Importers Should Balance Risk, Cost When Considering MPF Savings, Flexport Says
Importers should be careful when combining several goods into a single shipment, which can save them money in fees but also present some complications, Flexport executives said during an Aug. 2 webinar hosted by the company.
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The merchandise processing fee is currently capped at $538.40 per shipment, which means combining goods into single shipments can provide significant savings to importers, said Andrew Phillips, a manager at Flexport. "Realistically, the savings that you could see ... can be hundreds of thousands of dollars, if not millions of dollars" annually, he said.
However, if a single product is flagged by CBP for a hold, the entire combined entry could be held as well, he said. The "complicated risk" is that there is a potential for everything being held "and then you having to pay storage," he said.
Phillips also said it may be difficult for brokers to handle situations in which one part of a consolidated shipment is notified to the broker before arrival and another the day-of or after. "Planning is needed to implement an MPF savings program, which can make it hard for airtight entries," he said, "but not impossible. It's something that I've seen successfully implemented."
For a successful MPF savings program, brokers need to be able to see upstream as much as possible. "As with everything in the world of customs, the further upstream [brokers] have visibility, the better off we're going to be," said Courtney Ozgunay, global customs director at Flexport. She said having more visibility ensures that brokers can prepare complex consolidations before they arrive. With more upstream information, brokers will know, for example, that entries are coming in on the same vessel or all filed at the same port and can submit them in one unified entry to CBP, she said.
For companies considering an MPF savings program, Phillips advised avoiding grouping entries with different risks. "If you're importing flour from Colombia, maybe don't group those imports with T-shirts," he said. While brokers can, and sometimes do, successfully get conditional release of some held goods within a tied-up shipment, importers should not count on that possibility. "It really depends on the Customs agent in charge," Phillips said.
Phillips also advised keeping a limit on the number of containers grouped together. "You can still have savings if you just group two or three products together. The savings aren't as much, but you did mitigate some of the risk," he said.