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:
compliance
complexity
credentialing
confirmation

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

Closing the Loop with Entry Visibility

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