Buy or borrow? (page 2)

-- Logistics Management, 3/1/2005

Page 2 of 3

One company that uses Quantum View Manage to improve the accuracy of its customs documentation is America II Electronics, a St. Petersburg, Fla., distributor of electronic components. The company sources more than 120,000 parts and components from suppliers worldwide, says Import Coordinator Frank Oliveira.

With so many different products to track, customs brokers sometimes applied incorrect Harmonized Tariff Code classifications. To address that problem, the distributor created a database of the 60,000 most frequently used part numbers and their correct classifications, which is updated monthly and shared with UPS and other customs brokers the company uses. When the brokers prepare customs documentation, they look up the item in the database to find the correct classification.

That approach has greatly reduced errors, but Quantum View Manage allows America II to go an extra step and catch any remaining errors before they become costly problems. Oliveira is able to look at images of such documents as commercial invoices and 7501 entries for UPS shipments before a package arrives. If he spots an error, he simply sends an e-mail with instructions for the correction back to UPS. "That gives us the ability to verify and correct documents before a package arrives, and before the 10-day [Customs] liquidation period is up," he says. "That way we don't have to pay to amend the entry before it is sent to Customs."

Decision Factors

GTM products and services provided by third parties clearly have a lot to offer in terms of cost and convenience. But there are other factors that may make it wiser for importers to buy their own software. Which route to take depends on the following considerations, say providers:

Big needs, small budget. Smaller companies that derive a significant percentage of their revenues from international business have a lot riding on customs compliance. Yet buying GTM software often is beyond their means, says Huff of UPS.

Need for neutrality. Importers that work with multiple service providers may need a neutral information system, suggests Darren Maynard, COO of GTM software provider NextLinx. "If you use four or five different brokers and carriers, then you could have a really tough time using service providers' technology, because the data you need to analyze gets fragmented and spread over multiple tools," he says.

Desire to centralize control. A single GTM platform ensures consistent levels of regulatory compliance and standard processes worldwide. "If I rely on multiple logistics providers for compliance, do I have to stay awake at night wondering if every one of them has tracked everything properly?" asks Chadd Westhoff, director of product management for Vastera, a provider of GTM services.

Complexity of trade operations. Importers whose shipments tend to be routine or infrequent may find that online GTM services meet their needs. But companies that have complex global trade operations with unique requirements may need more flexibility and customization than those products typically can provide, says Westhoff. Continued...

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