QuestaWeb

Multi-National Trade Solutions

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Meet Our Supply Chain Pro to Know: Chris Springer

We’re extremely proud to celebrate Chris Springer’s recent recognition as a 2018 Pro to Know by Supply & Demand Chain Executive magazine. We thought it was only fitting to put Chris in the spotlight and let our customers truly get to know him.

With over 20 years of supply chain experience, primarily focusing on global trade compliance, it is safe to say Chris understands how to address complex issues such as how best to automate business processes and how to make existing supply chain processes more efficient. Chris daily applies his triad of experience – regulatory knowledge, programming ability and integration expertise – to elevate the advice he gives to QuestaWeb customers. He takes pride in not only delivering the best solutions possible but also in assuring that the ultimate users can extract maximum value from them.

Chris also is very involved in the compliance community, offering his insights, most recently on the ACE implementation effort. He works with ABI reps, U.S. Customs and Border Protection (CBP) officials, attorneys and individuals at the various ports, as well as clients, to assure that QuestaWeb software is as efficient and as transparent as possible.

So, Chris, what is the best part about working for QuestaWeb?

The best part about working for QuestaWeb is the flexibility that it offers in allowing me to try different things. I’ve done a lot of traveling and talked to people in all different walks of life. I have the unique ability to work with and understand challenges of Fortune 500 companies all the way to individuals who are starting a customs brokerage.

If there is one thing I have learned, it is that at the end of the day, all of these companies are a culmination of people and ideas. I am inspired by the different approaches each company takes to overcome challenges with technology and am truly humbled to help support their initiatives.

In late 2017/early 2018, some of the final transactions transitioned to ACE (those related to foreign trade zones and revenue collection), leaving just revenue collection and a few others to complete the implementation effort. How do you see this affecting the trade community and their supply chains?

In 2018, the trade community will have to accept the normalization of the new electronic environment. In addition, there will be related programmatic and operational changes affecting both the import and export worlds. There will be a period of tweaking the system to extract even more capabilities out of the ACE system.

In particular, one focus will be identifying ways to share data, especially among the numerous federal agencies involved. Another will be the issue of being more transparent across the supply chain as a whole, offering as much information in as simple a package as possible. Then, of course, there will be the task of overhauling the regulatory environment.

A likely outcome may well involve the development of key regulatory changes responsive to the needs of larger companies. Relative to revenue collection, for example, larger importers that are already concerned about their cash flow may well look for ways to hold onto their money longer through regulatory relief. There may be a move to more simplified reporting and filing summaries on a monthly basis, rather than a weekly one, which could have a ripple effect across the supply chain.

Effective March 23, 2018, President Trump issued Proclamations 9704 and 9705 on Adjusting Imports of Steel and Aluminum into the United States, providing for additional import duties for steel mill and aluminum articles. What does this mean and how do you see this affecting U.S. consumers?

Steel made in another country and shipped to the United States will be subject to a 25 percent tax. And imported aluminum will be hit with a 10 percent tax at the U.S. border. This decision has been made to incentivize U.S. companies to buy steel and aluminum from U.S. producers so the domestic metal industry gets stronger. However, many U.S. industry leaders agree that consumers will most likely face higher costs for cars and trucks, beer and soft drinks, canned goods and more steel/aluminum products because of these tariffs.

On top that, the United States Trade Representative (USTR) published a proposed list of Chinese goods targeted for assessment of an additional 25 percent duty upon importation into the United States. The USTR Notice explains that the proposed list was designed to minimize impact on U.S. consumers and largely excludes several types of consumer goods such as apparel, footwear and cell phones. Further, many of the items identified for the tariff are also exported to the U.S. from other countries, providing alternative sourcing options to importers.

How can a supply chain better align with a company’s broader strategy?

Being able to communicate accurate data across the supply chain is uppermost. From an importer’s perspective, it’s about assuring brokers and freight forwarders have correct information about their commodities so they can provide optimal information to governments, whether the United States or foreign governments. For exporters, it’s about getting denied party screening, licensing and other matters right the first time. Finally, it is about limiting overhead expenses as much as possible.

Automation, especially for QuestaWeb customers, gives companies the ability to manage their global trade with minimal resources. Our solutions make it possible to intervene only when exceptions arise, allowing staff to focus on those broader corporate strategies.

Let’s get to know you a little bit more. What do you like to do outside of work?

I have recently gotten myself involved in the sport of Curling. Participating in team and individual sports has taught me so much about working with others to accomplish goals. How to win or lose gracefully, build up my teammates and how to work others.

It may look like four adults yelling at each other but in reality we are communicating information about the stone or instructing what to do. From when the stone begins moving to when it comes to a rest, the movement and communication of a good team is constant.

It is like international trade in a way, though the point of moving goods is not to run into other goods and knock them out, getting to the destination as planned is a job well done. Every day that passes, technology we create brings us closer to the day that information about the current status of all goods are conveyed just as quickly as it is on the ice.

 

We hope you enjoyed getting to know our Pro to Know. If you would like to request more information, you may do so here: http://questaweb.com/contact-us/

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Web-Native Systems: The Hidden Cost Savings For Brokers and Forwarders

by Dean Gionis

Web-native platforms designed for brokers and forwarders are a great tool as they facilitate the timely and compliant movement of goods from point of origination to point of destination, across borders, anywhere in the world. Furthermore, these solutions provide even deeper benefits by helping brokers and forwarders increase financial and supply chain efficiencies, improve customer satisfaction, reduce risk of noncompliance and better control costs. In this blog post, we are going to dive into the financial benefits of web-native platforms, specifically, and how they can put more money into your company’s pocket.

Reduced Costs

Web-native platforms enable all employees to access their main system via the cloud. Having this option means that employees are able to work remotely from home whenever it is necessary. When it comes to minimizing expenses, operating in the cloud is a key factor because the less physical office space needed, the lower monthly rent will be. In fact, studies show that if a typical business allowed employees to work from home just half the time, they would save, on average, $11,000 per year. In terms of cash savings for employees, telecommunication has proven to save workers between $2,000 and $7,000 a year.

It is also very common for brokers and freight forwarders to expand into different cities as a way to increase revenue streams. While oftentimes necessary, it is an expensive task to undertake due to the added mortgage or lease, utilities, janitorial services, and office supplies and equipment. However, web-native platforms eliminate the need for that physical space in pricey cities since employees can work remotely instead of out of an office.

Increased Productivity

The phenomenon of working from home is rapidly increasing as technology has evolved. According to Global Workplace Analytics, 3.7 million employees (2.8 percent of the workforce) now work from home at least half the time. And, according to those remote workers, about 91 percent feel that they’re more productive than when they are in an office. This is because there are fewer distractions while working in a home office, employees are perceived as more valued and trusted, and thus feel obligated to exceed expectations as a way to prove themselves.

In addition, having remote employees tends to result in less missed days of work. So, in the instance that there is a terrible snow storm, hurricane or other natural disaster, productivity will not be lost that day. For example, Federal employees in Washington who worked from home during four official snow days saved the government an estimated $32 million, according to Global Workplace Analytics and its research arm Telework Research Network.

The same principle applies to executives who routinely travel for business and trade shows. Even though they are out of the office, they can get a live update on what is going on via the cloud. By no longer having to continuously call the office for updates, they can spend their valued time on other important tasks at hand.

Better Recruitment

When companies have the freedom to hire from anywhere in the world, the talent pool grows. Being able to pick from the most qualified in the industry, regardless of where they are located, is a huge competitive advantage when trying to grow a business. On top of that, when employees are spread out all over the country or even the globe, brokers and freight forwarders are able to operate in more time zones, meaning that there are more hours in the day.

Moreover, 56 percent of hiring managers have reported that Gen Y’ers are more difficult to recruit, with 64 percent stating that they are even harder to retain. This is because the younger generation is particularly attracted to flexible work arrangements. By offering remote capabilities, organizations are more likely to entice the younger, technological-advanced generation, which helps build a competitive edge.

*   *   *

QuestaWeb has been serving mid to large sized brokers and forwarders for over 30 years. In fact, the company was the first to offer a web-native solution in its industry. If you require cost savings, higher productivity and a better talent pool, talk to QuestaWeb today.

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News Flash: Your ERP System and Excel Spreadsheets Are NOT Global Trade Management Solutions

by Dean Gionis

With so many moving parts, global trade management (GTM) is a daunting task for compliance professionals in companies large and small. GTM software offers significant benefits. It can

  • Increase profits.
  • Reduce risk and the potential for fines.
  • Expedite product delivery.
  • Reduce costs.
  • Improve visibility.
  • Reduce delays.
  • Free up company resources.
  • Automatically alert users in different departments (sales, warehouse, purchasing, compliance, legal) of problems.
  • Assist in making strategic supply chain decisions.

Despite its tremendous value, GTM software is still overlooked by many companies. Why?

  • A false sense of security or being forced to do things manually – It is a misnomer to believe that an ERP system plus multiple spreadsheets is adequate for GTM. While some companies operate this way, they are missing out on tremendous value. Under their spreadsheet scenario, they are merely collecting data manually. With a single integrated GTM platform, companies can not only store data in a centralized database but also benefit from the automated reporting of serious exceptions and/or potential opportunities such as sourcing changes, free trade agreements, bill of material changes, special duty programs, denied party hits or discrepancies of reported values via comparisons of the purchase order, commercial invoice, 7501, vendor check and more.
  • Fear and/or cost – The fear that the GTM software implementation will fail or the budget will be grossly exceeded.
  • Lack of resources – The belief that the firm lacks the staff resources to devote to overseeing a GTM implementation or developing a justification that the C-suite will approve to designate the required funds.

So what is the secret to getting GTM in a cost-effective manner while ensuring a successful implementation? Here’s a low-risk/high-reward option to move to GTM software.

  • Select a software provider whose core competency is GTM. Some corporate leaders aspire to the corporate ideal of “one-stop shopping” and either look to their existing vendors or (make sure you are sitting down for this one) try to develop a homegrown GTM solution. However, providers of general business software – or internal IT professionals – are not specialists in GTM. As a result, such pseudo-solutions do not work “out of the box.” They will need infinite customizations since there are no defined instructions to follow for development and implementation. The effort is essentially a science project.

Either approach commonly leads to millions of dollars wasted on efforts that are completed late – or not at all – and never truly perform all the required functions.

In contrast, true GTM vendors, like QuestaWeb, have one core competency 24 x 7 x 365: GTM software solutions. They can supply complete GTM software solutions with all the functionality and compliance content needed to quickly reap the benefits of automation. Choosing an established specialist will deliver a cost-effective solution, backed by a proven implementation process, and it will perform all the required functions out of the box.

  • Identify the greatest area of need and phase in the needed functionality without a full-scale GTM implementation. Some providers offer GTM solutions in modules, which can be very advantageous. As an example, consider the importer that sources in several countries and uses several HTS chapters. That importer would need to quickly compare free trade agreements (FTAs) to determine the most cost-effective source of components or raw materials. Implementing a modular FTA solution is neither complex nor time consuming. And, the importer could implement the FTA solution now and add a full import compliance solution later.

Modular solutions provide the framework whereby it is possible to simply plug in an additional module that shares the same single database. Thus, the subsequent implementation – and associated learning curve – would be minimal. Other modular add-ons could easily address export compliance, denied party screening, global visibility, license determinations, self-filing and more.

Compliance professionals, for some reason, always face a hurdle that other departments don’t: Convincing C-level decision-makers that they need software just as much as finance, purchasing, manufacturing, sales, distribution and human resources. Our earlier blog “Getting the Green Light for a GTM System Acquisition” provides some strategies to use to garner executive approval. Once you get the green light, avoid the science project, go with a GTM specialist and employ the low-risk/high-reward option, especially if your company is not ready to embrace a full GTM solution today.

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Brokers and Forwarders: Here’s a Trend Worth Noting

by Wayne Slossberg

 

Currently, there are over 270 foreign trade zones (FTZs) in operation across the United States and its territories. And, the numbers are steadily climbing. Why? There are two primary answers. First, FTZs offer advantages when it comes to importing and exporting, especially

  • Deferred payment of duty and federal excise tax, with monies due only when goods leave the FTZ for consumption.
  • Exemption from state and local ad valorem taxes while products are within the FTZ.
  • Elimination of duty and excise tax on merchandise exported from the FTZ.
  • Ability to maintain goods within an FTZ indefinitely.
  • Freedom to select the most advantageous duty rate, that is, either the rate applicable when the goods entered the zone or the rate applicable on the finished goods leaving the FTZ.
  • Ability to place merchandise imported under bond within an FTZ to satisfy a legal requirement to export it.

Second, U.S. manufacturing is on an upswing thanks to the “Made in America” movement and the priorities of the Trump Administration. Companies want to take advantage of this new business environment, and FTZs present a viable means to decrease costs and be more competitive in both domestic and foreign markets.

The prospect of establishing an FTZ can be daunting for many importers. Often, they don’t have the bandwidth or an understanding of how to approach the process – or how to complete and submit an application to the Foreign Trade Zones Board. Clearly, the dynamics of the approval process aren’t necessarily difficult but can be somewhat challenging. And, of course, affordability is a concern for smaller importers that don’t want to take on the costs of acquiring a facility, staffing it and operating it.

This “dilemma” has created a business opening – and new revenue streams – for medium to large brokers and forwarders and even 3PLs. Many are looking for additional services to offer clients, and FTZ management and operation fit the bill. In many instances, offering these services and transitioning to a 3PL model solidifies brokers’ and forwarders’ overall business relationship with importers and adds an element of business security to their customer base. If a company is using their FTZ services, then they are less likely to lose that firm to a competitor.

Familiarity with the nature of the business – and the availability of technology developed specifically for FTZs – allows brokers and forwarders to enter the 3PL space and manage or run FTZ operations for one or more importers. And, the transition is a relatively straightforward leap regardless of whether the FTZ is created for manufacturing or distribution purposes. The key requirement is being compliant with the strict rules CBP has instituted to govern FTZ operations, especially the tracking of inventory movement and the filing of scheduled reports on time. That’s where FTZ technology integrated with brokerage and forwarding solutions comes into play.

For QuestaWeb customers, addition of the FTZ solution to their broker and freight forwarder solutions is easy. For brokers and forwarders with other solutions, QuestaWeb’s FTZ solution can be integrated with virtually any other technology. Notably, QuestaWeb approaches the licensing of its FTZ technology in two different ways. Knowing that some firms will want to handle FTZ operations for multiple clients, we offer a system with a block of transactions that the 3PL can divide in any manner desired. 3PLs also can acquire standalone FTZ technology, especially for those customers that want the 3PL to manage its FTZ for them and integrate the FTZ solution with their ERP system. QuestaWeb can handle that integration or the 3PL can, as desired. Whatever business model brokers and forwarders select, QuestaWeb can accommodate.

Adopting the role of a 3PL enables brokers and forwarders to play a more strategic role in the supply chain. No longer are they merely handling individual shipments. They become supply chain managers able to offer recommendations to optimize processes, save money and address issues before they become challenges.

In an industry where the numbers of brokers, forwarders and even 3PLs are shrinking due to a marketplace highlighted by closures, sales and consolidations, it’s important to be aware of emerging trends and add versatility to your service offerings and revenue stream. Operating, managing and even offering consultation services regarding FTZs is a noteworthy movement for brokers and forwarders.

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It All Starts With Your FTZ

 

by Wayne Slossberg 

We’ve all done it. You start a small home project like hanging a new picture in your living room. Once it’s up on the wall, the piece looks beautiful but it makes the painted wall look dirty and faded. You paint the wall, but it emphasizes the carpet wear. You replace the carpet but now the sofa looks dingy in comparison. By the time you’ve finished, the simple act of hanging a picture has resulted in a completely redecorated living room. It wasn’t something you anticipated, but the end result is a more beautiful interior space that you can enjoy with friends and family.

So it is with many companies that opt to create a foreign trade zone (FTZ) to help lower tariffs, duties and taxes. They obtain approval, select an FTZ technology vendor and set up an FTZ. After a while, the savings start to mount and everyone is more than pleased. However, this realization makes company officials aware that the importing/exporting operations conducted via the FTZ are just one small part of the overall trade it conducts. How about the distribution centers located on the West Coast? Or what about the importing/exporting another corporate division conducts globally on a daily basis? Are we leaving savings on the table? Are there opportunities to strengthen trade compliance elsewhere? Are there ways to improve other business processes, just like the FTZ technology helped the company do?

The original FTZ footprint is about to yield a larger footprint, trade management compliance on a more expansive scale. Think about all the opportunities for greater efficiency and economy that automating importing/exporting processes and managing by exception can hold. Think, too, about what global visibility will mean to your supply chain.

This “snowball effect” is most definitely a positive thing unless, of course, you did not contemplate expanding compliance beyond a single FTZ when you obtained your technology. It could resemble the home decorating scenario described earlier if your company selected a vendor that only offers an FTZ solution. You’ll need to acquire the technology in a piecemeal fashion, likely through a variety of vendors and potentially facing costly integration issues. Worse, the final result might not be the beautiful new living room. It could be a variety of systems that never really “talk to one another” in the proper way. Interoperability can be a huge challenge.

In our experience, many companies do just that. They start with an FTZ and the benefits experienced cause them to expand their vision and contemplate the possibilities across all their importing and exporting activities. Or, taking a severe hit for noncompliance from U.S. Customs and Border Protection (CBP) elsewhere in the organization might be the catalyst to expand compliance concerns beyond the FTZ and move from spreadsheets to global trade management technology.

That is why at the beginning of the FTZ technology sales cycle, we counsel prospects to be mindful of trade compliance beyond the FTZ, even though the focus today is establishing a CBP-compliant FTZ. We recommend that they select a vendor that offers a suite of global trade compliance solutions that can build on the initial FTZ solution. We know it is entirely possible – and very likely – they will want to introduce automated trade compliance to all their importing/exporting activities eventually.

In the QuestaWeb world, if you have the compliance database that lies at the heart of our FTZ solution, then this “next world of compliance” is open to you. You posses the database with all your products, vendors and more that lays the groundwork for global trade compliance activity elsewhere in your firm.

The number one thing: No matter where you start – FTZ, import/export or self-filing – always look for a provider that can satisfy that next step in your global trade management vision. If you do, it will be easier and less expensive and the final result will be even better than you imagined.

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Telltale Signs It’s Time to Say Goodbye to Your Software Provider

by Dean Gionis

It happens to many companies. They start small but, before they know it, they have grown into a business or department of significant size. The question then becomes: Is their software provider and technology scaling with them or are they now inhibiting further growth? Part of the answer can be found by looking at four key areas:

  • Support
  • Technology
  • Impact on Your Profit and Loss (P&L) Statement
  • Agreement/Contract Terms

Remember: For a vendor relationship to work, there must be a good fit between both partners, and both parties must benefit.

As you review your vendor relationship in light of the areas below, consider the level of fit and the benefiting party.

Support

The logistics arena is a 24×7, dynamic environment where information must be available at all times. When you need support from your vendor, how is it acquired? Must you phone, search help files or fill out a web ticket? If you speak with a live person, does that individual possess industry knowledge or is he/she just following a canned script to answer your question? Is support handled by your vendor or is it outsourced to a third party? Have you essentially become self-supporting through your vendor’s use of web tickets or user manuals? If that is the case, think about how many hours a day/week/month you are focusing on technology rather than closing new clients and/or delivering services to existing ones.

Anything short of in-person communications with a skilled staff professional capable of diagnosing and correcting your issue means you are not exacting value from this vendor relationship.

Technology

The technology issue is more complex, and many factors must be considered. Is your vendor providing the integration resources you need to maximize efficiency or are you just living with what you have and adding more bodies? Is your vendor capable and experienced in interfacing with major ERP/WMS systems so that you can win new business or have new projects approved? How scalable is your vendor’s technology? What does it take – and how long – for you to expand your existing platform to accommodate additional users, clients, offices and so forth?

Let’s now consider technology in light of broker/forwarder operations and actual application software.

  • How quickly can you file a PGA entry?
  • How about a 200-line entry?
  • How long does it take to import hundreds or thousands of parts into your database?
  • What about shipment tracking? Can you automatically notify your clients of shipment status or must they speak with your staff to obtain this simple information?
  • How many different software systems do you use to run your business? Are they interoperable or must you reenter data multiple times in various systems?

These examples are but a few potential cash-burning inefficiencies that can erode revenue quickly.

Impact on Your P&L Statement

Your technology evaluation might reveal a lot of “busy work” being done relative to data entry. Inefficiency can translate into hundreds of thousands of dollars in lost revenue and severely impact your P&L as well as your business’ ongoing viability.

Consider the time and money you could save if your technology wasn’t letting you down. With maximum automation – and the right technology partner – your business could go up against the “big guys” and win. What would that do for the P&L?

Agreement Terms

There are many important components to your technology provider agreement including deliverables, responsibilities, confidentiality of data, term, costs, termination, etc. With a hosted or cloud-based software agreement, it is wise to negotiate a provision for early termination. If your provider is unable to keep up with compliance or can no longer support a critical capability, then you have the flexibility to make a change, if necessary.

• • •

After your evaluation is complete, communicate with your software provider and explain the issues as you see them. Give the provider a chance to fully understand your concerns and suggest a solution. If your provider doesn’t offer a remedy or seems indifferent, then it is definitely time to say goodbye.

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ASSISTING THE ACE TRANSITION FOR FOREIGN TRADE ZONE OWNERS/OPERATORS

by Christopher Springer

The mission of the National Association of Foreign-Trade Zones (NAFTZ) is to help FTZ professionals stay connected, engaged and informed. So, it is not surprising that FTZ professionals are reaching out to NAFTZ regarding concerns over the scheduled migration of e214 core from ACS into ACE on September 16. In fact, they’ve asked NAFTZ to contact U.S. Customs and Border Protection (CBP) expressing concern about their ability to address and resolve these problems with no backup system available after September 16.

NAFTZ, motivated by a desire to frame a collective message from all of its software-provider members and broader membership, requested input regarding experiences with e214 testing.

Here is the essence of the response QuestaWeb sent:

QuestaWeb is a full suite ACE/ABI provider. For us, ACE Deployment G2 represents a turn into the home stretch of an endurance race that has lasted for more than a decade.

We have been testing the 214 and associated transactions in certification since CBP released the CBP and Trade Automated Interface Requirements (CATAIR) drafts. AMS, in-bonds and customs entries all directly associate with the 214 transaction, and all have been fully transitioned to ACE. We are fully committed – and prepared – to transition to ACE for e214 and ISF transactions on September 16, 2017. CBP also is fully committed to this transition and has established this date to assure that as many resources as possible are available to support the transition.

We have experienced an issue with filers who received CSMS #17-000536 on Tuesday, September 5, advising that testing is open to all trade participants. This announcement posed somewhat of a challenge, but the issue had more to do with the CBP certification setup than the transaction itself. Unlike entry filing, which requires a certification test, there is no requirement to test FTZ electronic transactions prior to going live. Consequently, most FTZ filers do not have a profile in the certification system, and the absence of a profile is resulting in a fatal error notice. On the CBP side, it is no small task getting a certification profile established. So, ABI reps have deferred to us, the software providers, to send their test transactions to certification.

Another challenge concerns the data in the certification database. Filers cannot send what they normally send to CBP’s production system to the certification system because the required information may not be reflected in the certification database. Bills of lading, zones and customs bonds may be missing from the certification system. CBP provides these particular data elements to mirror a production-like scenario. The same exact thing happened with customs entries, PGAs and all of the other transactions that have moved to ACE. Perhaps, only 5 percent of our filers sent test data for entries before transitioning to ACE.

Other than the FT (foreign trade zone) application ID and lack of record count in the Y record, the differences in the 214 transaction are negligible. Our approach to the transition allows the filer to choose whether the transaction will be sent in ACS or ACE format with a background configuration setting to default the transaction. Our code is 100 percent distributed to assure compliance for all of our filers as of this moment.

This challenge is just another issue in the move to ACE, and we must remember that the finish line is sight. We need to keep moving forward and maintain the momentum we’ve achieved to date.

 

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ACE IS THE ONLY PLACE FOR DUTY DEFERRAL AND ENTRY SUMMARY FILINGS COME SEPTEMBER 16

It’s official: U.S Customs and Border Protection (CBP) announced on Wednesday, August 16, 2017 that effective September 16, the Automated Commercial Environment – better known as ACE – will become the sole CBP-authorized electronic data interchange (EDI) system for duty deferral entry and entry summary filings. On that date, the Automated Commercial System (ACS) will no longer be authorized by CBP for these types of electronic filings.

According to the CBP website, ACE Deployment G (Statements) will take effect December 16, 2017, while ACE Deployment G (Reconciliation, ACE Core Drawback and Trade Facilitation and Trade Enforcement Act Drawback, Liquidation and Automated Surety Interface) will go into effect February 24, 2018. However, the referenced Federal Register notice indicates that “The transition for processing electronic drawback filings will be announced in the Federal Register at a later date.”

The route to what appears to now be the final date has been full of stops and starts. Here’s the chronology as captured in the Federal Register notice:

  • August 30, 2016: CBP establishes that ACE will be the sole EDI system for drawback and duty deferral entry and entry summary filings effective October 1, 2016.
  • October 3, 2016: CBP cancels the effective date until further notice.
  • December 12, 2016: CBP establishes January 14, 2017 as the new effective date.
  • January 17, 2017: CBP delays the change until further notice.
  • June 8, 2017: CBP announces July 8, 2017 as the new effective date.
  • June 30, 2017: CBP announced another delay until further notice.

The changing implementation timelines reflect just how enormous a task it is to transition the government and the trade community to a single automated system for tracking, controlling and processing information related to the import and export of goods. However, it is hoped that our nation will benefit through more efficient collection of duties, taxes and fees and stronger border security because all the latest information will be more accessible in electronic form. In addition, automation will reduce the administrative burden and virtually eliminate paper-based activities. Beyond these lofty goals, ACE will connect the activities of PGAs and CBP in a more meaningful way and, hopefully, simplify the process for submitting data and interacting with CBP and PGAs.

From the beginning QuestaWeb has chosen to be a part of the movement to ACE in an active, participatory way. Our expert staff are not only regularly attending ACE-related meetings and keeping abreast of technology-related announcements, but also developing solutions that have facilitated customers’ transition to ACE each step along the way.

QuestaWeb’s is a technology leader when it comes to ACE. If you haven’t already read our earlier blog titled “Look to an Expert for Your ACE and ABI Needs,” do so now. We’ve established a credible reputation when it comes to EDI. Our technology innovations simplify the ACE process for our customers, increase their productivity and ensure compliance. What’s more, we’ve been ahead of the curve in terms of technology availability for all earlier deployments, and we will be ahead of the curve for the December 2017 and February 2018 implementation dates, too.

 

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IMPORTER COMPLIANCE AND THE DREADED FOCUSED ASSESSMENT

by Damon Baca

An ounce of prevention is worth a pound of cure.

Truer words were never spoken when it comes to U.S. Customs and Border Protection (CBP) focused assessments or audits. These reviews can be costly, time-intensive events that divert your organization from its primary business pursuits. Thus, it is important to do everything possible to prevent them or minimize their occurrence.

The first important step is to understand that CBP has two priorities: security and revenue collection. CPB places emphasis on securing cargo, performing rigorous denied party screenings and adhering to its rules and regulations as well as those imposed by other federal agencies. And, as the second biggest revenue source for the U.S. government, CBP pays particular attention to the processes in place to pay accurate tariffs and taxes.

Importers must align their priorities with CBP’s. Toward this end, there are several strategies they should implement, including

  • Developing a Reputation with CBP
  • Establishing a Corporate Compliance Program
  • Using Up-to-Date Tariff Codes
  • Maintaining Complete and Accurate Records
  • Having Third-Party Assessments Done Annually

Developing a Reputation with CBP

It’s essential that your firm be seen as part of the port community. One way to get involved and become known to local CBP officials is to have employees participate in workshops and training conducted by port authorities. It’s a great way to get to know the Customs officers – and an equally important means to demonstrate to the people who matter that you are doing your best to learn the rules and be compliant. Beyond the knowledge that can be gained, being a known entity could be invaluable should an oversight occur.

Likewise, being part of the Customs-Trade Partnership Against Terrorism (C-TPAT) program, a voluntary supply chain security program led by CBP, also sends a strong signal about your company’s commitment to compliance. And, if you achieve C-TPAT certification, it signals to all that you possess a documented process for assessing and minimizing risk throughout your international supply chain. Being certified not only gives you a specific point of contact at CBP (another way of establishing a relationship) but also categorizes your firm as low risk and confers benefits such as expedited cargo processing and fewer examinations.

The power of a good reputation cannot be underestimated.

Establishing a Corporate Compliance Program

In terms of limiting vulnerability to focused assessments and audits, having a corporate compliance program is essential. It’s important to appoint a compliance officer (preferably an executive-level person) and give that individual the ability to be effective in that role. If your company has a C-level executive who is not just responsible for compliance but also conversant in the rules and regulations, it speaks volumes to CBP. Even better, create a compliance department. Whether staffed by a single person or ten, having such a department connotes a high level of concern for compliant importing.

An optimum compliance program should include a written manual, even though Customs does not require companies to have one. The manual should be a physical document that you update regularly that delineates all of your processes and procedures for trade compliance and importing, especially valuation. There are, as you know, different ways to value products and different rules govern each process. Your compliance manual should include all the different valuation models or methodologies you use. Articulating your methodologies in writing not only reflects an understanding of the processes but also an emphasis on accurate payments to the government.

The second important piece of a compliance program is conducting internal training. The program should teach staff the policies, procedures, rules and regulation. Again, a training program conveys both internally and externally that trade compliance is a critical issue for which everyone in the company holds responsibility.

Using Up-to-Date Tariff Codes

Harmonized Tariff Schedule (HTS) codes form the backbone of international trade (HS codes if outside the United States). When a focused assessment or audit occurs, CBP, consistent with its priority of revenue collection, will want to know how you are managing your product database and how you are ensuring the HTS codes are current and correct.

It is imperative to periodically update the HTS codes used. Companies that update manually should establish a policy calling for an HTS code review and update every six months – and incorporate that requirement in their compliance manual. QuestaWeb customers benefit from automatic updates, simplifying compliance efforts.

Maintaining Complete and Accurate Records

Customs will review your records as part of its audit or focused assessment process. Having complete and accurate records is important and sends a powerful message.

Importers must maintain these trade-related records for a period of five years. Many companies maintain paper documents on file for five years and then purge them from the files. Reviewing the age of records and physically removing them can be a labor-intensive process. Notably, QuestaWeb customers have a Customs-approved methodology for automatically managing records electronically. Importers can capture and archive them in their QuestaWeb system and electronically purge them when the five years are up.

Your methodology for managing records should be covered in your compliance manual.

Having Third-Party Assessments Done Annually

It is one thing to establish an internal program featuring all the recommendations discussed. It is quite another to bring in an outside consultant to review your compliance program, procedures, security efforts, HTS codes and more for the purpose of evaluating their comprehensiveness. Periodic third-party assessments – a mock focused assessment done once a year – can be a great way to identify any shortcomings in your processes.

Expending the time and effort to have an outside party conduct mock assessments makes a powerful statement about your company’s commitment to compliance.

•  •  •

There are no sure-fire ways to avoid a CBP audit or focused assessment. However, by taking the steps outlined here you’ll be doing everything possible to minimize the possibilities of such a review – or perhaps limiting its severity.

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Broker/Forwarders: Stop Burning Money

by Dean Gionis

Every hour of every day broker/forwarders burn money unnecessarily. How? By using multiple, non-integrated software applications to perform services on behalf of their customers.

It is not uncommon for a broker/forwarder firm to have three, four or even five different systems in use. For example, there might be one software application for customs brokerage, one for freight forwarding, one for accounting and perhaps others for exporting, filing AMS and tracking shipments.

While broker/forwarders may attempt to make these systems interoperable – get them to “talk” to each other – integration is often easier contemplated than accomplished. Integration in this environment is a custom project and expensive to undertake and maintain over time. Furthermore, both the quality and extent of the custom integration often become money-draining issues. Often, only a partial integration is possible, meaning that only bits of information can be carried over from one system to another – and only in a one-way manner. That is, one system may push data out to the next, but the reverse is typically not feasible.

Beyond the inability to perform day-to-day functions well, multiple applications strung together by a loose integration pose other unnecessary costs if an automation problem arises. What happens if a regulatory or version change occurs in one solution? Will it affect the others? Then there’s customer service. To whom do you look for customer service? How do you identify the specific application creating the issue? How many software companies will you need to pay before the problem is identified and corrected?

These are the more obvious sources of lost revenues and additional costs. Another clear loss is the staff time wasted when multiple systems are in use. Consider the expense of entering and updating duplicative information in each system, as well as the cost of inconsistent information or outright errors.

Here’s just one example. Every broker/forwarder application possesses a customer profile. And, every profile will request similar details such as name, address, tax ID, key staff, transaction parties (i.e., manufacturers, ship to, bill to, etc.) and commodity details or products. If you have five applications, staff must enter this data five separate times. And, what if employee A enters “Smith & Co.” but employee B inputs “Smith and Company, Inc.,” is it the same company? Or, if employee C elects to use the headquarters address while employee D enters the local branch office, how long will it take employees to research whether it is the same firm?

Then, ponder how often customers move, experience employee turnover or change transaction parties. Every time any one of these data elements changes, the broker/forwarder must update the profile in the customs clearance system (ABI), the freight forwarding system, the accounting system and potentially other systems depending on its suite of services.

Not convinced yet? Follow this illustrative example of the typical workflow of a broker/forwarder relying on multiple systems. To book a shipment, staff must first find the customer profile within the forwarding system. Once located, they must create the shipment documentation, typing in all of the required information. Next, the broker/forwarder must either print or transmit the information. Then, staff must transfer to the customs systems to create the customs entry. After finding the customer profile, all the data related to the shipment must be reentered and forms printed or transmitted. And so on.

Consolidated billing is cumbersome, too, due to the need for manual steps that use valuable staff time and effort. Billing profiles, like customer profiles, are unique to each system. So, for billing purposes, accounting would need to extract client service fees from each system, calculate them and manually consolidate them in a single statement.

The inefficiency of multiple systems is shocking when actually held up to analysis. In contrast, a single system delivers many cost-saving benefits. It simplifies the broker/forwarder’s IT environment because there is one set of hardware and software and one service provider. Integration costs are lower because there is no need to pay a third party to develop custom interfaces between solutions. Component functionality is integrated by design. Support is less complicated, too, as there is one vendor to contact if an issue arises. And, of course, implementing one solution is less costly, easier and faster than the multiple implementations associated with a variety of systems.

One system means there is a single client profile, one billing record and so forth. And, any information entered into the system to create a shipment, for example, is preserved within the system and flows through to its other functionality. Following from the previous example, the solution will automatically populate the customs entry, minimizing errors. And, beyond maintaining a complete audit trail of every action taken, the solution preserves documents, generates reports, transmits documentation electronically and automatically creates a consolidated bill for all the services performed within a specified time period.

A single system delivers complete automation, which maximizes productivity and operational efficiency. Instead of losing time and money every hour of every day, broker/forwarders operate at peak efficiency and can use the time and savings to exploit new business opportunities, expand service offerings and more.

Broker/forwarders, it’s time to transform your operational environment with a single solution that maximizes savings and productivity. If you’re tired of burning money, talk to QuestaWeb today.

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