How to Save Your Company Import Costs in the New Year

As the New Year draws closer, it is time to look at the savings goals for your company’s yearly imports. There are several different ways to save on import transaction, but identifying the right strategy that benefits your business is the key to successfully meeting your savings goal budget for the year.

Free Trade Agreements

Free Trade Agreements are a good source for minimizing duties and taxes on imported goods. Reviewing entry data from the previous year and analyzing where goods are being importing from, what is the country of origin of the goods, and how much duty is being paid will allow you to focus on the greatest savings opportunity. Identify imports from Canada and Mexico, if the country of origin was Canada or Mexico on the goods, review to identify if the goods qualify for NAFTA and potentially save your company on import duty and taxes.

Brokerage Rates

The New Year is a good time to evaluate your current brokerage rates. How much is your company being charged on brokerage fees, document fees, handling fees, etc.  Are you paying your broker per shipment or a flat rate?  Do you have enough entries to justify the payment method you have?  Would another model better suit your needs?  Conducting a brokerage RFQ will give you options on new service providers and benchmark rates for negation.

Temporary Import Bonds

Does your company import goods in the US to be used temporarily and then export the goods? US Customs allows importers to file a Temporary Import Bond (TIB) on goods that they will import into the US and then export them within a timeframe of 1 year.  An additional extension can be requested, but it is important to know the projected timeframe before goods are imported using a TIB to ensure timely export before the expiration of the TIB.

Drawback

Duty Drawback allows importers to receive a refund on import duties paid, when they export the imported goods within a set time. Duty drawback can be filed on a variety of different imports including Direct Identification Manufacturing, Substation Manufacturing, Rejected Merchandise, and Unused Goods. The drawback filer may file drawback on duty paid on entries. Importers have 3 years to the date of export to file a claim with a US Customs Drawback office for a refund.

Returned Goods

Goods that were exported for repairs or alterations can be eligible for preferential treatments. Exported goods of US origin, which are returning for repair, can claim preferential tariff if the required proof documentation is kept on file. In both cases, duty and MPF are free on these goods (under Chapter 98).

Free Trade Zones and Warehouses

Free Trade Zone’s (FTZ) and bonded warehouses can be utilized to save on duties for imports. Goods that are imported to an FTZ are held in a warehouse for manufacturing or distribution. This can defer duty payments until the goods are ready for import, or allow the goods to be exported, without ever having been entered into commerce. When most goods are entered into a warehouse, they can be assembled, manipulated, manufactured, repaired, etc. within the constraints of the FTZ.  Many of these processes can change a good from a part or material with a high duty rate, to a machine or assembly with little or no duty.

Clearance Times and Storage Cost

Goods with longer clearance times and delays can have much higher costs including storage and detention charges. To improve and measure the performance of brokerage, freight forwarders and service providers can identify these unnecessary costs and any gaps you might have in your supply chain. Identifying and correcting these delays and gaps will not only increase savings on additional costs, but will improve transit and delivery times.

All savings opportunities have a set amount of risk in implementation. Risk could be a potential increase in delays, liquidated damages, or penalties from US Customs.  However, when these programs and processes are implemented correctly, there is an opportunity for massive savings.  Fortunately, Allyn International has the expertise and experience in utilizing these strategies that can prove to be a huge asset to your business.

About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance.  Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe and Asia and Allyn regional headquarters are strategically located in Fort Myers FL USA, Shanghai P.R. CHINA and Prague, CZECH REPUBLIC. For more information, log on to www.allynintl.com.