Simon Shore, EMEA Project Group Leader, RedPrairie talks us through who can benefit from taking the bonded warehouse initiative and what the companys DLx DutyMaster solution can do to support organisations eager to reap the rewards of putting cost to the back of the supply chain.
Q: What types of organisations could benefit from using bonded warehouses?
A: All types of business can benefit from using a bonded warehouse-from varied sectors such as the drinks industry, retailers, pharmaceuticals, automotive and 3PL.
Q: Please explain the tax/C&E incentives, deferred payment, etc.
A: Most companies do not sell their goods within four weeks of receiving stock into their warehouse. This means that they will have paid the Duty and VAT up front on all of their stock, which is now classed as "Duty Paid". This is the money that they could have legally avoided paying for a considerably longer period of time.
Through bonded warehousing all of the stock in your warehouse can be classed as "Duty suspended", thus avoiding this advance Duty Payment on goods which may not have been sold yet and will reside in stock for months.
300 cases of spirits at 37.5%
The Excise Duty at 19.56 per litre of alcohol would be 18,000
The VAT would be approximately 4000
Total duty cost of 22,000
Therefore, 15 monthly orders of this quantity results in over 330,000 of duties per month.
Two month average stock turnaround would save you over 660,000 tied up in stock holding.
Q: How does RedPrairie help automate the process?
A: RedPrairie DLx DutyMaster simplifies and automates the day to day complexities of handling bonded goods, ensuring efficient compliance with HM Customs & Excise legislation, with a full suite of automatic daily and monthly reports relevant to a bonded operation. Stock accounts (rotations) are held for all bonded stock and are managed according to the strict regulations of HM C&E. Rotation history is fully maintained, reflecting all movement of stock.
DLx DutyMaster maintains master files for all significant Customs & Excise detail. Internal validation rules ensure that sensitive data is checked before use. A master file audit log records all changes to this data. Every change is time stamped and identifies the operator. DLx DutyMaster's audit reporting facility gives users a high level of flexibility in analysing this audit data and movements can be traced easily from any source.
Q: Whos using it now?
A: Over 100 companies enjoy significant business benefits from using our solutions. These include:
Kerry Logistics (UK) Ltd
Independent Distillers (UK) Ltd
BAP Transport Ltd
Nippon Express (UK) Ltd
Q: What kinds of benefits are these customers realising?
A: The benefits have a very positive impact to their businesses, such as
Significant financial benefits
Faster clearance at port
Reduced administration costs
Accurate C&E documentation
Timely C&E documentation
Winning new contracts by appealing to a wider audience by offering Bonded capability.