Closing the Loop with Entry Visibility

© 2014 Integration Point www.IntegrationPoint.com

Closing the Loop with Entry Visibility

© 2014 Integration Point www.IntegrationPoint.com 2

Did you know…

Today, an international transaction could require as many as 35 documents across 25 parties complying with over 600 regulations and more than 500 free trade agreements.

Did you know…


Supply Chain Visibility

Supply Chain Visibility is defined as an organization's ability to collect data from across the supply chain, analyze it, create reports on that data in an effort to highlight exceptions, and then generate recommendations for corrective action to be taken in real-time.


With the recent breakdown in the Doha round of the World Trade Organization's multilateral trade negotiations, it is expected that the number of bilateral trade agreements will continue to rise rapidly over the next few years. This will complicate the average international transaction even further.


Entry Visibility

A key aspect of supply chain visibility is entry visibility aims to ensure that all regulatory, compliance, and documentation requirements are met in a timely fashion along the way.


Entry Visibility

An Entry Visibility Solution:• Automates the pre-entry documentation and post-entry

reconciliation processes• Becomes the system of record for trade compliance related data• Puts all pieces in place to automatically validate filings. • Determines if key compliance data is being shared and used

correctly by all trading partners as product moves through the supply chain.


Global Trade Challenges

Did you know that…– As a result of changing international policies and

security measures, global trade is fraught with challenges including:

compliancecomplexitycredentialingconfirmation



The effort required to meet the compliance requirements alone is a daunting task for any organization. As a result, the bottom tier of respondents in a recent Aberdeen study on Global Trade Compliance Priorities had an average trade compliance error rate of 25.7% on their international orders.

Compliance Challenge

Complexity Challenge

Even if an importer could ignore the 25 different parties involved in a typical import transaction, an importer would still have to synchronize operations with their customers, suppliers, distributors, third party logistics operators, freight forwarders, and brokers.


An effective post-entry audit solution must support the ability to compare value, quantities, and classification information with what is declared in the entry filings (including the 7501 and10+2 submissions). When importing multiple items in a single shipment, this can translate into a significant amount of information that, if not included in the entry packet, must be available immediately upon request.

Credentialing Challenge

Confirmation Challenge


The Mod Act also includes a "Reasonable Care" provision. This essentially means that importers and brokers need a comprehensive audit process to ensure that they have adhered to all known compliance requirements and that they have provided the correct information on all of the entry filings made on their own, or their clients’, behalf.


Global Trade Opportunities

A company that overcomes these global trade challenges is presented with a significant number of opportunities like:

– Duty savings – Process savings– Compliance cost avoidance


Duty savings

– An average company that only audits 10% of its entries under a regular random audit is likely to be losing millions of dollars a year due to misclassifications and missed opportunities under free trade agreements (such as NAFTA), free trade zones, and other special programs.

– The wrong duty was paid on 11% of international shipments.*– Between $1.5 and $2.3 billion of the $20 billion collectively paid

by over 300,000 importers to the U.S. Government each year is likely an overpayment (due to a misclassification) and is eligible for refund to the importer.

* Global Trade Compliance Priorities in 2008, Viktoriya Sadlovska, Aberdeen, March 2008

Did you know…


Process Savings

– The cost for each additional day that goods spend 'in transit' has been estimated to be 0.5% of the total value of the goods

– A few days shaved off the total cycle time can save hundreds of thousands of dollars on a large shipment *

– One way to improve the cycle time is to reduce or eliminate any potential delay at the border with Customs

– A way of accomplishing this starts with the Purchase Order and the Commercial Invoice

– Today, importers rarely verify data in these two documents against an importer’s classification database

– By not doing so the importer runs the risk of having a shipment delayed, or even seized

* Hummels, David, 2001. "Time as a Trade Barrier," GTAP Working Papers 1152, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University

Did you know…


Compliance Cost Avoidance

• There is a considerable cost of creating, maintaining, and distributing all of the documentation needed to remain in compliance.

• In a time of “do more with less”, automation can increase the efficiency of a compliance department, improve their compliance rating, realize overlooked duty savings, and minimize the potential of incurring fines and penalties.

• Costs can be minimized by taking the necessary steps to avoid penalties that result when errors are repeatedly made before they are discovered by an outside party.


Entry Visibility Closes the Loop

But the key to reduce liabilities and increase efficiencies is ensuring that the loop that connects the shipper, the broker, the customer and the buyer is unbroken.

An entry visibility solution allows a buyer to send all of the necessary classification and filing information to the broker up front. This allows for the automatic retrieval and reconciliation of the entry filing on the backend and therefore closes the visibility loop.


Entry Visibility Closes the Loop

• And entry visibility solution allows an importer to address the challenges of global trade:– Compliance– Complexity– Credentialing– Confirmation– Savings opportunities


Improved Compliance

A modern entry visibility solution increases the odds that accurate and complete data is used in the entry, any (a)(1)(A) records, and forms required by customs on every import, as well as a complete entry packet that supports the declared value, quantity, and classification for every product shipped across international borders.


Reduced Complexity

Keeping customers, suppliers, third party logistics carriers, freight forwarders, and brokers all on the same page can be accomplished using an entry visibility system that allows all parties to view the same data. The best of these systems offer a web-based interface that helps all involved parties gain easy, anytime access to the system and a single, unified database.


Approved Credentialing

An entry visibility solution must give the importer the ability to store, query, and retrieve data declared in any documentation filed with Customs.

A recommendation from Customs is that a “company maintains a software application that tracks underlying entry information”. Considering Customs emphasis on maintaining this data, an entry visibility solution must be able to capture this “underlying” data and then provide the ability to create detailed reports to support what Customs might ask the organization.


100% Confirmation

With an entry visibility solution, every entry can be automatically audited and compared to pre-entry classification data, purchase orders, invoices, and global classification data to insure compliance across the board.


Duty Savings

Entry visibility solutions automatically compare filings with the company’s own internal classification data and global classification sources. The system will immediately generate an alert regarding any discrepancies.


Conclusion

• Traditionally, visibility into global trade was limited. This made staying compliant as an importer or exporter a very complicated and time-consuming process that was costly and error-prone.

• All of that has changed with the introduction of newer trade visibility solutions that give a buyer or broker real-time visibility into the process.

• This enables them to "close the loop" and effectively connect the buyer to the broker to the 3PL to the supplier and even to the customer through a single platform. These parties can have instant status visibility and real-time data updates.


For more on how to close the loop with entry visibility, download the full white paper at:

http://www.integrationpoint.com/products/EntryVisibilityWP1.html

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Closing the Loop with Entry Visibility