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FTA Implementation in South East Asia

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Synopsis

A large retailer in Southeast Asia was losing FTA savings because its products were passing through a non-FTA member hub where pick and pack operations were performed. They needed a solution to retain these savings, which were significant.

Customer Overview
  • Overview: A leading retailer in South East Asia and exclusive distributor of well-known sports apparel, shoes, & accessories brand
  • Vertical/Commodity: Retail/Apparel, footwear and accessories
  • Services: Regional distribution center for South East Asia origins
  • Volume: Annual throughput: 3,600,000 pieces; Storage capacity: 1,200 cbm
Challenges
  • Brand operates Hong Kong hub as consolidation center for South East Asia origins
  • Distributor buys from Hong Kong hub thus not applicable for FTA savings for shipments to South East Asia destinations
  • Warehouse configuration is floor stack with multiple SKU stored in one pallet
Apl Logistics Solutions
  • Solution is to setup an RDC in Singapore and bypass Hong Kong hub
  • Equip Singapore customs team with regulatory expertise and systems solutions to generate back-to-back Certificates of Origin (Form D) which are feasible in Singapore
  • Provide training to origin teams to conduct document validation to ensure acceptability of first leg Form D and second leg back-to-back Form D
Benefits
  • Optimized Asia distribution network
  • Duty savings from FTA application amounting to, on average, $20,000 per shipment
  • Additional fees generated from vendor referral program at origin priced at US$30 per document set

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