7/31/2019 Amber Road Three Common GTM Deficiencies eBook

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Three Common Global Trade Compliance

Deciencies that Aect Your Bottom Line

eBook

7/31/2019 Amber Road Three Common GTM Deficiencies eBook

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Three Common Global Trade Compliance Deciencies that Aect Your Bottom Line

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Our recent eBook, Three Common Global Supply Chain Issues that Aect Your Bottom Line,identied some common global logistics deciencies that are costing companies money. This eBookocuses on the cost o common global trade compliance deciencies.

Failing to Leverage Free Trade Agreements

Free trade agreements (FTAs) are a pact or program between a designated group o countries thathave agreed to eliminate most or all taris, quotas, special ees and taxes, on many (i not all) goodsand services traded between them. One o the most important goals o FTAs is the reduction o tradebarriers making it easier and cheaper or companies to export their products and services to tradingpartner markets. Companies that ail to recognize and take advantage o these opportunities are

paying up to 22% o the value o the imported goods in duties that they dont have to. Compoundingthis oversight is the act that duties are a tax, and as such, every dollar o duty avoided is a dollar thatgoes straight to your bottom line.

The most common reason most companies do not take advantage o FTAs is the administrative burdeno identiying applicable FTAs and qualiying products. With over 100 FTAs in place around the world,manually administering FTAs is understandably dicult. Global Trade Management solutions, however,help you manage the solicitation and qualication process with your suppliers or all the goods youimport. These solutions also help you determine whether your exports are eligible or preerential

treatment rom other countries. Ask the ollowing questions about your company: How do we determine, solicit and track eligibility or our goods, parts and services or preerential

treatment under any FTA?

How are we tracking and monitoring origin inormation or goods?

How do we deal with qualiying goods under multiple FTAs?

Automating the process can enable organizations to unlock the duty savings rom two or moreagreements while avoiding the costs o outsourcing the solicitation and qualication processes.

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Three Common Global Trade Compliance Deciencies that Aect Your Bottom Line

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Not Using Electronic Filing Eectively

Electronic ling occurs when you have a connection to Customs, either directly or via your brokers, andare able to submit your export or import inormation in the required data ormat.

Incorrect data can lead to costly delays and even penalties. A Global Trade Management solutionmakes it possible or you to enter inormation once, and submit it to the correct regulatory authorities.For example, importers must electronically submit the Importer Security Filing (ISF) data elements atleast 24 hours prior to arrival in a US port. Exporters must submit Electronic Export Inormation (EEI),along with ocean maniests using Customs Automated Export System (AES).

Ask these questions to see whether improvements in your electronic communication systems can help:

Are we experiencing high rates o delay or entry o goods due to incomplete or incorrectling data?

Do we spend a lot o time on the phone or email, going back and orth with our brokers?

Do we need to hire more people to keep up with the volume o lings or can we dothings smarter?

Using a GTM solution to eliminate the rekeying o data and acilitate electronic communication can

dramatically reduce error rates, provide visibility to a common set o data, and speed Customs lings.

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Three Common Global Trade Compliance Deciencies that Aect Your Bottom Line

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Not Taking Advantage o Duty Drawback and Deerral Programs

Drawback is a ull or partial reund, reduction or waiver o customs duties assessed or collected uponimportation o goods that are subsequently exported or destroyed. O course the rationale behinddrawback is to encourage businesses to compete internationally without the handicap o having toinclude the duty paid on imported goods in the sales price o merchandise.

In the US, to claim drawback, companies must prove that the merchandise imported was re-exportedwithin ve years. Typically a company can recover up to 80% o duties on qualiying imports.

Many companies ail to take advantage o duty drawback. It can be dicult to track which imports (orqualied substitute materials) are used to create goods or exports, and the rules or duty drawbacksare complex. Theyre so complex, in act, that an estimated 90% o drawback reunds go unclaimed.Like FTAs, thats money that could go straight to your bottom line.

Global Trade Management systems simpliy the duty drawback process by aligning imported goodswith the re-exported goods.

Are you taking ull advantage o duty drawbacks? Ask the ollowing questions:

How are we tracking imported goods (or qualied substitute materials) that are either used orexport or destroyed?

How do we currently le claims or duty drawback?

Do we have adequate resources to devote to ling drawback claims?

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Making The Changes

Recognizing areas where you may be losing money due to lack o process automation is only the rststep in improving operations. Implementing processes that improve the eciency o those areas is thenext step in reducing costs.

As with any process optimization initiative, measurement o current perormance is an important inputto uture improvement. Take some time to analyze some relevant inormation:

What percentage o our goods could qualiy or preerence under one or more reetrade agreements?

What is our requency o ling errors and the resulting cost o delays?

Are we leaving real money on the table by not claiming duty reunds?

With answers to these questions and others posed earlier, youll be able to determine whether aGlobal Trade Management solution will produce tangible results.

About Amber Road

Amber Road provides a single, on-demand platorm that automates and streamlines global trade. Byhelping organizations to comply with country-specic trade regulations, as well as plan, execute andtrack global shipments, Amber Road enables goods to fow unimpeded across international borders inthe most ecient, compliant and protable way.

One Meadowlands Plaza East Rutherford, NJ 07073 (T) 201 935 8588 (F) 201 935 5187 www.AmberRoad.com

Copyright Amber Road, Inc., 2012. All rights reserved.

Three Common Global Trade Compliance Deciencies that Aect Your Bottom Line