April 2013 | Sponsored | Thought Leaders

Managing Shipment Data to Meet Customs Requirements

Tags: Logistics I.T.

Tracey Leonard is Vice President, Global Trade Solutions, Choice Logistics, 917-344-4000

Q: How are Customs agencies changing their approach to reviewing transactional data, and how will this affect shipments and traders?

A: Collaborative Border Management (CBM) between Customs agencies will allow countries to exchange trader and shipment data in a live environment so non-compliance and perceived threats can be readily identified, measured, and monitored. Customs is also expanding its IT capabilities to harmonize data standards, which allow for the creation of real-time shipment visibility.

Companies will need to know more details about their products, suppliers, and customers, and to electronically communicate this information in advance of the actual shipment. A solid technology plan will be necessary to manage trade data that has historically been either processed manually or widely ignored.

Q: As companies continue to focus heavily on future growth opportunities in emerging markets, what type of trade requirements and/or Customs challenges should they plan to encounter?

A: It is imperative to first understand transaction transparency, along with taxation and regulatory requirements. Companies should account for a measure of uncertainty in the supply chain. Shipments may be subject to changing Customs regulations, lack of a unified approach, and political backlash manifested through inspections, fines, seizures, and corruption. Supporting service contracts may be challenging if used or refurbished goods are not domestically accepted.

Companies that want to bolster success will enlist quality business partners and develop relationships on local and national levels. Customs intermediaries and legal experts can help navigate complexities, introduce Customs to the company's business model, and act as a face to the government.

Finally, maintaining an open pipeline to ensure applicable regulatory news and changes are communicated promptly will minimize negative impact.

Q: How will increased focus on health, safety, and the environment affect the supply chain?

A: The Conflict Minerals Act, California Transparency in Supply Chain Act, Global Harmonization for Hazardous Goods, and other regulations are designed to increase transparency and visibility both upstream and downstream. To provide government and consumer assurances of product safety and social responsibility, these obligations of accountability and traceability permeate the supply chain from manufacturing and procurement through distribution and consumption.

Shippers must translate requirements into process execution to satisfy mandated verification, marking, testing, auditing, certification, and training without damaging the supply chain's integrity. Over the past 10 years, the regulatory realm has grown larger, more expensive, and disproportionate, leaving smaller companies to determine if verticals are still profitable, while larger companies coax their business partners to implement similar models of compliance. True costs and effects remain unknown.