For companies involved in international trade, one of the key risk factors is a lack of understanding regarding customs regulations. Not only can getting to grips with regulatory environments be burdensome for companies and detract resources away from core business priorities, but failure to comply can lead to significant time delays and unforeseen cost implications. If cost drainage and time obstacles are major challenges experienced when moving goods from origin to destination, it might be time for companies to carefully scrutinize their logistics solution.
Managing Director of Dachser South Africa, Detlev Duve, says that when approached by potential clients looking for a logistics solution, a major concern for them is having to navigate the issue of customs. Duve says, “As the costs associated with bringing goods into South Africa are becoming more prohibitive, especially when importing from Europe and the United States, clients want the reassurance that they aren’t going to experience any unnecessary costs or unanticipated time delays.”
Duve says that Dachser South Africa has made it a priority for the company’s Air & Freight teams to be fully acquainted with customs regulations and procedures, which includes the legal requirements necessary for moving goods into or out of South Africa - and the African continent. To this end, Dachser has designed processes that streamline operational functions within the Customs team, which in turn is made up of specialist personnel who are able to analyse and assess client requirements. Duve says, “It is crucial for us that our dedicated teams understand what our clients are importing or exporting, and what the expected end process is of these products. Certain processes could entitle an importer or exporter to claim back a percentage of duties paid to Customs.” In addition, he says, the teams are able to verify all paperwork for compliance and accuracy, as well as verify and understand International Commercial Terms (known as Incoterms).
While there is no guarantee to avoid delays and storage when in Customs, there are certain guidelines that can be followed to reduce this time. Duve explains that a key criterion is to ensure rigorous compliance with Customs requirements. This includes making sure that the product is correctly classified and declared, that it is accurately valued and that the necessary documentation is on hand at the time of clearance. He says, “Dachser South Africa’s Air & Freight teams have a good working relationship with the local customs’ authorities. This has been nurtured over time through a keen anticipation of what must be supplied and a meticulous adherence to requirements.”
Most delays occur when importers provide the incorrect tariff headings, or do not have the sales agreement, proof of payment or correct literature to hand. Delays can also be experienced when the importer does not have the necessary permission to import the product and for which a permit or a Letter of Authority cannot be produced. Duve says, “We advise our clients thoroughly on the necessary requirements upfront, prior to beginning any process. We then closely monitor our clients’ entries and if an imminent delay is noticed, we act upon it immediately through the various channels. Our teams endeavour to follow these up frequently, and escalate, as required, until release is obtained.”
Duve says that the value derived from using an experienced logistics provider can lead to significant cost savings that the client might otherwise not have been aware of. For example, bonded storage enables cargo to be stored for up to 2 years. “Bonded store allows the importer a better cash flow given that they are able to remove goods only as and when needed. In doing so, the importer is only required to pay the VAT and Customs duties on those items extracted. Additionally, the importer can also transfer ownership of the goods, making the new owner liable for any VAT and duties payable.” Duve says that importers are also able to inspect the goods in the bond store, prior to paying VAT and duties, to ensure that the correct cargo was shipped and that the quality and quantity is correct.
Another option available to clients, says Duve, is when a portion of imported goods are planned for direct export. “In this event,” he explains, “the client wouldn’t want to clear the entire shipment. Dachser South Africa will clear the goods directly into our bond store and no duty or VAT will be paid until the cargo is moved out. We keep full control of the stock. Should the client require a portion of stock to be released for local supply we clear the goods, directly paying the duty and VAT and then bill the client for this. If another portion of the stock were required to be moved out to Botswana, for example, Dachser South Africa would move this out with a bonded truck to Botswana where the cargo would be cleared. In this way, the client is spared having to pay duty and VAT twice as they would have should it have been cleared as a normal duty upon entry.”
To remain competitive, Duve says that Dachser South Africa continues to seek value-added solutions for their clients. “Our commitment is to provide our clients with a holistic and seamless solution. In doing so, we consider ourselves as an extension of our clients’ businesses. This means that we take care of all aspects of the transportation, storing, handling and safe delivery of goods from origin to destination.”