Bonded warehousing by LSPcustoms

A bonded warehouse is normally a financial shadow administration of a physical inventory administration from an ERP or WMS. It are therefore mainly the traditional WMS vendors that offer this more complex functionality. As renowned WMS vendor, LSP Solutions has a lot of knowledge of customs warehouse systems. This experience can be traced back from the mid-1990s and is gained at NYK, Fedex, MOL, Vos Logistics, Kraftverkehr Nagel, Distrilog, among others.

The degree of reliability offered by the total inventory administration (DMS + WMS/ERP), determines which form of monitoring will be carried out by the customs. As the total inventory administration offers more guarantees, more administrative monitoring and less physical monitoring will take place.

Many vendors dot not offer a bonded warehouse, but a statement system. There is a large difference between the two! A statement system is limited to performing the periodic statement (GPA) and is an add-on to the WMS or ERP system. It assumes that the WMS or ERP system keeps track of the difference between warehouse and free stock (T1/T2).

Often, various solutions are used in the WMS or ERP system such as, for example, the inclusion of the warehouse stock status as attribute on the lot (charge) or on the pallet (HU) and sometimes another article number is created for warehouse stock or warehouse goods are stored in a different administrative and/or physical warehouse. Consequences are a lot of manual work, limited flexibility and a greater risk of errors and less than optimal statements. Integration possibilities between, for example, NCTS and or other arrangements with the warehouse administration are also not possible.

LSPcustoms allows complete inventory administration, including the periodic statement. Therefore, custom work is generally no longer needed in the ERP system. LSPcustoms offers a complete bonded warehouse administration (type C/D/E) which can be integrated with your back-end application and can also be used as standalone.

Full inventory registration 

At optimally address the absence of a warehouse status in a WMS or ERP system, the LSPcustoms bonded warehouse also allows the tracking of free inventory, in addition to warehouse inventory. No locations, pallet numbers or inventory status is tracked, as LSPcustoms is certainly not a replacement of the WM(S) module of the ERP!

Standalone use

Standalone warehouse processing can be implemented very quickly. A disadvantage is that a lot of duplicate data entry may need to be done with a risk of errors. This is especially interesting when processing small volumes or when phasing towards an integrated processing.

Integrated use

For integrated processing, the bonded warehouse contains various standard XML interfaces with which any WMS/ERP system can be linked. Naturally, LSPcustoms seamlessly connects to LSPwms. 

The integration with a WMS or ERP system ensures that the inventory in both systems can automatically be compared every day and that all relevant transactions are communicated directly with the bonded warehouse. A notification is shown when the numbers do not match. This automatic check is one of the conditions of the AEO guidelines. This means there is a fool proof process for customs clearance, with the advantage that the customs will perform inspections less frequently.

Inventory comparison

There is an inventory check notification. This is intended to compare the inventory status of the ERP/WMS and the bonded warehouse system. The notification can be initiated from the ERP/WMS. It could be launched daily, but also incidentally. The ERP/WMS shows an EDI notification with the inventory status and then starts processing the notification in the bonded warehousing system. The ERP/WMS inventory status is compared with the inventory status of the bonded warehouse system, after which a list of differences can be mailed. The condition is that all input and results are closed.

Item Master Data

With this interface, item master data from the ERP/WMS can be automatically forwarded to LSPcustoms. Often this involves article basic data such as article number, description, inventory unit, product code etc.

Interchangeability of goods

The settings of the bonded warehouse can stipulate that the specific inventory characteristics should be recorded at goods receipt. In addition to the mandatory imposition reference and item number, the batch number and/or quality can also be used. This ensures, for example, that the ERP/WMS tracks lot registration but the warehousing system does not. This ensures optimal flexibility in the bonded warehouse to release shipments. If desired, the bonded warehouse system can closely follow the ERP/WMS.

Interchangeability of goods is very interesting but cannot simply be applied in all cases. It depends entirely on the situation. This should be coordinated with the customs authorities. Important questions are:
  • Are the same goods being delivered by different suppliers? Do they also supply goods from another country of origin? Can the country of origin be recognised on the packaging of the goods? Are the goods are identical?
  • In the warehouse, are only goods released for consumption in the EU and therefore not re-export? The country of origin is important for re-exporting. Mix-ups can lead to problems.

Monthly Reporting GPA

Thanks to the Automated Periodic Reporting of the bonded warehouse administration of LSPcustoms, it is easier than ever to communicate with the customs authorities and document the storage of customs goods. Statements can be fully automated and submitted to customs authorities on a monthly basis, which has many advantages:
  • The statements are no longer done manually and individually, but bundled into one monthly statement.
  • The payment of import duties is postponed until after the periodic statement. This saves at least one month!
  • The article master of repeatable goods only needs to be established once, after which it can be reused.
  • The built-in inspection items give direct notifications of errors. When sending the periodic statement will thus result in zero to none errors. The flexible system can be optimised for each customer.
bonded warehousing > bonded warehousing by LSP customs

Bonded warehousing schematics

The schematics below show the different steps which are taken when receiving or sending from a bonded warehouse to a WMS or ERP system. 

Goods-receipt

Goods shipping

Smart Picking

In assigning warehouse inventory, the financially optimal warehouse inventory can be selected. When exporting to an EU country, free inventory is always first selected, possibly supplemented with the customs items with the lowest customs valuation. When exporting to a customs destination (e.g. outside the EU), custom inventory with the highest customs value is selected first. Of course, always within the required characteristics of the indicated inventory. The greater the choice of inventory due to interchangeability of goods, the greater the possible financial gain. Applying the D type arrangement on a type E warehouse could also be very interesting. Everything only if agreed with the customs authorities and included in the permit.

Monthly Reporting AGS4 

Main differences of AGS 4 compared to the GPA:
  • Electronic statement instead of file on CD-Rom
  • Only statement , no inventory turnover, only tax bases, no rates
  • Check for accuracy, completeness and timeliness at the time of filing statement rather than afterwards
  • Active notification at time of entry/placement