Viewing Shipments Across Borders Decreases Risk And Increases Rewards

By Bob Johns, associate editor

Now that retailers are becoming truly international through their sourcing, knowing what is being shipped and complying with government regulations becomes paramount.

With retailers sourcing more of their product from a growing number of countries, it becomes increasingly important to be able to know what is being shipped, when, from where, and when it clears customs. I recently spoke with Integration Point’s Melissa Irmen and Kevin Shoemaker to discuss the importance of retailers knowing where their shipments are coming from and complying with customs regulations.

With the U.S. Customs and Border Protection (CBP) changes involving in-bond filing, how can retailers make sure they are compliant?

Irmen & Shoemaker: Many foreign trade retailers from the apparel, textile, and footwear vertical are required to use in-bond filing for merchandise that will pay duties at another point. Having these shipments held up for improper filing or other compliance issues can result in major losses for a company in sales and fines. The only way to be sure that all compliance is met is to work with a reputable provider of global trade management solutions. The CBP is making a transition to Automated Commercial Environment (ACE) for in-bond filing, and legacy functions will be turned off over time. If a retailer tries to continue using older functionality, its product risks being impounded and heavy fines being imposed.

What benefits do trade management solutions provide that retailers can’t accomplish on their own?

Irmen & Shoemaker: Unfortunately, the majority of retailers do not have the expertise, or the time to gain the expertise, to deal with the multiple countries of origin and multiple destination countries and all of their import/export laws. With constantly changing government regulations all over the world, retailers cannot possibly cost-effectively maintain the staff needed to pursue compliance. These solutions providers have dedicated staff that monitor the countries for compliance issues and implement changes immediately. This allows the retailer to ship and receive without concern that the shipments will be held up at port.

Retailers are on restrictive budgets now more than ever. How are these solutions becoming more cost-effective?

Irmen & Shoemaker: SaaS solutions can provide companies with a tangible ROI in as little as a few months. With many providers, the solution is entirely cloud-based and has a low implementation and maintenance cost. There is no additional hardware or technical expenditure required. Providers maintain all of the software and provide the updates. As new compliance issues, such as the recently implemented U.S.-South Korean Free Trade Agreement, the software is automatically updated for the retailer and their suppliers. Retailers and suppliers are able to instantly react to global changes and have the information available to make sourcing decisions and changes. As retailers become more global, they need to realize the dangers of noncompliance with the laws of the multitude of countries with which they deal. They also need to pay attention to whom their suppliers deal with. If the supplier cannot get materials due to compliance issues, the retailer will not get the final product either.