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Top Ten Common FTZ Operational Problems - Home | NAFTZ€¦ · A Little Info About Crate and Barrel...
Transcript of Top Ten Common FTZ Operational Problems - Home | NAFTZ€¦ · A Little Info About Crate and Barrel...
FTZ: It’s Worth All The Pain!
• FTZ Benefits
– Duty savings
– MPF/Broker fees savings
– No drawback program
– Jobs & investment
• But Activation Can Also Come With Some Headaches
– Most are solvable
– Most have been experienced by another zone operator
– Many can be avoided in the first place
A Little Info About Crate and Barrel
• 3 FTZ’s (Newark, Chicago, SFO)
• 1st zone activated in 2006
• Goods subject to FDA, USDA, F&W, EPA, CPSC
• Exporting in-bond to Canada and Dubai
• Zone-to-zone transfers
• No manufacturing/production
• Volumes:
– 15,000 active SKU’s
– 500 HTSUS Numbers
– 9,000 annual import shipments
• Using a purchased FTZ software package
#1: Setting Up Your Systems
• Your ERP/WMS Has to Learn a New Language
– Translating inventory movements into FTZ transactions
• Out-of-Balances
– What didn’t we think about?
– What doesn’t happen very often?
#1: Setting Up Your Systems
• Validation Errors
• What’s Missing?
– Country of Origin
– Ports
– Currency
– HTSUS Numbers
– UOM’s
– Weight
#1: The Solutions
• “Know Before You Go”
• Pilot, Pilot, Pilot
• Validate Inventory Balances Frequently
– The higher your volume of SKU’s and transactions, the more often you should check balances
#2: CBP’s Systems
• It’s not enough to have your own systems in place – CBP has some work to do too!
– FTZ Online
– ACE Account
• A lot of data to get wrong
– FIRMS Code
– Facility Code
– Filer Code
– Zone #
– Site #
– ACE ID
– Port Code
– Bond #
#2: The Solutions
• Your Two New Best Friends:
– Your ABI Rep
– Your FTZ Officer
• Confirm Specific Data Points are Set Up Prior to Go-Live
#3: Off-System Transactions
• Regular Inventory Movements
– “Just passing through….”
– Extra samples/prototypes
– Part of another business channel
• Occasional Other Business Needs
– Customer Service
– Sales
#3: The Solutions
• Deactivated Space
– Is it in a warehouse address?
– Plan for future need, such as peak seasons
– Designate the area clearly
• Manual Transactions
– Your FTZ software can be a filter between your WMS and CBP
– Excellent internal communication
WMS FTZ CBP
#4: e214 & Estimated 3461 Issues
• e214 DOCS REQUIRED (B5)
– Direct Delivery
• Merchandise already received at facility
– Non-Direct Delivery
• Merchandise not yet authorized for movement to the zone
– Common reasons
• Census warnings
• HTS level screening/targeting
• OGA
– Adjustment e214s
• No documents available
#4: e214 & Estimated 3461 Issues
• Estimated 3461 DOCS REQUIRED
– Weekly Consumption Entry
– Estimate of what could ship vs. what actually ships (7501)
– Creating and maintaining the estimate
#4: The Solutions
• e214 DOCS REQUIRED
– Discuss with CBP in advance which documents must standardly be presented for review (if any), method of transmission and time frame for manual authorization
• Estimated 3461 DOCS REQUIRED
– Educate CBP about Weekly Entry and the intent of the estimated 3461 vs. the 7501
– Removing classifications from estimate
• Document Imaging System (DIS)?
#5: Receipt Discrepancies
• Direct Delivery
– Merchandise received, quantity verified, and information input into inventory system; then admission reported to CBP
– Quantity received/admitted vs. manifest quantity in AMS
• Non-Direct Delivery
– Admission reported to CBP; then merchandise received at zone, quantity verified, and information input into inventory system
– Quantity received/admitted vs. manifest quantity in AMS
vs.
Quantity Physically Received &
Recorded in Systems
13 cartons
#5: The Solutions
• Manual logs or additional electronic reporting tools may assist operators with receipting complexities
• Communicate with carriers/shippers in advance of activation so that solution for resolving manifest discrepancies in AMS is known and agreed upon
– Include requirements in contract language
#6: In-bond Issues
• In-bond merchandise moving to the zone
– Direct delivery or non-direct delivery?
– Bonded carriers
– Arrival in AMS
– Manual submission to CBP vs. electronic (QP/WP)
• Use of non-automated partners
– CFS/airlines
– Blanket PTTs
#6: In-bond Issues
• In-bond merchandise leaving the zone
– Manual submission to CBP vs. electronic (QP/WP)
• Weekly Export
– Bonded carriers
– Arrival in AMS
– Manifest discrepancies
#6: The Solutions
• Educate bonded carriers (and other partners) in advance on the process and expectations
• Select partners with FTZ experience if possible
#7: Scrap/Waste/Destruction
• Classification & valuation
• Process of destruction
• Proof of destruction
• Recoverable vs. irrecoverable
#7: The Solutions
• Programming systems to track & report scrap & waste/by-products correctly
• Educating employees on process
• Educating CBP on process
• CBP approval
– 216 and/or entry reporting
#8: Educating PGAs
• Are your imports controlled by PGAs?
– Subject to entry release
– Require reporting at the time of importation
• Examples:
– FDA
• Weekly Entry
• Prior Notice
– EPA
• Notice of Arrival
• TSCA
– USDA
– F&W
– And more…
#9: The Solutions
• Understand the regional/district office’s requirements and coordinate in advance
• ACE/ITDS
Image: FDA MAY
PROCEED in
ABI
#9: Educating CBP
• Ports with Few or No FTZ’s
• Turnover/Lack of Training
– Your officer may only be experienced in bonded warehouses
• Points That May Need Clarification
– Direct Delivery Privileges
– The extent to which your 3461 is an estimate
– Exception Situations
F T Z 101
#9: The Solutions
• Know Your Rights
– Resources
– Consultants
• Document Everything
– Procedures Manual
– Letters of Authorization
– On-Going Operations
• Conversations
• Audits
#10: Adjusting to Being an FTZ
• A New Mindset
– We’re not just a warehouse/factory any more
• Security
– Now it’s a felony to steal from us
– Signage
– Enhanced security measures
What would my FTZ
Administrator want
me to do?
#10: The Solutions
• Training
– Start a few months before expected activation
• Share the rewards
– Publish your successes/savings
– We’re all in this together
• Put the “Fun” in FTZ!