Top Ten Common FTZ Operational Problems - …

1 Top Ten Common FTZ Operational Problems FTZ: It's Worth All The Pain! FTZ Benefits Duty savings MPF/Broker fees savings No drawback program Jobs & investment But Activation Can Also Come With Some Headaches Most are solvable Most have been experienced by another zone operator Many can be avoided in the first place A Little Info About Crate and Barrel 3 FTZ's (Newark, Chicago, SFO). 1st zone activated in 2006. Goods subject to FDA, USDA, F&W, EPA, CPSC. Exporting in-bond to Canada and Dubai Zone-to-zone transfers No manufacturing/production Volumes: 15,000 active SKU's 500 HTSUS Numbers 9,000 annual import shipments Using a purchased FTZ software package #1: Setting Up Your Systems Your ERP/WMS Has to Learn a New Language Translating inventory movements into FTZ transactions Out-of-Balances What didn't we think about? What doesn't happen very often? #1: Setting Up Your Systems Validation Errors What's Missing? Country of Origin Ports Currency HTSUS Numbers UOM's Weight #1: The Solutions Know Before You Go.

2 Pilot, Pilot, Pilot Validate Inventory Balances Frequently The higher your volume of SKU's and transactions, the more often you should check balances #2: CBP's Systems It's not enough to have your own systems in place CBP has some work to do too! FTZ Online ACE Account A lot of data to get wrong FIRMS Code Facility Code Filer Code Zone #. Site #. ACE ID. Port Code Bond #. #2: The Solutions Your Two New Best Friends: Your ABI Rep Your FTZ Officer Confirm Specific Data Points are Set Up Prior to Go-Live #3: Off-System Transactions Regular Inventory Movements Just passing through .. Extra samples/prototypes Part of another business channel Occasional Other Business Needs Customer Service Sales #3: The Solutions Deactivated Space Is it in a warehouse address? Plan for future need, such as peak seasons Designate the area clearly Manual Transactions Your FTZ software can be a filter between your WMS and CBP. Excellent internal communication WMS FTZ CBP. #4: e214 & Estimated 3461 Issues e214 DOCS REQUIRED (B5).

3 Direct Delivery Merchandise already received at facility Non-Direct Delivery Merchandise not yet authorized for movement to the zone Common reasons Census warnings HTS level screening/targeting OGA. Adjustment e214s No documents available #4: e214 & Estimated 3461 Issues Estimated 3461 DOCS REQUIRED. Weekly Consumption Entry Estimate of what could ship vs. what actually ships (7501). Creating and maintaining the estimate #4: The Solutions e214 DOCS REQUIRED. Discuss with CBP in advance which documents must standardly be presented for review (if any), method of transmission and time frame for manual authorization Estimated 3461 DOCS REQUIRED. Educate CBP about Weekly Entry and the intent of the estimated 3461 vs. the 7501. Removing classifications from estimate Document Imaging System (DIS)? #5: Receipt Discrepancies Direct Delivery Merchandise received, quantity verified, and information input into inventory system; then admission reported to CBP. Quantity received/admitted vs.

4 Manifest quantity in AMS. Non-Direct Delivery Admission reported to CBP; then merchandise received at zone, quantity verified, and information input into inventory system Quantity received/admitted vs. manifest quantity in AMS. Quantity Physically Received &. Recorded in Systems 13 cartons vs. #5: The Solutions Manual logs or additional electronic reporting tools may assist operators with receipting complexities Communicate with carriers/shippers in advance of activation so that solution for resolving manifest discrepancies in AMS. is known and agreed upon Include requirements in contract language #6: In-bond Issues In-bond merchandise moving to the zone Direct delivery or non-direct delivery? Bonded carriers Arrival in AMS. Manual submission to CBP vs. electronic (QP/WP). Use of non-automated partners CFS/airlines Blanket PTTs #6: In-bond Issues In-bond merchandise leaving the zone Manual submission to CBP vs. electronic (QP/WP). Weekly Export Bonded carriers Arrival in AMS.

5 Manifest discrepancies #6: The Solutions Educate bonded carriers (and other partners) in advance on the process and expectations Select partners with FTZ experience if possible #7: Scrap/Waste/Destruction Classification & valuation Process of destruction Proof of destruction Recoverable vs. irrecoverable #7: The Solutions Programming systems to track & report scrap & waste/by- products correctly Educating employees on process Educating CBP on process CBP approval 216 and/or entry reporting #8: Educating PGAs Are your imports controlled by PGAs? Subject to entry release Require reporting at the time of importation Examples: FDA. Weekly Entry Prior Notice EPA. Notice of Arrival TSCA. USDA. F&W. And more . #9: The Solutions Understand the regional/district office's requirements and coordinate in advance ACE/ITDS. Image: FDA MAY. PROCEED in ABI. #9: Educating CBP. Ports with Few or No FTZ's Turnover/Lack of Training Your officer may only be experienced in bonded warehouses Points That May Need Clarification Direct Delivery Privileges The extent to which your 3461 is an estimate Exception Situations F T Z 101.

6 #9: The Solutions Know Your Rights Resources Consultants Document Everything Procedures Manual Letters of Authorization On-Going Operations Conversations Audits #10: Adjusting to Being an FTZ. A New Mindset We're not just a warehouse/factory any more Security Now it's a felony to steal from us Signage Enhanced security measures What would my FTZ. Administrator want me to do? #10: The Solutions Training Start a few months before expected activation Share the rewards Publish your successes/savings We're all in this together Put the Fun in FTZ! The Key to Avoiding FTZ Operational Problems Prepare Systems Training Communicate Internally With Customs With PGA's With Partners (brokers/carriers). With Other Zone Operators Document Everything!!