Repeat Business

Repeat Business

Copyright 2004, Traffic World, Inc.

Computers and software can''t replace human beings - not in what many consider the really important matters, at least. But in international trade, they can help speed the flow of goods through customs and reduce errors, even if customs brokers remain an essential part of the process.

Bill Ansley, vice president of UPS trade management services, said international trade logistics software is most helpful in managing and retaining data when a shipper is shipping the same type of item repeatedly. As the nation''s fourth largest customs broker with some four million customs entries each year, UPS knows something about repetitive shipping. It is the largest U.S. broker and has customs operations in 120 other countries.

UPS Supply Chain Solutions recently introduced technology to improve shipment visibility, alert monitoring and document imaging for customers. UPS and UPS Supply Chain Solutions also combined their brokerage entities into one unit under UPS Supply Chain Solutions. The unit processes customs entries for goods delivered via UPS''s small package, air, ocean, ground and rail shipments managed by UPS Supply Chain Solutions.

Tools such as ITL software enable a company to make a decision "once and apply it multiple times," he said. "So if it is a repeat item, you can consistently classify it."

Analysts point out that ITL software sales have been flat during the past two years. However, with the economy heating up, technology advancing and spending on technology rising, there may be greater opportunity for shippers to purchase ITL software.

ITL software can open a window into the supply chain, a reference for looking up classifications and a way to calculate landed costs, said Ken Bargteil, vice president for third party logistics provider Kuehne & Nagel and customs committee chairman for the National Customs Brokers & Forwarders Association of America.

While there is some duplication between what the software does and what a customs broker does, the two are not focused on the same areas. "Brokers deal more with the tools necessary to transmit information to Customs. Many have built their own systems" to do so, said Ansley.

Brokers also are reliant on the information provided by the shipper - which is why the shipper is ultimately liable, he said. "Brokers work from shipping documents and commercial documents - all the evidence in the documents. An importer may know whether he paid royalties, commissions" and other information.

Managing those documents is a major goal of most ITL software. Tim Davenport, president and CEO of Vastera, an ITL software and services company, said his company''s solutions can help clients lower costs and compliance issues by optimizing their trade management.

"Over 50 percent of the Global 2,000 are in the early stages of figuring out how to optimize their trade management. One of the drivers is the formation of trade programs that are literally being created all over the world," he said.

Before ITL software, many international shippers relied on customs brokers to help them get the best rates, said Davenport. Many still do. ITL software does help shippers perform some of the functions customarily handled by brokers, but it doesn''t necessarily replace them.

Brokers file 95 percent of all import entries with customs, Bargteil points out. Large companies have moved to employing brokers internally, a trend Bargteil has seen develop over the past 10 to 15 years. "The cost of a broker is to prepare and file entries. Brokers do a lot more than that, but that''s a core element - that is a relatively small cost to the downside of getting it wrong," he said.