Automotive Classification | 2024 ZIM Final

Corrected misclassifications in heavy equipment parts.

J Company

2023

Automotive

Frequent misclassification of heavy equipment parts caused increased duties and customs delays for J Company. Standardized procedures and automation tools addressed the issue, reducing costs and ensuring compliance effectively.

Analysis

Inconsistent classification methods caused frequent errors and delays.

An analysis showed that over 40% of imported parts were incorrectly classified under higher-duty HS codes. Inadequate product descriptions and the absence of a centralized classification system contributed to these errors. Additionally, manual processes increased the risk of human error.

Challenge

Frequent misclassifications of parts resulted in higher duties and customs delays.

J Company encountered recurring issues with misclassification of imported heavy equipment parts, resulting in higher duty payments and customs delays. The company lacked a centralized system for managing tariff classifications, leading to inconsistencies and financial losses.

Solution

Standardized classification procedures and automation tools resolved errors.

An automated HS code classification system was implemented, standardizing the process for all imported parts. Detailed templates for product descriptions were introduced to improve accuracy. Staff training programs were conducted to align the team with updated classification procedures and regulations.

Maintance

Automated systems and regular reviews maintained classification accuracy.

Quarterly reviews of the classification process were introduced to ensure continued compliance. The automated system was regularly updated to reflect changes in customs regulations. Over two years, J Company achieved significant cost savings and improved operational efficiency through accurate classifications and reduced customs delays.