Crate & Barrel’s path to ’10+2′
Crate & Barrel imports housewares and furniture from 30 to 40 countries. It has about 7,500 shipments per year, many of them full containerloads. It uses three ocean carriers and a dozen freight forwarders to move its goods.
The number of logistics providers made it necessary for the company to find a third party to automate the Importer Security Filing compliance process. In early April, the retailer was in the final stages of selecting a software provider that could pull together the required data in an ISF document and transmit it to U.S. Customs.
What follows is an account by Virginia Thompson, manager of import/export operations and international trade compliance, about how Crate & Barrel is preparing to comply with the new '10+2' advance trade data requirements. She spoke at the International Compliance Professionals Association (ICPA) conference in Anaheim, Calif., on March 11:
'Once the rule was published we drafted a request for proposal for about eight companies that we had scouted out to fill that role. (It took about three months to narrow our party selection and get all questions for the RFP.) Because of concerns about the high cost of implementation in terms of service fees, we realized that for our volume and complexity we needed a very electronic and automated solution. So what we're looking to do is to pass our purchase orders electronically to that provider.
'Our purchase orders have eight of the 10 data elements on them, so we're 80 percent of the way there. And that provider will give us a Web portal for our vendors to go into and key in the (bill of lading) B/L number, the stuffing location and the consolidator, which are the data elements we did not have on our (purchase orders) POs.
'In addition, that provider will be able to take our advance ship notice that we get from some vendors and marry it up with our POs and stock keeping units (SKUs) that are on those shipments to create the ISF and file it.
'So basically, what we've found is it's going to be a lot of work, it's a lot of data integration, but by taking that approach we think we'll be able to make it fairly cost effective.
'We're cognizant of how important it is to have a good track record of filing your ISF (during the soft implementation period), so for a company like ours that is taking a number of months to work out this RFP, pick our agent, start the integration and implementation, we're not waiting to file. We're working with our customs broker and collecting data manually from a handful of our bigger shippers that represent various countries around the world, different supply chains we have, and we're having them file them for us in the interim to keep us on the radar screen so that we're showing Customs that we're working towards full implementation.
'And I would highly recommend that to anybody who is seeking a longer-term electronic solution later this year.
'What we've found has made the process easier than it would have been otherwise in having our SKUs classified. We're a relatively large importer, but we didn't have our SKUs classified until a few years ago, and were doing everything extremely manually. We're moving towards more automation now, but that has been a huge asset. I feel very grateful that we had moved in that direction because our 4,000 to 5,000 active SKUs at any one time ' if we hadn't had HTS (Harmonized Tariff Schedule), country of origin and manufacturer tied to them this would have been a lot harder.
'So I would encourage anybody who doesn't have those SKUs classified to get out there and start working on that now.
'We absolutely will hold our provider to filing accurately if we provided accurate information. If we don't provide accurate information to the provider, they can't be held liable for filing something inaccurately. We will be extending that to our manufacturer vendor base as well. We will start writing language into our purchase order contracts and make sure that they understand it's $5,000 per hit if you provide us with incorrect stuffing location, consolidator, you don't get the B/L number in time, that sort of issue.
'This isn't like antidumping duties. You can charge back. So, yes, we have a liability. But if somebody in our supply chain falls down in getting us the accurate information we absolutely will be charging back.
'Even though Crate & Barrel doesn't qualify as a small or medium-enterprise anymore, we're a small company at heart. My best advice I can give you is internal communication. Reach out to all those people who might possibly be controlling the origin of that shipment. We've been doing a lot of outreach to our merchandising department, and whoever else might be responsible for going to that vendor so that they understand what '10+2' is all about, they understand our liability. We're even talking to them about if you're going to ship a sample by ocean, it's got to have a SKU, it's got to be in our purchase order system. No more of the vendor just tosses it in a container and ships it to you. Everything has got to be manifested in our system so that we can classify it and report it on our ISF.'