Reducing Import Duties & Start Saving: Duty Deduction Program

With rising supply chain costs, it has become more common for businesses that import goods to explore new ways to minimize unnecessary spending and improve profitability. One area of opportunity is reducing the duty paid on transportation costs. Did you know there is a range of charges possibly built into the cost of the goods and commercial invoice price that may actually be eligible for consideration and reducing the amount of duty paid on those imported goods? Century understands the importance of combatting inflating costs and in this publication, we delve into the strategy we can implement for your supply chain to help you immediately realize a significant amount of savings.

The Basics of Duty Deduction

U.S. Customs and Border Protection (USCBP) allows the deduction of certain costs and expenses incurred for the transportation and import of your international shipments when submitting your customs entry, which can reduce your overall duty spend. American importers are required by the USCBP to only assess the Transaction Value of their imported goods, which is defined as “the price actually paid or payable for the merchandise when sold for exportation to the United States”. This means that with documentary proof of actual costs, “origin charges” incurred for transportation and transportation-related services, are deductible from the Transaction Value declared on the U.S. customs entry.

While the actual filings of import duties are subject to the review and acceptance of USCBP and each customer will need to make their own determination, here are some examples of origin logistics costs for which you may be unnecessarily paying import duties:

Century Solutions & Benefits

The first step to reducing your overall freight spend is to identify the duty-deductible fees that you are currently paying. At Century, our set of standardized origin charge codes, descriptions, and exchange rates in VMS® will enable your teams to easily determine the relevant charges in your shipments based on these pre-defined categories. In addition to the origin fees which are entered by our local operations teams, we can also allow vendors to declare other transportation costs such as inland trucking from factory to port or CFS, thus ensuring you get full visibility and can utilize this information for your duty deduction.

Century offers a wide range of solutions that can be tailored to your unique business requirements, including:

• e-Docs in VMS® – Our VMS® e-Docs Module is a cloud-based platform that allows your suppliers to create Commercial Invoices and Packing Lists using supplier and customer verified data in VMS®. The vendor charges will be clearly listed on your Commercial Invoices and deducted from your overall cost of goods.

• Customized Reporting – We can provide you with a customized reporting at PO or item level with duty-deductible values calculated applied per PO, item, or quantity.

• EDI Connectivity & Transmission – We can establish EDI connectivity with your customs brokers or third-party providers to streamline the sharing of duty deduction data. Alternatively, we can also send the deduction origin logistics costs and vendor charges in the document set to your brokers.

Getting control of your import duties can help your business avoid the unnecessary costs you may be currently paying and save you a bundle. Join other importers in our customizable Duty Deduction program to move freight smarter, cheaper, and more efficiently!