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Major Leading Chemical Company

Import Compliance for a Better Bottom Line: Managed Trade Services pre-audits put global manufacturer of plastics in control

Challenge:

At one point, the company, which operates in nearly 40 countries, had numerous vendors that were handling contrasting aspects of their business—some onsite, some offsite—including import customs brokerage and export forwarding. The company was constantly resetting their supply chain to adjust for new suppliers, outsourcing and low cost country sourcing.

The decentralized and multiple-resource approach was not delivering the process speed and cost efficiency the company wanted. Their number one goal was to identify a transportation provider that was truly global. The manufacturer was also looking for a logistics provider with deep experience in the range of its service product portfolio.

Solution:

At a Logichem conference in the United States (US), BDP was demonstrating its customer web portal BDPSmart to representatives of the prospective client company. A followup meeting was scheduled at the company’s offices and after an RFP process BDP was awarded the business.

Although the scope of the original RFP bid covered only ocean export the client expanded the range of services following BDP’s presentation. The company selected BDP to handle approximately 50,000 yearly transactions for multiple business groups in the US. BDP’s services for the producer include export booking, container pool management, ocean and air transportation, Customs brokerage, as well as managed trade compliance services. BDP exports raw materials for the divisions, which are sent to China to be produced into finished compounds, as well as compounds of pellets of various colors, sizes, grades, which are sent direct to the client’s customers for production of consumer goods, such as televisions and containers.

“One of the major reasons we looked to BDP was their strong experience in the chemical industry. Together with their global capabilities, the fit was right for us,” a representative of the client said. “If you can leverage those capabilities across the globe—and we have offices all over the world—it certainly strengthens the relationship. Documents flow smoother, communications are better.”

As a chemical company, compliance is a critical issue for this BDP client. “It is important to retain integrity within the Customs environment, particularly around chemicals,” said the client representative, who manages global sourcing of the company’s ocean freight, air freight, Customs brokerage and freight forwarding. “We handle hazardous materials periodically, so it is very important we rigorously focus on compliance,” he added.

BDP’s managed trade services appealed to the client and was one of the first components implemented. “In the traditional forwarding sense, compliance is very transactional, where you have a file and make sure it is compliant, transmit it to Customs and move the freight, etc. What we have is a standalone component, which we call Managed Trade Services—we pre-audit orders on the import side and ensure the shipments are compliant before they are placed at the point of origin,” said the account owner at BDP.

Within the client’s managed trade environment BDP performs a 100 percent pre- and post-audit of each file. This differs greatly from other accounts where a representative sampling and/or percentage of the transactions are audited for compliance purposes, the account owner said. “We provide robust compliance metrics back to the business and constantly review our process with the client in order to custom tailor the approach to their needs. This ensures a deep and definitive value-added return to the client.”

Weekly tactical calls review the audit findings and are followed up with a more strategic monthly call that analyzes the audit findings on a macro level to identify trends or gaps within the client’s and BDP’s mutual process.

According to the account owner, the increased vigilance allows for a deeper understanding of the client’s business and specific needs. “Our goal is to be proactive and to ready the path for the client’s strategic direction, so we can effectively reduce costs, maximize profits and eliminate issues before they occur,” he said.

Before BDP was brought in, previous providers remained reactive and filed for NAFTA refunds (520D’s) after entries had been made. BDP’s Managed Trade Services interaction allows the company’s staff to properly identify and classify products in order to avoid the refund process altogether. This protects the client’s cash flow, eliminates unnecessary clerical effort and streamlines communication with US Customs.

“NAFTA pre-certification allows us to get our refunds quicker. It gives us the advantage of knowing we are going to get the refund, instead of going back later and trying to qualify products to obtain a refund. BDP’s services have certainly helped a lot,” the client said. “Their effective management of the NAFTA process ensures items are entered and claimed accurately the first time, decreasing the need to ask Customs for refunds later in the process. We are extremely proud that BDP has taken our refund process from approximately 70% efficiency to 96% over the past year-and-a-half.”

According to the client, pre-screening and pre-clearance enables the company to be more efficient bringing material into the country, so that it is not delayed at ports or inland destinations. “This means we can utilize product when we need it,” the client said. “Without controls in place, shipments could arrive at one of our ports—due to a vendor error or a notification omission—and we would not know what was coming at us.”

Being able to outsource managed trade services is important for the client. “Before we moved to BDP, we had five different vendors managing it for us—one on the Mexican border, two on the Canadian border, one each on the east and west borders. There are obvious efficiencies in having a one-stop shop from the perspective of managing the relationship and helping to eliminate or reduce problems. It also results in both hard and soft cost savings for us,” he pointed out.

“We are very pleased with what BDP is doing for us— the rigor around the process they are providing us. It is a changing landscape so you have to be aware of the changes, the new regulations and security issues. BDP helps us stay on top of those changes,” the client said.

“BDP is a global corporation and has extensive experience in the chemical industry, which gives us an edge. Their corporate and global staff are experts—that is important because there is no room for error.”