Insights Newsletter – May 2023
Facilitating Visibility to DDP Shipments In 2023
One of the biggest pain points for the many customers who buy goods through various terms of sale is how to get visibility to their cargo purchased under Destination Duty Paid (DDP) Incoterms. For these shipments, the vendor (seller) assumes all responsibility for the goods until they reach their destination. While there are advantages to this, one key disadvantage is that buyers typically lack shipment visibility until it actually lands and clears customs. This lack of visibility causes issues for not only the buyers receiving network but also in the sellers ability to return equipment to the ocean carriers creating Demurrage and Detention bills.
To solve this problem for our customers, we leverage our years of industry experience and the flexibility of the Infor Nexus platform to offer three distinct solutions with varying levels of detail but all providing critical upstream visibility to keep their supply chain fluid.
Facilitating visibility to DDP shipments not only enables our clients to see and more effectively manage these shipments, but it highlights these shipments as cost savings opportunities and provides a solid foundation to convert terms of sale to FOB and FCA allowing for greater control.
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ACS has worked with many customers on converting their terms of sale from DDP to Free on Board (FOB). The transition plan from DDP to FOB, and ultimately Free Carrier, (FCA) is accomplished through data collection and best in class analytics. ACS’s terms of sale conversion programs are structured to provide our customers with the most comprehensive set of data (learning, trend analysis, vendor behavior, costs, opportunities) to help make the best decisions possible.
DDP
ACS brings in Vendor engagement and compliance as well as visibility to vendor locations, shipping and vendor patterns, and origin costs. Data collection and analysis within Infor Nexus provides the basis for conversion analysis.
DDP to FOB
FOB programs bring into play our full purchase order, vendor, carrier, and documentation management. Vendor SOP rules are imbedded in the system and exceptions are managed. Connectivity with carriers/forwarders, brokers, dray companies, and domestic partners is established.
FOB to FCA
FCA programs allow the customer to isolate and remove all origin costs not directly associated with the cost of manufacturing from each item’s first cost. Customers with dutiable or tariff-based items can significantly reduce their potential import cost liability.
“Prior to working with ACS, ATD’s inbound shipment visibility was relatively limited. ACS has helped create numerous solutions for ATD to support our global supply chain initiatives, including technology, origin cargo management, exception management, and more. The service and support ATD receive allows us to go after numerous supply chain efficiencies and achieve cost-savings initiatives…ACS supports ATD’s international supply chain through a vendor management program encompassing both FOB and DDP vendors contained under a single platform. “
Enhancements that Deliver Value
For more information how ACS can help you gain visibility with your DDP shipments, please contact ACS
