Tools for Managing HS Classification and Landed Costs
The cost structure and the HS classification system involved in global trade are highly complex and often intimidating. The landed costs of products that are transported over international borders is basically the price including the cost of the goods, the insurance and transportation to the particular place they are destined for, according to the Financial Times Lexicon. HS Codes consist of six digits that are used for identifying and classifying imported and exported goods for the purpose of compiling trade statistics and determining customs tariffs, according to the Business Dictionary. Fortunately there are various tools that make it easier to navigate these complex systems of codes and cost calculations involved in international trading.
There is no avoiding the system of hs code if you’re involved with global trade, whether you’re a customs broker, logistics provider, government professional, importer or exporter. HS classification is short for the Harmonized System, which got the name because the first six digits of every number are universal and no country can change them for the purpose of their own customs system. It divides goods into about 5,000 groups and sub-groups, and it is currently being used in most countries just as it has been since January 1, 1989. The United States tariff system, however, is a modified form that employs a ten-digit code that expands on the original six digits.
In the 20 years since the Harmonized System became the international standard for global trade, expert software systems have been developed that automate the classification process. Such software programs make instant and error-free Harmonized System classification possible for customs raters, customer service representatives and release clerks, and many other professionals in government and commercial organizations. Now routine classifications and calculations of landed costs can be performed by clerical staff, which gives the more skilled personnel time to perform activities that add value and generate revenue.
With so many complications involved with HS classification and global trading cost structures, it’s hard to imagine a time when people navigated these tricky aspects of global trade manually.