70 Best Practices Your Customs Ecosystem Can Perform Today to Generate Revenue & Protect Your Profits
Supply Chain Study: Part 2 of 5
In Part 1 we reviewed what a Customs Ecosystem is and how it is dependent on three key parts working together; your Customs team, your Customs Broker, and your Customs Compliance Advisory Firm.
In Part 2, we will review the 8 stakeholder groups who benefit from a best-in-class Customs Ecosystem, and take a deeper dive into two specific groups; Global Sourcing & Procurement.
For those simply interested in obtaining a copy of the complete report, a link is provided at the bottom of this post.
8 Stakeholder Groups Who Benefit from a Best-In-Class Customs Ecosystem
Stakeholder Benefactor #1 of 8: Global Sourcing
Common importer/exporter concerns & challenges involving the Global Sourcing team
Below is a listing of common concerns and challenges shared by importers and exporters:
- Maximizing Preferential Tariff Program Utilization (CPTPP, CUSMA, etc.)
- Enabling cost-effective sourcing by reducing/minimizing duty rates from eligible countries
- Accurate & Timely Supplier Country-of-Origin Validation
- Avoiding financial customs non-compliance penalties
- Ensuring accurate landed cost comparisons
- Deliver Pre-entry Classification Guidance
- Assisting sourcing teams to evaluate optimal suppliers using correct duty-inclusive costs
- Providing Input into Incoterms Negotiation
- Ensuring optimal risk, tax, and compliance balance is maintained with imported goods
- Early Supplier Engagement on Regulatory Tariffs & Barriers
- Preventing & minimizing sourcing delays due to political environment and/or non-compliant goods. (example: Forced Labour, government sanctions, etc.)
Best practises that your Customs Ecosystem can provide to the benefit of your Global Sourcing team to generate revenue & protect your profits
Of the 70 Best Practises identified in the study, below are those that benefited the Global Sourcing stakeholder group.
Internal Customs Department:
- Provide classification and origin validation data and support during the supplier selection process
- Assist sourcing teams with product specific Free Trade Agreement eligibility to reduce landed cost
- Support Incoterms negotiation with customs related cost considerations (example: F.O.B vs. D.D.P)
Customs Broker:
- Validate real-time Free Trade Agreement eligibility at time of entry
- Flag denied tariff treatments or origin gaps
Customs Compliance Advisory Firm:
- Conduct supplier origin audits and Bill of Materials analysis to maximize product’s Free Trade eligibility
- Model cost implications of sourcing from different countries factoring duty impact
- Secure advance rulings for tariff & duty cost predictability
- Appeal unfavourable rulings to further obtain duty cost predictability
Stakeholder Benefactor #2: Procurement
Common importer/exporter concerns & challenges involving the Procurement team
Below is a listing of common concerns and challenges shared by importers and exporters:
- Strategic Timing Around Duty Rate Changes
- Expediting volume buys or delay customs entries tied to known tariff changes
- Duty Recovery on Returned or Non-Compliant Goods
- Recovering costs tied to vendor quality or supplier failures
- Valuation Advisory for Vendor Negotiations
- Providing accurate information on indirect costs during negotiations
- Example: avoiding unreported โassists.โ that would impact the landed cost of goods
- Customs Rulings to Support Contractual Clarity
- Securing binding classification or valuation treatment before purchase order issuance
- HS Classification Databases for Pre-Bid Analysis
- Providing Procurement team with accurate landed cost estimates for competitive bids
Best practises that your Customs Ecosystem can provide to the benefit of your Procurement team to generate revenue & protect your profits
Of the 70 Best Practises identified in the study, below are those that benefited the Procurement stakeholder group.
Internal Customs Department:
- Ensure proper valuation inputs are included in declared values (e.g., assists)
- Validate product classifications for new goods
- Flag customs-related costs to avoid surprises
Customs Broker:
- Update system for classification and valuation changes
- Flag invoice discrepancies for resolution by the Internal Customs Department
Customs Compliance Advisory Firm:
- Audit vendor relationships for hidden dutiable costs
- Identify hidden costs due to misdeclarations
- Advise on supplier terms that may impact customs valuation (examples; Supplier Agreements, Supplier’s Shipping Handbook, etc.)
- Deliver supplier compliance scorecards based on customs risk
Download this Report
This concludes Part 2 of 5: 8 Stakeholders Who Benefit from a Best-in-Class Customs Ecosystem; #1. Global Sourcing, #2. Procurement
For those interested in downloading the full report
The link below will take you to our Contact Us Request Form.
Please copy the following and paste it into the message field of the form:
I would like to request a copy of 70 Best Practices Your Customs Ecosystem Can Perform Today to Generate Revenue & Protect Your Profits.
