochran adds. In the United States, de minimis admission can also cut import costs. When the value of the merchandise one person imports on one day falls at or below $800, it generally may be imported free of duties and taxes, in what’s sometimes referred to as “de minimis.” De minimis tends to be most helpful for small shipments and shippers. (For larger shippers, it often makes more sense to import goods into the United States via consolidated freight instead.) As sales grow, companies need to weigh whether they bene t more from transportation savings or tariff savings.
the importer remains responsible for classi cation decisions. One way to ensure an accurate classi cation is to ask the government for a ruling. “The U.S. Customs Binding Ruling program is one of the most underutilized means of shipping ef ciency,” says Jeffrey D. Plumley, chief commercial of cer and licensed customs house broker with ASF. A ruling stipulates the correct classi cation for imported goods, enabling the importer to correctly plan for the duties that will be applied to their items. Shippers also should consider becoming a participant in the Customs- Trade Partnership Against Terrorism (C-TPAT) program, suggests Matthew Fotouhi, chief technology of cer with Magaya Corporation. Shippers that join C-TPAT agree to work with CBP to protect their supply chains, identify security gaps, and implement security measures and best practices, among other steps. In exchange, C-TPAT members are considered to be low risk, and are less likely to be examined at a U.S. port of entry—which means they typically reap bene ts like fewer CBP examinations and shorter wait times at the border. COSTCUTTING TIPS A simple rule governs import duties: “You have to pay what you owe,” says Pittelli. But, it’s possible to nd cost savings elsewhere. One area is the duty drawback program. Drawback refers to the refund of certain duties, taxes, and fees collected when goods are imported and are then refunded when the goods are exported or destroyed. Another way to cut costs is by establishing delivered duty paid (DDP) vendor relationships, says Kenneth Cochran, managing director in Alvarez & Marsal’s consumer and retail group. Under a DDP agreement, the seller assumes the responsibility, risk, and costs associated with transporting goods until the buyer receives or transfers them at a destination port.
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July 2023 • Inbound Logistics 151
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