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DB Schenker Peru provides global shippers with a single point of contact for their end-to-end supply chain operations.
Known for having a stable democratic political system, numerous natural resources, an expanding middle class, and a commitment to free trade, Peru has posted the highest growth rate—and lowest inflation rate—in Latin America over the last decade. These favorable conditions have created opportunities for shippers that want to do business in the country.
Like most countries, Peru also has strict rules that global shippers must follow when importing goods into the country or exporting shipments to other areas of the world. To add complexity, there are several Foreign Trade Agreements that need to be taken into consideration that can reduce ad valorem duties. Roughly 93% of imports into Peru are also subject to an 18% value added tax (VAT), as are domestically produced goods. In addition, an excise tax (ISC) is applied to certain products such as tobacco and alcoholic beverages.
These and other requirements can create challenges for global shippers that are trading in Peru, where DB Schenker has been offering a one-stop, consolidated customs approach for the last two years.
Jorge Roman, Customs Manager at Schenker Peru, said the logistics provider formed the division in response to customer demand for a single source of customs support and expertise. “Global shippers wanted to have just one provider handling their end-to-end supply chains,” said Roman.
Put simply, those shippers wanted to be able to interact with one logistics company, be informed about their shipment status, navigate the customs requirements, and have a seamless import or export experience. Pairing those demands with its strong logistics capabilities in the Peruvian marketplace, DB Schenker decided to form a dedicated, in-country customs practice.
A Single Point of Contact
Up until a few years ago, DB Schenker was outsourcing the work to a handful of customs brokers. “The approach worked, but it wasn’t like having our own operation,” said Roman, whose team then went about requesting authorization to start its own customs broker operation in 2017.
“At that point, we started letting clients know that we were going to be managing their customs processes in-house,” said Roman, “and that we’d no longer be working with third-party partners for that aspect of our business.” As part of that campaign, the logistics provider began integrating its custom broker’s license capabilities into its complete, commercial proposals for both new and existing customers.
“We let everyone know that we were now not only offering customs broker services, but we are also managing the delivery of the goods to warehouses, storage services, loading/unloading, and the consolidation of containers,” said Roman. “That was all done with the goal of providing a complete logistics solution and a single point of contact for shippers.”
Airport-to-Store Shelves in One Day
Today, DB Schenker Peru’s customs department manages a full scope of responsibilities for its global customers, which include a major fast-fashion chain that sells products worldwide. When that company approached the logistics provider for help orchestrating its import operations, it was specifically interested in signing on with a partner that could manage 6-7 shipments per week—from filing the customs declarations to handling the customs brokerage requirements to ensuring that the goods were released quickly (within 24 hours or less) for distribution to its stores.
“We have a day to handle the entire customs brokerage procedure for this customer,” said Roman, whose team has to be able to anticipate customs clearance times and file the appropriate customs declarations before the goods arrive in Peru. Working with local customs officers, DB Schenker established a business model that ensures that the garment manufacturer’s goods make the smooth transition from the air terminal to its stores within the desired timeframe, and without the need for warehousing or storage.
“Everything is sent right to the four shopping centers where the customers’ stores are located,” said Roman. “The goods arrive at midnight and the products are on the shelves, ready for customers to buy.”
More Transparency Ahead
Looking ahead, Roman says DB Schenker will continue to promote a capability that’s going to become more important over the next year or two, and that’s ensuring that shipments clear customs before those goods even enter the country.
“We already have this process in place, but most of the logistics providers haven’t caught up yet (i.e., because it’s not required yet),” Roman explained. “We’re going the extra mile to integrate this level of transparency into our supply chain.”