Sunday, March 11, 2012

It's Not About USCustoms

I was doing some research when I came across this blogpost, which was amusing.  I did leave a comment, which is "awaiting moderation" (when has anything I have to say need moderation?!) so you can read the blog post and the linnk and here is my comment:


I’ve been importing since 1974 at the small business level and have seen lots of changes. One constant is people not doing their job and then blaming others. I wrote a book on the topic and am an adjunct lecturer at San Francisco State University on the topic. I can and do occasionally fill out all of the paperwork (7501, ID Permit, and even how Customs makes the Homeland Security supplier code) required by a customsbroker to get goods into USA. So I know what I am talking about when I say get a customsbroker. I use customsbrokers. Finding an excellent broker, the best one for you, takes about an hour, but it is your job. And that test is no joy ride, only 6% of those who take it pass.
( If the value is more than say $2000, get a broker, less than that just make sure you have the supplier mail it to your home. )
Yes, I know my way around the HTS and CFR 19, and yes it is true it is difficult to get hard and fast answers, but they can be had, for a price. Or you can manage the uncertainty, which again, is your job. If the customsbroker says “well, it might be this HTS at 6%, or that HTS at 12%..” then figure the 12% in your costings, and when the entry liquidates in a year or so, you are either fine or Uncle Sam sends you a check for your overpayment. Same thing with freight, when they are not sure whether it is this or that, then pick the worse case scenario. And so on.
When you know what your product is, who your customers are, and have identified the supplier and the weights and measures and cost of the minimum production run of the supplier, then sit with the best customsbroker and have them dummy up a set of proforma documents on a shipment. (Any less info that that and you are wasting everyone’s time). The customsbroker will dummy up a set of docs at no charge. Have them show you all of the costs, worst case scenario, and their bills and anything else. From there you can figure what your need to charge your customers to make money.
I will remonstrate with customsbrokers: you do leave things out you know about. Since I am experienced, I can figure out what those are, but you need to include “outport services” or whatever else in your proforma.
Newbies: At the meeting, bug the customsbroker, “what else?” What else?’ then when the broker is done, ask them if they will sign it as a promise that is all of the charges. (They will not, but let them know you are serious.)
I will say if the person involved above found a $500 variation on costs on a full container load a deal breaker, then the margins are too tight. Also, at the small business level, FCL shipments are usually a bad idea. AS she found out, surprises are too big.
And yes, government hates small business, but that is not unique to USCustoms. They are just the messenger. The world can be a wicked place, and that is good to know. Your job is to manage things so it works for you.


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