In this podcast Joshua Halpern interviews Bill Nelson, Global Account Executive with FedEx Trade Networks [Run time is 47:35]
[BN] The biggest issue for SMEs is that if you haven’t learned it on the job, there’s nowhere you would have learned it. So people are trying to figure it out as they go.
They don’t know where to look. They know what they know based on experience. They repeat what has worked, even though it may not be right.
When they have a product going internationally, they don’t know what HS codes are. They don’t know their importance, how the HS code will give them duty and tax information, so that when they’re talking to an international buyer, they can provide full information about what that transaction is going to look like through the customer process. Then handle that issue from a dollars and cents standpoint, so they can have a good buying experience.
Their customers don’t want two or three bills, they want one, and to understand what it’s going to cost them when they make the purchase.
Most of the customers I encounter who are new in the environment don’t understand yet all of the steps they should be taking. Therefore, they’re stumbling and bumbling along the way, working in a very dark room with very little light.
What I advise them to do is, first, my team can provide them some light, we can provide them some basic information that helps them start to build a cadre of knowledge. Afterwards, we’re still available to help them build on that knowledge, but they are only going to figure it out from experience.
We only listen so well. The rest of it has to come from bumps and bruises in the school of hard knocks.
However, that shouldn’t stop someone from doing it, because the barriers aren’t that big once you get some basics figured out. You have your shipping pricing, you know what you’re selling, and you know if you have any dominant restrictions going into the markets you’re working in.
Once you have that, then you’ll see little things along the way to fine tune. The challenge is that each new market poses its own issues to address. Taking on too many markets at one time is so broad, that it can stop someone in their tracks because they’re not sure where to go next. They’re not focused on solving one problem, they have four of them facing them at one time.
[JH] Do you suggest companies go to one or two markets first?
[BN] Yes. I suggest going into Canada first, since Canada is our largest trading partner, and we’ve smoothed out all these issues for the most part. If they encounter a problem in Canada, they’re probably going to encounter it elsewhere, so get that figured out.
If they come to my team, we can help them get the classification, get duty and tax, and get details on restrictions they’ll face.
Take the 80/20 rule is very important. 80% of your volume or revenue is going to some from 20% of your products, so focus on those 20% that are going to make you money.
Get those settled, them from there branch out once the experience starts to set in and you understand your market, your competitors, customers buying, and you’re able to handle any returns. If you’re in the e-commerce space, you’re the retailer.
[JH] You say if they come to your team, you can help them with XYZ. What can you tell them now that’s a common denominator?
[BN] The first thing I would do is google my product.
The way that harmonized tariffs work is that the first 6 digits are the same around the world, the number and definition. The each country adds 2 or 4 digits to that number to make it their own. Then they attach additional information, like restricted duties and tax, so everything else grows from that number.
If they don’t know what the code is for the country they’re going into, they need to get an idea of what that looks like first. They can google that.
The other thing that gets frustrating is that common sense and customs don’t align.
You can go out and act on what seems like common sense, but if you don’t understand that there are 98 chapters in the U.S. tariff, and you think you’ve found something in chapter 10 but in fact it exists in chapter 85, or you don’t know all of the variations of the chapters, there’s no way that you’re going to find the right one without any help.
That’s where a lot of challenges come in. Customers do the best they can. Problem is that they don’t have enough information about the whole environment. The environment is tough, too. Only 5-10% pass the customs brokers test. And there’s nowhere else to go to learn this. You have to figure it out as you go. But if you get help as you go, it reduces the bumps so you can be more successful and experience less frustration.
[JH] If I call your team for help and I’m a small business owner with a small budget, that’s probably going to cost me money. What do you recommend?
[BN] There are two schools of thought.
One, you can ship it, experience the problems and figure it out, but you’re probably going to spend more than I would charge anyway just in bandwidth and frustration, and just not getting your core business handled.
If you’re spending another two hours a night and missing a family event, is that worth the time, compared to just letting me do it and know it’s right?
In many cases, you don’t want to disappoint a new buyer. Information about bad experiences travels faster than about good experiences.
If you’re going into Canada first then maybe the EU, then you’re branching out incrementally, in a deliberate kind of way, which gives you a chance to control it. If something isn’t right in that case, it’s not so big that you have to stop the presses and come back to fix it. You can incrementally work with it to improve the process. Get some help, fix it, and keep the product moving so you’re making money and selling in those other markets.
95% of consumers are beyond our borders. Why are you excluding that just because it’s a little frustrating?
[JH] What self-service tools does Fedex offer a client?
[BN] We have World Tariff, which is an online database. We’ve taken Vietnamese, Chinese, Italian, Indian, German, we’ve taken all those import tariffs, translated them all to English, we’ve simplified the formats and we’ve published them. That’s available online on www.fedex.com and you search ‘world tariff’.
95% of consumers are beyond our borders. Why are you excluding that just because it’s a little frustrating?
A customer can buy a subscription. I wouldn’t recommend it, a little pricey, but they can look things up for USD 7 each time. Look up their product so they can get some high quality information.
They can also sign up for the U.S. tariffs, which are complimentary on the site. So they can enjoy all of the U.S. offering, if you’re doing imports, but at least it gives you a basis to work from, in terms of what’s going on with tariffs around the world looking at the U.S. because it’s a representative sample.
[JH] A lot of companies come to me saying ‘Fedex costs a lot of money, is there a cheaper solution?’ What is your answer to that?
[BN] There are some things you don’t want at too much of a discount or for free. Do you really want me doing your taxes for free?
It’s a worth endeavor to have someone who’s professional do it. You can ask us questions, get answers to things as you go. It gives you a ready source of information.
I’m finding that customers who experience my consultants and my team, they end up coming back again and again because it’s a place they can trust, and also get the answer then move on. It’s one last thing they have to fight with in their operation. They can get an answer and make money with it.
[JH] Let’s talk about your team, what it does specifically and the price points.
[BN] My team is called Trade Services. Within Trade Services I have 3 divisions.
The first division is our trade customs advisors. These are customs brokers. They do onsite visits as well as work remotely. We come in to do customer evaluations, operations audits on all customs processes as if customs were to walk in your door and take a look. We can develop manuals and procedures for the customer and prepare the books if customs officials were ever to come to them.
They also do classifications on higher level issues, things that are more complex. We have someone who’s a Ph.D in chemistry, we felt it was easier to teach a chemist to classify than a classifier chemistry.
A lot of the terminology requires specialists to fully comprehend, so we need people with that level of education to really round out what we do. This group also includes tax attorneys.
We can go onsite, we can do classification or compliance training.
The second group is World Tariff. We have the database and a team of 12 employees with language skills keeping up with local issues in Arabic countries, in Japanese, in Chinese… They update the World Tariff site to address emerging issues that have been published by those governments.
The third team is our E-Commerce Classification Team. They do roughly 2-4 million classifications each year. They deal with companies which come in with huge databases, like Amazon or Walmart. It gives the customer the necessary HS numbers so they can go out, sell the product, get the duty and tax information in their shopping cart, give the customer the cost, all in a quick automated format.
This enhances the customer experience, one bill, charge the credit card, send it out, duty paid, then the customer can get the product overseas without a lot of frustration or hassles.
We are a separate entity within Fedex.
We do everything on contracts which have non-disclosure. So we don’t disclose who we are doing business with. That gives the customer assurance that we’re not sharing their secrets with the world.
The work we do on trade advisory is typically USD 250 per hour.
If we go in to do global research, looking for licensing and restrictions, recently we had a customer who wanted to ship USD 6 million dollars worth of donated human breast milk that was fortified for babies. They needed to make sure it was properly classified and wasn’t going to be held by customs, because then it would go bad and the USD 6 million would be lost. We helped them obtain the proper classification, the right licenses, and a letter that they forwarded to the host government to let them know this is coming with all the documentation. That way when the customs event occurred, it was no surprise to anybody and it just sailed through and back into refrigeration.
[JH] USD 6 million dollars of donated breast milk. Which country received this?
[BN] Netherlands. That was their distribution point for the EU.
[JH] Ok. So you have British babies drinking American breast milk.
[JH] Which is a reverse of the whole colonization. That’s fascinating. I cannot believe that it wasn’t an issue with customs.
[BN] That’s what we did, we got ahead of it, with documentation, a letter, things written in ‘customs-ese.’ It wasn’t common sense business, because common sense business might not apply to the customs mind. That’s the challenge. We helped them do that so they could successfully accomplish the order.
[JH] I’m just curious about when that inventory runs out. Do the British babies go to the airport and wait for the American breast milk? Moving from breast milk, let’s talk about Fedex cross-border and their purchase of Bongo. Does that disrupt what you’re doing or is it complementary?
[BN] I see it as completely complementary.
The purchase is one that removes all the responsibility from the customer. Someone who might be doing a little bit of e-commerce, they don’t want to shut off the faucet but they don’t want to deal with it either.
They can hand it off to cross-border, it’s domestic move, and cross-border handles it from there.
What we do is empower the customer who wants to keep control of their international market and profits. I’m going to help them make all of the efforts that cross-border would be doing so they own it. All of the deliverables that we accomplish, they own. If they’ve got thin margins or good margins, they’re maintaining the margins after having engaged me. If they’re engaging cross-border, then they’re giving up an element of their margins because they’ve released the risk and a lot of the complication.
It’s a risk-reward thing, how much are you willing to take on?
There are some customers who want to give it away until they want to focus on it, but they don’t want to give away the growth. They’re still selling product. They may not be experiencing the same margins had they hung on to it, but they’re also not experiencing the same headaches.
[JH] Yeah. A lot of our companies are in that bucket. Does Fedex cross-border take over warehousing, fulfillment and consolidation in the U.S.?
[BN] Not that I know of.
Every order would be directly shipped from the Fedex customer to cross-border on-demand. That way they’re certainly meeting all of the currency issues of that product, that it’s exactly what was purchased.
[JH] In any of the Fedex services, if there’s an error in the process that causes increased tariffs, who takes liability?
[BN] In the cross-border world, it assumes that.
In our world, we’re going to look at the item, what was the classification, what were the duties and tax, then if there was something that went on that was not seen, what was that… was it a restriction? Was it a license that wasn’t identified? What was the reason for some kind of hang up that created some additional cost?
[JH] Ok. Let’s talk about NAFTA and how companies are dealing with the opportunities and challenges from an e-commerce perspective?
[BN] NAFTA is a mystery to most people.
It is a mystery because it has so many moving parts. If you don’t stop and nail it down, it’s confusing.
As I understand NAFTA, the rules of what makes a product NAFTA-eligible changes based on what the product is. So something that’s manufactured has one set of rules, things in apparel has a different set of rules.
The other thing about NAFTA, is that qualifying something for NAFTA, there could be 3 different methods. A primary, a secondary and a tertiary. Someone who’s working with it and knows the rules will try to apply the first one, if that doesn’t work they’ll try the second, if that doesn’t work they’ll go a third. Trying to get the item to qualify for NAFTA through the different elements that go on.
The other problem with NAFTA is that while it can be immensely profitable, it also takes annual administration.
If you’ve got a low duty on an item, it may not really pay to do NAFTA because of the additional work you have to do to get into the program, to make sure your product is qualified, and then annual administration.
The other problem with NAFTA is that while it can be immensely profitable, it also takes annual administration.
Then there’s a company I deal with in Phoenix, they save like USD 8 million on NAFTA. If the ROI is there, it may make sense. I think it makes sense to make the company aware that NAFTA is always a possibility, but it should be ruled in or ruled out so that they’ve made a deliberate business decision.
[JH] You talked about a company manufacturing in Korea.
[BN] It was an apparel company. They were buying fabric from Korea for their garments, doing the rest of the work in the U.S.They’ve also got a pretty dominant Canadian market.
If they’re not NAFTA-approved, as I understand the rules for apparel, if the fabric is not U.S. then it doesn’t qualify.
Now they’re paying 16% duty going into China on the labor they’ve applied in the U.S. They’re putting premium dollars into this manufacturing. The beauty of the operation is that they can control their inventory because they’re making it. They don’t have a lead time or a lag time between manufacturing and distribution. It can be manufactured and distributed immediately.
But if you’ve got a garment and its cost is USD 5, and USD 3.50 of that is U.S. labor, you’re paying 16% on U.S. labor into Canada. Where if you had made that garment overseas you’re still paying the same 16% but you might have had it for 2 bucks.
Made in the U.S. in this case, for this customer, is a detriment if my opinion. If they don’t instead source the fabric in the U.S., get full NAFTA qualification and save 80-90 cents on the garment, lower the cost and potentially increase their market share in Canada because they’ve got a lower priced item.
[JH] So you’re saying they should manufacture in China?
[BN] No. I’m saying that they should buy U.S. fabric and continue having it made in the U.S.
[JH] I see.
[BN] That way they’re not being charged the 16% Canada duty on the labor in the U.S. That 16% washed out because it went in duty-free as a NAFTA-qualified good if the fabric was bought in the U.S. from a U.S. manufacturer.
[JH] Can you give us an example of a company you’ve worked with recently, without naming them, and challenges they ran into?
[BN] A couple, actually.
Working with a drone manufacturer. We want to control our exports that may have any kind of industrial, military-type use. Do drones qualify in that? Do they need export licenses or not? What’s going to happen? What are the limits that they can work with and keep them from doing it?
This particular drone has a camera on it. If you change the camera to an infra-red camera then it immediately becomes militarized, so you now need a license to export that.
Or if they make any modifications to it. You think back to the most basic Honda when it came out in the 1970s, and what the most basic Honda looks like today, you look at the growth in size, scope and accessories that are on that car, that’s natural in about every industry we have. Something starts out basic and it grows in capacity.
If the drone is able to feedback to the operator altitude, air speed, direction, it’s militarized. Because now it can be flown out of sight.
Is a company aware of that? If they’re not, they’ve suddenly restricted whom they can sell it to just by adding features they thought would well the item better.
[JH] What if they don’t modify it until it’s shipped overseas and then it gets modified in-country?
[BN] The U.S. can’t control that. It would be outside their control.
But the other thing that comes into play, that they’ve got to pay attention to, is destination-control statements, which almost nobody seems to know about.
Imagine you’ve got an item going into the UAE that Iran wants and it gets trans-shipped there because UAE has no problem doing business with Iran. Or North Korea. You’ve just broken U.S. law. You didn’t know who your final recipient was. Like we have a no-fly list, we have a restricted party screening list.
When they make that purchase you’ve got to be reasonably assured that that’s the ultimate destination. It’s not a stopping off point for somewhere else.
There’s a New Zealand company that builds an airplane which use some U.S. parts, and it was seen in a parade in North Korea.
[JH] So the U.S. company can be liable even thought they don’t know whom the New Zealand company will sell to?
[BN] Potentially, yes.
Restricted party screening will help you understand if a particular destination has been put on notice. A company or an individual. It scans 37 different websites. If it says there’s some guy named Josh Halpern that’s on the list, is that you or not? If there is a Josh Halpern out there, but it’s not you, then it would give details or where that bad Josh is, so the person doing the shipping can determine that you’re not that individual, the shipment can go forward. That then protects the shipper from making sure that they’re not sending something to someone in disguise.
[JH] What is the difference between the consolidated screening list and the restricted screening list?
[BN] It’s the same thing.
We have a restricted screening list on www.fedex.com. We’ll do it one at a time. It’s not very industrial.
My team has one that we can do and it’s industrial. It’s an API. We made it with a customer and all of their information is being screened. I’m able to talk about the customer, it’s Otterbox which uses it [Note: Otterbox is a manufacturer of cases for smart phones and tablets]. They do a pre-screen on the item and then when they ship they do it again, just to make sure the person is clean.
And this is just a case. It’s not something of national importance, if you will.
[JH] That’s a good example. What would they be concerned about in terms of doing a restricted screening list?
[BN] Just to make sure, cause the iPhone is everywhere.
You can’t sell to an embargoed country. To North Korea, Chad, Cuba, Iran, Sudan…
[JH] How does Russia fit in this given the current situation?
[BN] Russia is still open but I’m sure that given the products that are going in, many are going to be screened or restricted.
[JH] That’s going to be great to see, all these Russians running around with broken iPhone screens.
[BN] The challenge with Russia is more Russia-induced than U.S.-induced.
They’ve got a lot more restrictions on U.S. products getting in than we’ve got restrictions on what they can send, from what I’ve seen.
[JH] That’s interesting because the common thought is that we’re restricting so much into Russia and Russia is upset about it.
[BN] We certainly would be restricting things like a digital rifle scope because it has night vision capacities. Or a drone. But there are other drones that go in. There are drones you can fly around in a hotel room and have fun with. Go pester your friends. Those aren’t going to be restricted. It doesn’t have the industrial level to be able to handle winds outside or whatever else. But if you have a drone like what Amazon is talking about, and wanting to fly packages, if it can carry a 5 lbs package, 5 lbs of explosives can do a lot of damage.
[JH] It sounds pretty dual use to me. You said you had other companies as examples…
[BN] Another example that’s similar, it’s a drone that goes in the water. Again, same issues, just in a different environment.
Another customer is one that does electronic skateboards. So now, I’m thinking about what are the rules for batteries, what are the rules of transit in Europe, for example cobblestone streets, is it allowed on the sidewalk? If it’s not, it won’t do well on the street, and someone using it is going to go on the sidewalk.
[JH] From FedEx’s perspective, if the person pays to ship it it’s fine, and from the seller’s perspective, if there’s someone willing to buy and ride it in France….
[BN] Granted, but I feel like there’s a responsibility. If we have awareness of a restriction, they’re coming to us to try to eliminate barriers in the customs regulatory world, they need to know.
[JH] That’s interesting. It’s a deeper dive in customer support.
[BN] Sure. We can do that. That World Tariff space that we have, where we have the editors and everything else, we had a customer who couldn’t get batteries into Saudi Arabia. I have an arabic speaker on that team. Went up to the Saudi site to find out about batteries. Came back and I was able to give the customer instructions about what needed to happen in English.
[JH] Pivoting a bit, I know you have your own passions, you have a patent…
[BN] Yeah I’m working on a bike modification. Since it’s not in I don’t talk about it.
[JH] Ok. I was curious, what your knowledge from a FedEx experience, has that improved your ability to implement on your idea?
[BN] Yes. It gives me an idea of whether I’m going to have a challenge or not. Where to go. Country of origin issues. Geopolitical. What am I going to do if I’m using China as a resource and China-U.S. relations go downhill, can I get it out of Taiwan?
Shipping lanes. South China Sea. Freedom of navigation. I’m aware of that stuff. It’s heightened my awareness of what’s happening and I can apply a different awareness to it.
[JH] My father is a bankruptcy lawyer and he’s so hyper aware of everything, that you run the risk of almost paralyzing yourself. From your knowledge of all these elements. What’s your message to all the startups that want to get overseas and start selling?
[BN] One of the elements that came into play and I didn’t expect to hear about, but it’s really true, if you’re dealing in an e-commerce space, it’s personal use. You bought a t-shirt with a fun logo, there’s very little restriction on that. There might be some restriction on the. But typically it’s no big deal.
If you had a retailer who wanted to buy 12 t-shirts to sell them, then you’re going wholesale. Now you have to worry about labelling issues and all sorts of other import restrictions on a wholesale B2B sale that didn’t occur in the e-commerce world because it’s personal use.
So if someone wants to get involved, I would say do the e-commerce play, keep it simple, get help, realize there’s a lot that you don’t know, and you don’t even know you don’t know. You’re only going to encounter it when it hits you in the face and you’re wondering what to do now.
If you can get some help… U.S. Commercial Service, FedEx… there are many resources out there. And then it takes baby steps. Crawl, walk, run, so that you’re up to speed. Don’t bite off too much.
The EU can be a great place to go because one set of rules applies pretty much to the 28 countries. That lets you get in gently. Don’t throw a bunch of dollars at it because you don’t know what you’re going to get back. Get there incrementally.
[JH] When you say e-commerce, you’re referring to B2C cross-border?
[JH] Can you talk about the advantages and disadvantages of selling to a distributor in-country versus going cross-border direct to consumer?
[BN] If you go direct to consumer, you’re the retailer. As a retailer, you’re dealing with returns, and the entire retail experience. Are you going to be Nordstrom? Or the closeout store that says you bought it, done? What’s the experience going to be?
50% of orders online are repeat orders.
If you’re not treating your customer right, you’re probably cutting off your nose to spite your face.
If you’re going into a distributor model you’re going wholesale, then the distributor is going to take care of all the local issues in that country. Or that region. That can be powerful. You’ve given up some of your margin. But they’ve taken up part of the responsibility.
50% of orders online are repeat orders.
However, now you’ve got to worry about labelling issues as a wholesaler into that country. That might be more effort because you have to do research and your product has to meet standards. Like the FDA. There might be these types of agencies in that country you have to qualify with for a wholesale transaction.
[JH] You don’t have to do that necessarily if you do B2C?
[BN] Correct. As long as it’s not something that’s restricted.
If you had some exotic leather boots or something, that restriction is going to be there regardless of how you sold it.
[JH] So in the case of cosmetics or food supplements, sometimes local FDA approvals don’t apply…
[BN] I doesn’t. But those can be difficult to classify. Some places have those ingredients broken down to the gram level. If you don’t know what you’re selling at the gram level to classify, that might be a barrier in itself. You’ve got to get some professional help to make sure that part of your business model is right.
Here’s the challenge. If you’ve got an item that has a restriction on it and you accidentally use the wrong code, you bypass the restriction and have now broken two sets of laws. A: you imported under the wrong number. B: you accidentally imported around the restriction and the documentation necessary for a proper entry.
If the duty of the restricted commodity is higher, you’ve just made a third error, because now you’re underpaying your duty. So not having the proper number can really compound the problem, if that item has any potential for restriction in the country you’re sending to.
You look at Israel and you think of Jewish law. Or if you’re going into one of the Arab states, then you’re dealing with Muslim law. All of those environments have restrictions and controls that the U.S. never thinks about.
[JH] If you’re going direct to consumer for individual use, then do they apply?
[BN] Yes, they can.
Viagra isn’t allowed in France. If you didn’t use the right number for Viagra and it went it, you’ve now violated French law. If choosing that number was a simple error, you’re still wrong. Unfortunately customs border protection in most countries, it’s like the IRS, you’re guilty until proven innocent.
When you make a mistake, they give you a way to clear it up.
At our U.S. Customs, they only have three levels of enforcement: negligence, gross negligence and fraud.
If they bring a charge against you, they’ll usually going for fraud and negotiate it back. Do they’re overcharging on a simple negligence. It gives them room to negotiate back.
I’m not saying that to scare people. I’m saying get the questions that you can see answered, so you minimize your risk. It also minimizes your learning curve.
Going back to the 80/20 rule, I’m not talking about the entire catalogue. It’s about those items that make money, or even maybe a subset of that, narrow that product line down and sell only the hottest sellers internationally. Until you can expand that and crawl, walk, run.
[JH] Let’s talk about returns. How do you deal with returns as a B2C e-commerce play?
[BN] Returns can be unique. They can be returns because they’re defective or broken. Or because it was the wrong size. Or I changed my mind.
Internationally, the duties and taxes still can apply.
If good have arrived on U.S. soil and duties and tax are paid on them, then that product, whether it was made in China or Uruguay, it doesn’t matter, and then left the U.S. after being consummable, then it can be returned for three years. This is under what’s called Chapter 98.
[JH] You’re saying if I make a product in the U.S., and at the point of exiting the U.S. it can be consumed, word, eaten, etc, when it goes out, if somebody returns it, within three years it does not get double-taxed on the return.
[BN] Right. The documentation needs to be handled.
If the item has low duty, you can avoid all of that and just pay duty and have it come back in.
Here’s the next challenge. Maybe you bought some jewelry for your wife.
[JH] I always do.
[BN] Good husband. So you’re in Australia and bought a piece of jewelry. You’re in the U.S., it breaks, and they have a liberal return process. You want to send it back. They don’t repair it, they just replace it with a new one. Should you pay duty on it?
In theory, yes. This is an absurd example but it magnifies the point. Imagine that was not jewelry but a car. You drove it for 30,000 miles then it had to be recalled. Instead of just fixing it, they replaced it. Should you pay duty on the car? You’ve used the car for 30,000 miles.
If you had a Rolex watch and it was fixed, the re-entry cost is the repair. Because the same watch is being returned. But if it’s a brand new watch… or if it’s a replacement of a used watch, then it has a different value. But people don’t see that coming on the returns. Sometimes they do it, get a double-taxation return and get frustrated.
It’s a complicated space.
[JH] That’s huge in terms of your decisions to manage your after-sales.
[BN] If it’s broken and you want to get it back, you’ve got transportation to get it back. It’d almost be better to destroy it, send them a new one and done.
[JH] What about duty draw back?
[BN] Say I have kids BMX bikes made in Taiwan and I bring them into the U.S. Then there’s a retailer in Canada who wants the bikes, so I sell them bikes. I pay duty on them in the U.S. but they never got consumed here. They left the U.S. territory and are now going to be consumed in Canada. I can ask for the duty back from the U.S. Government.
The transportation fees are lost but you can try to get the duty back.
Sometimes you hear about free trade zones. In an FTZ, it means it can come in and sit in bond, and I hadn’t paid anything on it, it hasn’t cleared customs to get into the U.S. It’s sitting in this magical place that’s got special rules. If that’s the case, I can send from the bonded zone, get it into Canada, pay duties there, without paying duties in the U.S.
[JH] De minimus. What’s your view on the future a possible future global de minimus?
[BN] What we’re hearing is that there are some de minimus that are going up, and some that are coming down.
It it’s not USD 100 or less, there’s not enough money to make the process pay off. But if you streamline the process, then there’s some profit to be gained on these smaller orders. Really it comes down to a cost-benefit analysis for individual countries on what they want to charge. If you’re getting 16% on USD100, that’s USD16, if it costs you USD20 to process it, it makes no sense.
[JH] Ok. Last couple of questions. What was the last think you bought online?
[BN] Sunglass lenses. Bausch & Lomb. Original lenses. Brown and polarized. Made in Canada. And they came in the mail.
[JH] Bill, I really want to thank you for taking the time to talk to us and be part of the Getting to Global series. I hope we can continue to discuss some of these issues.
If anyone wants to get in touch with you, how should they get in touch?
[BN] They can always send me an email at email@example.com. My specialty is dealing with the customs compliance world.
If you have general interests, the best thing to do is call 1-800-go fedex.
Or if you know who your local FedEx rep is, reach out to them. They have a wider array of things they do for FedEx than I do.
[JH] Thank you.
[BN] Thank you.
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