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The Changing Landscape of Importing and Exporting

By: Felix Pekar, QuestaWeb
Posted: February 11, 2008, from the February 2008 issue of GCI Magazine.
Back to the February issue.

Manufacturers face a shifting landscape in the post–9/11 world. Like the changing images of a kaleidoscope, there are no steadfast givens or immutable rules. U.S. customs tariffs and regulations are amended daily, and responsibility for keeping abreast rests squarely with importers and exporters. And bigger change looms on the horizon. Importers may soon face a whole new set of requirements if a proposed security filing for ocean cargo, known as “10+2,” is approved. It will require importers, or their overseas agents, to report 10 additional data elements to U.S. Customs and Border Protection 24 hours prior to foreign lading, and ocean carriers will be required to report two new data sets as well. Most predict 10+2 is just the first in a long line of government demands for supply chain security information to come.

What Are the Challenges?
For companies that are sourcing and importing many products or SKUs, one of the biggest challenges is the need to classify all those products, determine the documentation requirements associated with the assigned classification numbers, and attach all the required forms to the purchase order and commercial invoice. Depending on the product, several different harmonized tariff schedule (HTS) codes may be involved. Multiple government agencies may exercise jurisdiction over a single commodity, and each involved agency can generate a whole new set of documentation requirements. Then, of course, landed costs must be calculated,
as well as a multitude of other tasks.

Knowing what regulations and advisories apply and what documentation is required is the single most demanding task manufacturers face. And, because most companies today are manufacturing or sourcing the same product in several different countries simultaneously, the complexity factor rises. There are highly variable compliance requirements for identical products manufactured in different countries.

Then, too, there is the issue of foreign vendors preparing the required documents themselves and the opportunities for error this presents. If there is even a minor problem, an entire shipment can end up in demurrage. Delays cost money, and goods not getting to the manufacturing line or retailers on time compounds expenses and creates cascading supply chain headaches.