10 Ways to Reduce the Cost and Risk of Global Trade Management

In today’s uncertain times, one thing remains certain: There will always be changing global trade rules and technologies. The following are 10 of the top ways we believe companies can ensure they are being as efficient, safe and cost-conscious as possible in the short run while building a sound infrastructure for future needs.

With the goals to reduce cost and risk in the supply chain, automation and working closely with partners are the two most practical areas of opportunity.

Below are the abbreviated 10 ways to reduce cost and risk in global trade management. For the full version, visit the Journal of Commerce website

1. Companies must validate more things.

2. Importers and exporters have more direct accountability.

3. Electronic submission is required.

4. Savings opportunities can be realized by having proactive plans.

5. Enabling scalability so companies can expand their trade management capabilities gracefully.

6. Build a virtual network of partners, vendors, agencies, etc.

7. SaaS-based systems are cheaper and easier to work with.

8. Supply chain security is critical.

9. Keeping the entire trade picture in view.

10. Part of corporate social responsibility reporting.

Managing global trade will continue to be laden with complexities and changes from all sides of the puzzle: governments, trading partners, service providers and related partners, nongovernmental interest groups and consumers. As such, importers and exporters are challenged to provide global trade processes that incorporate all the collaborating parties, changing laws, new and historical data and accomplished work from the virtual network. Utilizing automation and partners is more necessary than ever to streamline processes while ensuring the highest levels of safety and compliance.

Lacey Act Declaration Enforcement Delayed, Filing Procedures Clarified

The Department of Agriculture has issued a notice updating the trade community on the implementation of the import declaration requirement under the Lacey Act amendments. Specifically, the USDA is delaying the initial stage of enforcement of this requirement and clarifying the procedures for filing the declaration.

Enforcement. Under the Lacey Act amendments, imports of certain plants and plant products must be accompanied by import declaration containing the scientific name of the plant, the value of the importation, the quantity of the plant and the name of the country from which the plant was harvested. For paper and paperboard products containing recycled content the declaration must also include the average percent of recycled content regardless of species or country of harvest.

The USDA has now modified the schedule of phased-in enforcement of the declaration requirement that it had previously announced. As a result, while the electronic submission of the required data elements will be accepted starting April 1, enforcement will not actually begin until May 1. As of that date U.S. Customs and Border Protection will enforce the declaration requirement for imports under HTS headings 4401 (fuel wood), 4403 (wood in the rough), 4404 (hoopwood; poles, piles, stakes), 4406 (railway or tramway sleepers), 4407 (wood sawn or chipped lengthwise), 4408 (sheets for veneering), 4409 (wood continuously shaped), 4417 (tools, tool handles, broom handles), and 4418 (builders’ joinery and carpentry of wood).

USDA is encouraging importers to use this 30-day period for live testing of the electronic system. The government will use this time to complete its work on integrating the Lacey declaration requirement into CBP’s expedited border release programs.

It is not anticipated that enforcement of subsequent phases, as detailed below, will be delayed.

CBP has automated the process for collecting the required data elements and expects and urges most importers to use the electronic system to file the declaration. Specifically, data will be transmitted to the Automated Commercial System through the Automated Broker Interface in the cargo release module. Electronic filing of the declaration will not preclude remote location filing.

Importers will have the option to complete and present a paper declaration for each line, but if a paper form is used it must be mailed to USDA at the address on the form. If a paper form is submitted to CBP as part of the entry package it will be returned to the importer (or importer’s representative) for mailing to USDA.

For more information on deadlines and filing procedures, please visit the USDA at http://www.usda.gov

More information will also be available from Customs and Border Protection at http://www.cbp.gov

Optimizing Your Procurement Technology Investments in 2009

1. Get Visibility Into Your Spend (Spend Analysis)
If you don't know how much you're spending on each category, sub-category, product, and service, who you're spending it on, in what amount, by unit, you need to get this visibility. Get a good spend analysis solution and dive in!

2. Take Your Strategic Sourcing up a Notch (with e-Sourcing)
Start with the most attractive savings opportunities that were outlined in step 1. This is your best bet to negotiate big savings in this downturn.

3. Focus on Contract Compliance (adopt Contract Management)
You need to enforce hard-won savings by insuring that internal staff and suppliers are compliant with contractual agreements.

4. Implement e-Procurement
Done right, this will make it easy for your buyers to buy on contract.

5. Get a Grip on Global Trade (adopt Trade Visibility solutions)
Chances are your global sourcing endeavors are needlessly costing you more than you think! As per my recent Illumination on "why you need trade visibility", you're probably paying more than you need to on duty, using costly inefficient processes, paying unnecessary document preparation costs, and making costly errors that are costing you million of dollars a year.

To view this article, visit Sourcing Innovation at BLOG.SOURCINGINNOVATION.COM/2009/03/24/optimizing-your-procurement-technology-investments.aspx

Mexico Begins Retaliatory Tariffs on U.S. Exports

Mexico on Thursday began imposing tariffs on a range of U.S. exports ranging from grapes and Christmas trees to shampoo and cordless phones in retaliation for the decision by the U.S. government to end a pilot program that allowed Mexican truckers to operate in the United States.

The trucking ban was part of the omnibus spending bill signed into law earlier this month by President Obama.

Obama is planning a visit to Mexico on April 16-17, following a visit scheduled for next week by Secretary of State Hillary Clinton to Mexico City and Monterrey.

The National Association of Manufacturers on Thursday expressed deep concern that the Mexican tariffs would harm its members and employees by jeopardizing export sales. It said 17,000 manufacturing jobs were at risk.

“This is the worst possible time to send a signal to our closest trading partners that the United States does not take its commitments seriously,” it said.

The trade association said the cross-border truck program, under strong monitoring from the Department of Transportation, indicated that Mexican motor carriers can operate safely beyond the restricted commercial zone along the border.

Law firm Sandler, Travis & Rosenberg gave this partial list of impacted products and the new tariff amounts which range from 10 percent to 45 percent:
• Christmas trees, 20 percent.
• Onions, cabbage, pasta, 10 percent.
• Almonds, dates, peanuts, 20 percent.
• Fresh grapes, 45 percent.
• Fresh pears, apricots, cherries and strawberries, 20 percent.
• Frozen potatoes and peas, 20 percent.
• Fruit and vegetable juices, 20 percent.
• Wine and other alcoholic beverages, 20 percent.
• Health and beauty items, 15 percent.
• Tableware, kitchenware and glassware, 20 percent.
• Various printed matter, 20 percent.
• Manmade fiber yarn, 15 percent.
• Carpets, 20 percent.
• Jewelry, 20 percent.
• Home appliances, 15 percent to 20 percent.
• Cordless phones, 20 percent.
• Sunglasses, 15 percent.
• Pens and pencils, 20 percent.

To read more, visit the National Association of Manufacturers at http://www.nam.org

BIS studies Reasons for Under-Used Export Licenses

The U.S. Commerce Department’s Bureau of Industry and Security wants to know why so many export licenses that it issues to companies appear to be unused or used for less than the authorized quantity or value limits.

The agency said in a Federal Register notice of inquiry Friday that it’s “particularly interested in whether characteristics of the export license application review process induce applicants to apply for greater authorizations than they need and, if such is the case, any costs associated with such applicants.”

BIS issues licenses for exports subject to the Export Administration Regulations. Most licenses are valid for two years.

A recent BIS review of export data from the government’s Automated Export System indicated that by the end of calendar year 2007, 48 percent of the licenses issued
in calendar year 2005 for the export of commodities had not been used at all. The agency also found that some licenses may have been used for less than their full quantity or value.

In addition, BIS said it has no basis for estimating whether a similar lack of use or under-use exists with licenses for software or technology exports because these exports are often “intangible and, therefore, not reported in AES.”

The agency requested that industry comments be received by no later than May 4. For more details and contact information, access the BIS Federal Register notice.

To learn more, visit the US Bureau of Industry and Security at www.bis.doc.gov

Ross ERP Supports REACH Compliance for Chemical Manufacturers

Enterprise solutions provider CDC Software has released the latest version of Ross ERP, adding functionality to its enterprise resource planning application solution aimed at helping chemical manufacturers comply with recent international regulations.

The new version 6.3.2 of Ross ERP automates, processes and provides documentation that helps chemical companies comply with their obligations under the specific guidelines set forth in the European Union (EU) legislation called Registration, Evaluation, Authorization and Restriction of Chemical Substances (REACH), which became effective in June 2007, and which has recently been supplemented in January 2009.

Ross ERP version 6.3.2 not only helps EU companies maintain compliance with REACH, but it also assists U.S. and other non-EU companies to comply with REACH reporting, CDC said.

More specifically, Ross ERP version 6.3.2 addresses the EU REACH directive that forbids the sale of unapproved products within the European Economic Area (EEA) (EU, Iceland, Liechtenstein and Norway). Furthermore, REACH requires registration and selective evaluation of more than 30,000 chemical substances and it applies to chemical substances manufactured in, or imported into, the EU for ownership or conversion into finished products.

REACH is designed to help ensure that all parts of the supply chain — from manufacturers to downstream users such as distributors — have the information they need to use certain chemicals safely. This requires several steps, including the communication of information related to the health, safety and environmental properties of these chemicals, as well as required risk and risk management measures up and down the supply chain.

To view the full article, visit Supply&Demand Chain Executive at
http://www.sdcexec.com/web/online/IntegrationERP-News/Ross-ERP-Supports-REACH-Compliance-for-Chemical-Manufacturers/35$11144

FTZB Receives Application to Expand Activity in Illinois Zone

The Foreign-Trade Zones Board has received an application from the Tri-City Regional Port District, grantee of FTZ 31, requesting authority on behalf of WRB Refining LLC to expand the scope of manufacturing activity conducted under zone procedures within Subzone 31B at the WRB oil refinery complex at sites in Madison County, Ill. Comments on this application are due by May 19.

The refinery is undergoing an expansion that will add units and upgrade existing units within the subzone boundaries and is expected to expand crude production capacity up to 380,000 barrels per day. Zone procedures would exempt the increased production from customs duty payments on the foreign products used in its exports. On domestic sales of the increased production the company would be able to choose the duty rates for certain petrochemical feedstocks (zero) by admitting foreign crude oil in non-privileged foreign status.

To view this article, visit WorldTrade/Interactive at http://www.strtrade.com/wti/wti.asp?pub=0&story=30574&date=3%2F20%2F2009&company=