General Preferential Tariff Removal – Exemption

Back Ground:

As you may know, On January 1, 2015, approximately 72 countries are slated to be removed from the benefits of the General Preferential Tariff (GPT). In other words, goods imported into Canada – directly from one of these countries – will no longer benefit from reduced rates of duty under the GPT.  *see link below for full story

Examples of Countries:

China, Hong Kong, India, Singapore, South Korea, Thailand, Turkey.  The complete list  of countries is available in the link below.

What happens to goods “caught in the middle” of dates?

If your goods were in transit to Canada before January 1, 2015 they will still be entitled to the benefits of the GPT even though they arrive in Canada and are Customs cleared after January 1, 2015.

The “Date of Direct Shipment” (along with the usual origin criteria) will be used to determine GPT eligibility for these shipments.  The Date of Direct Shipment is defined as ‘the date that the goods began their continuous journey to Canada’.

How does this affect you and what do you need to do?

Cole will actively monitor imports for a period of time after January 1, 2015 to ensure that the benefits of the GPT are afforded to our clients in all cases where eligible.  Please contact the Cole Technical Services Representative on your account if you would like to discuss a specific shipment in this regard.

Links and Information:

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Know The Risks, International Trade & Transportation

Have you seen the TV commercial that asks “Why do we think – just because we can look it up…we can do it”?  It promotes the importance of using a real estate agent, and tells us why people should leave it to the professionals when it comes to buying or selling a house.  The same words of wisdom can apply to the international trade and transportation of commercial goods.

The international trade and transportation of commercial goods is a complex process that requires planning, thought and expertise.  Each different export country and destination country has its own unique rules and requirements that must be followed. A Customs and freight forwarding professional like Cole International can help you through the process.

Unfortunately, even when all necessary precautions have been taken upfront, and you’ve hired a professional, there are still things beyond anyone’s control that can affect the timeliness or condition of a shipment. We don’t want to scare you or deter you from placing or sending that next overseas order, we just think it’s important for you to know that delays can occur for a variety of reasons such as:

Beyond Control

  1. Strikes (carriers, ports, Customs, etc.)
  2. Capacity, balance or weight issues on vessel / aircraft
  3. Weather
  4. Quarantine issues
  5. Water level in seas, rivers or ports
  6. Inspection in a transit country
  7. Civil unrest in origin, transit or destination country

Within Control

  1. Lead-time of the order (was it placed with enough time to take into account unforeseen delays?)
  2. Unmarked or incorrectly marked packaging material for destination country
  3. Licence or permit issue (import or export license / permit is not present)
  4. Incorrect, incomplete or late documentation
  5. Shipping contract dispute (payment terms, Incoterms)
  6. Shipping weight of container exceeds weight limits in destination country

Cole International provides a full spectrum of customs brokerage and freight forwarding services that reduce the risks associated with importing and exporting goods and accelerates the transport of goods across international borders. With a broad base of experience and a strong network of offices strategically located across Canada and the USA, Cole International provides international coverage with personalized customer service.

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3D Printing in the Supply Chain

3D printing is another new and exciting technology that has tremendous potential for customized manufacturing and, by extension, supply chain management. Despite the name however, 3D printing has nothing to do with your office-jet printer.

In a comprehensive 2011 white paper from the MIT Center for Transportation & Logistics, 3D printing is described as an “additive manufacturing” (AM) technology. For example, think of a printer- style machine which allows you to upload a CAD (computer-aided-design) schematic of a machine part. The printer then sprays (i.e. “adds”) successive layers of material onto a tray, or other surface, until it builds the finished product, right in front of your eyes! Unlikely? Not at all. Printers, 3D CAD software and various AM raw materials are already commercially available. You Tube videos abound with examples of 3D printers being used to produce prototypes, samples and finished parts of an incredible variety of items, from toys to building materials to experimental human tissue.

At this stage, 3D printing is more an example of small-scale focused manufacturing than mass production, but the potential impact of this technology on the supply chain is significant. Consider how many industries ship sample products, MRO (maintenance, repair and operations) items, and critical parts to customers who have eliminated inventory to reduce inventory carrying costs. Each of these scenarios involves the traditional cost/service tradeoff of expedited transportation: “How fast can we get it, and at what cost?” Or worse, “What additional costs (or risks) are we incurring every hour we don’t have it?” Sounds simple, but anyone involved in sourcing critical products will tell you it can be a nightmare. The process of finding available supplier inventory, processing the order and arranging expedited transportation can be daunting. And that doesn’t include any of the other business-related functions that can derail the process, such as credit availability, documentation issues and export/import Customs formalities.

Now, drop a 3D printer into the mix and you get an idea of the potential. Expensive inventories of critical parts are replaced by less expensive inventories of additive raw materials. CAD designs are e-mailed to the customer who then prints the item on the spot, eliminating the need for expedited transportation. Cheaper, faster, more responsive. In other words, 3D printing may be seen as a tool for aligning supply chain strategy with the organization’s competitive strategy.

Still not convinced? Amazon, a company recognized as a best-in-class example when it comes to supply chain strategy, has launched a 3D printing store on its website, offering customers the opportunity to “print” a number of customized products, ranging from toys to jewelry. Amazon’s use of 3D printing combines the concepts of focused manufacturing and inventory postponement strategies, impacting everything in the supply chain from supplier relationships to customer service.

3D printing is novel, unique and innovative, much like RFID (radio frequency identification). And, like RFID, there are set up costs involved. But the ROI (return on investment) on 3D printing may be much faster than RFID. In fact, cites research from MIT that seemingly makes 3D printing “technically feasible at the individual or household level”. Granted, you probably won’t find a 3D printer at your local copy-store anytime soon, and 3D printing won’t eliminate the need for transportation. But as 3D printing becomes more accessible, it will have an impact, in some sectors, on logistics patterns, shifting finished goods transportation towards bulk material transportation, lowering customer costs and improving customer response.

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Cole Wins at Canadian International Trade Tribunal

It brings us great pleasure to announce that Cole International has won a major case at the Canadian International Trade Tribunal (CITT), representing Home Depot of Canada Ltd., in appealing the tariff classification for Martha Stewart Textile Fabric Drawer (textile boxes).  It all started in September 2011, as part of a larger project. Cole’s consulting group applied for a Tariff Classification Advance Ruling on the drawers. Concluding on April 28, 2014, the overall case was three years in the making incorporating many, many long hours of work.

In September 2011, the CBSA initially ruled in favor of the classification requested for the fabric drawers under tariff heading 4819 and duty free.  Unfortunately this was soon revoked due to the decision of another officer for the same goods. The irony of the story is that the same wording was used and the same customs office issued the second ruling.  As a result of that denial, we requested a review of this “new” Advance Ruling under CBSA’s Fairness Policy as conflicting rulings were issued for the same goods, from the same customs office. Subsequently, almost one year later, CBSA issued Home Depot a “Replacement Advance Ruling”, reclassifying the textile boxes back into 18% category.

An unfortunate turn of events for the case, but after exhausting all regular legislative avenues for appeal at the CBSA level we didn’t give up.  Determined that we were correct, we pushed forward and offered Home Depot our services at the CITT level.  They agreed with our opinion and engaged us to continue pursuit of a preferential status. On July 18, 2013 Cole filed a notice of appeal with the CITT.

Cole’s consulting team worked tirelessly researching and closing all potential gaps to ensure the success of this case. Creation of the written brief to support our argument at the CITT hearing took nearly 9 months to complete and consisted of over 300 pages of analysis, including references to similar rulings, other CITT cases, definitions and customs notices. The final decision was a success and took the boxes from HS Tariff Heading 6307 with a duty rate of 18% to HS Tariff Heading 4819 and a new duty free status.

If you feel that a product or existing ruling may be better classified elsewhere feel free to contact us and we will be glad to explore your options.

To see the full CITT decision click here:

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Laurie Turnbull wins CITT award

Presentation to take place at Canada Logistics Conference 2014 in Calgary

Read article.

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