strategicinsight GLOBAL LOGISTICS — AMERICAS
ment systems (WMS).
“There’s so much information that has to be managed …
and some of that has to come all the way from manufac-
turing up through distribution,” Slossberg says. “The ERP
interface is critical because that’s where detailed informa-
tion about what’s coming into the zone begins.”
The WMS integration enables Yamaha’s daily inventory
reconciliation, which compares inventory in its ERP sys-
tem, data on what has physically entered and departed
from the FTZ, and the information submitted to customs.
The software does “a three-way check” to make sure YCA,
the third-party operator, and customs have consistent
information, and alerts YCA if there is a discrepancy,
Slossberg notes.
So much information is involved that integration is
essential for error reduction, streamlined processing, and
timely reporting, Kim says. “Without integration, day-to-day operations would be overwhelming.” Data collection
and reporting is so automated, in fact, that YCA manages
both FTZs with just one full-time and one part-time staffer.
IMMEDIATE SAVINGS
YCA’s foray into foreign trade zones has been “an extremely successful project when it comes to cost savings,” Kim
says. The importer no longer pays duties on imported merchandise that is later exported, and it does not pay state and
local inventory taxes on goods while they are in the FTZs.
YCA has reduced customs brokerage fees and can delay customs entries and duty payments until goods have been sold
and leave the zones for U.S. consumption.
In addition, the company has greatly reduced the
Merchandise Processing Fees it pays on formal entries. The
fees are assessed by CBP as a percentage of the value of the
goods, with a minimum of $25 and a maximum of $485 for
each entry. Because FTZ users are allowed to pay weekly,
YCA can cover all entries for a particular week with a single
filing subject to the $485 maximum. For some shipments,
the fees have been eliminated altogether.
There are other benefits as well. For example, YCA no
longer has to wait until goods have cleared customs before
picking them up from the carrier and delivering them to
the DC. Eliminating delays due to customs clearance has
cut up to three days off YCA’s order-to-delivery cycle. “It
also relieves the daily pressure of making customs entries
and allows us to deal with any delays on an immediate
basis,” Kim says. “In most cases, FTZ use allows sufficient
time to solve logistics and compliance issues, while the
computerized system keeps track of and warns us of exist-
ing and potential problems.”
For importers that may be considering using foreign trade
zones, Kim has this advice: “It is not a simple project, but it
is not overly painful either. The effort expended in shifting
processes is well worth the benefits attained. If you under-
stand the return on investment and have the proper players
aboard, you will experience cost savings right away.” ;
