The Uneasy Relationship between an Importer and Its Customhouse Broker—Part 2

John Goodrich | May 21, 2006 | Import Basics
Print this article:

The Uneasy Relationship between an Importer and Its Customhouse Broker - Part 2 | Shipping SolutionsI just finished reading the Broker’s Bill of Rights. Cry me a river, Mr. or Ms. Broker! You think your life is hard? Just walk 10 minutes in my shoes and you will be singing another song!

First of all, without my business you have no business. Got that? Your job is to support my import program, not the reverse.

Second, I have told you a million times how to classify my product, yet once again you let some greenhorn from the night crew do my customs entry and once again my laboratory incubator was classified as “other agricultural equipment for the poultry industry.”

I’m also beginning to suspect there is a direct career track from the fast food industry into brokerage. It seems that every time I look at my invoice from you, it has been super-sized with an extra order of fries. If you want to get paid on time, please audit your invoices before they leave your office. I expect your bills to reflect the fee structure we agreed upon.

(Audible breath followed by a sigh)

Sorry, sorry, sorry, but I am a bit stressed. We just got a call from customs informing us we are scheduled for a Focused Assessment. It seems that all of the post entry amendment work we have done because of your company’s clerical mistakes has finally triggered an audit. I’ve told my boss we should get legal counsel ASAP, but he thinks I should be able to manage the process by myself.

The underlying issue is that budgets were just approved two weeks ago, and I learned the VP eliminated the line item for legal fees along with the assistant she had promised me. My boss thinks this will be a cakewalk and thinks it will be easy like an IRS audit. He doesn’t have a clue.

Then you dumped 150 invoices on me at the end of the year. Some of those invoices were nine months old! Do you know what I have to do to research this? Why can’t you bill within a week of performing the service? Do you know what this does to our accounting?

We already closed our year-end books, and here you come with an additional $250K in billings. My company’s controller is fuming because I didn’t accrue for the expense in the previous fiscal year. We might have to restate our earnings for the year. Who knows what the Sarbanes-Oxley compliance guy is going to say. You guys must be making a killing on my account if you can have such lax accounting controls and still stay in business!

Oh, what am I going to do about this Customs audit?

(Second audible breath followed by a deeper sigh)

Ok, Ok, Ok… I’m better now; I know it isn’t your entire fault, but I could use your help trying to figure this out.

By the way, I have been waiting six weeks to receive confirmation of the entry adjustments we talked about back in October. I have another list for you from November and December as well.

You know, we really have to come up with a solution to make sure you are using the classifications that are on the item master I gave you. I’m not seeing an improvement in the documentation either. About half of your invoices did not have a copy of the 7501 associated with them, and none of them included a copy of the entry itself.

And what’s this I am hearing about the ACE program? I understand I can now defer paying my duties until the 15th business day following the month of importation. Why don’t I learn things like this from you? You’re my broker, shouldn’t you be watching out for my best interests? Do you know what this could do for our cash flow?

Speaking of best interests. Did you know your national sales person cornered my VP at the national widget conference and tried to sell her on your European services? You know very well why you lost that business and what you will have to do to earn it back. I did not take that business away gladly. Finding a backup during peak season because of your company’s service failure caused me a tremendous amount of heartache.

I know my VP will eventually back me up, but because of you I now owe her a cost-benefit analysis, which will take me two hours I don’t have. Thank you very much for being my partner.

If you want to be treated as a professional I expect the same treatment from you. Please respect my time and the resources of our company. This type of backdoor sales approach tells me your company is more concerned with short-term revenue than a solid long-term business relationship.

Which leads us to the issue of keeping appointments. I have a standing 8:30 a.m. phone call with your entry team. They have not been available at that time once this week. As a result we have had to reschedule. I’m getting the impression my business isn’t important to you.

(Whimper, faint sound of cracking knuckles.)

You know I need you to understand that our company takes compliance very seriously, but we are at a breaking point. We are in the widget business not in the business of customs compliance. I invited you and your management into our facility three months ago to understand how our business is run and to suggest ways we could improve our communication with you and raise our level of regulatory compliance.

Since that meeting your local sales personality has been in three times, but without any suggestions. S/He knows all about my family and my personal interests but there is no substance. I’m actually prepared to pay your company more money, but I need tangible solutions.

Furthermore, Mr. or Ms. Broker, I need you to tell me when my program is not going well. Please don’t hide bad news from me. I finally got access to ACE and looked at the history of my entries. I was stunned to discover that 27 entries were rejected last month. After a little research I discovered you had a training issue with a new employee. I should not have had to figure that out on my own.

I can’t promise I will be pleased when you share bad news with me, but I can promise I will be less displeased than when you hide it from me. You will also buy a tremendous amount of goodwill with me if you agree to pay for fees that clearly resulted from your mistakes. This is, after all, why your company carries errors and omissions insurance.

Similarly, I expect you to contact the local customs officials when an entry has not cleared within a reasonable amount of time. Sure the specialist might be harried, impatient and perhaps a bit abrupt. I’m sure they don’t mean it. It seems your staff is afraid to talk to them. It is your job to represent my company with customs and to use the tariff and regulations to my advantage. Please do so.

Finally, when you talk to me would your please make an attempt to speak English. AES, ACE, CES, IT, ID, CBP, C-TPAT, FAP, ACT, HTS, IPR, CROSS, AMS, ADD, CVD, FAST, CSI. I am choking on alphabet soup!

I’ve done a tremendous amount of work to help you understand our widget language. Please translate this regulatory babble for me and explain why it is important for me to comply in simple, clear, direct and unambiguous language.

I think, Mr. or Ms. Broker, if you would just walk 10 minutes in my shoes you would take a different approach and together we could improve the Customs compliance program for my company.

Author interjects:

I think we get the point that all may not be well in the relationship between the importer and the broker. The final installment of this series will take a look at the assumptions brokers and importers make about each other and explore some tactical solutions for improving the working relationship between the two parties.

This article was first published in May 2006 and has been updated to include current information, links and formatting.

New Call-to-action