Case study: Globco and Prévost – a winning partnership!

Navigating the complex landscape of international freight and logistics is a complex challenge, especially when dealing with custom transactions on a massive scale and looking to reduce unnecessary costs associated with overpaying Canadian customs duties.

This was precisely the issue that Prevost, a subsidiary of the Volvo Buses division of the Volvo Group and manufacturer of touring coaches and bus shells for high-end motorhomes, was struggling to overcome.

Prevost, with its extensive supply chain spanning across the globe, was concerned about the skyrocketing Canadian customs duties it was paying for importing components for its products. Based on regulations stipulated by the Canadian Government, importing companies have between one and four years to request adjustments and receive refunds for customs duties that are unjustly paid.

However, the scale of Prevost’s customs transactions and the complexities of the customs duties regulations associated with each posed significant challenges: the intricacies of various tariffs, taxes, and duties, the type of goods, and their origin-destination pair. The task of verifying and managing the adjustments claims of thousands of customs transactions was formidable, to say the least.

Recognizing that it could not carry out the project alone, Prevost mandated Globco its expertise and capacity to help.

Globco stepped in to undertake a comprehensive analysis of Prevost’s ocean, air, truck, and courier customs transactions. The mission was clear: analyze the customs transactions, compare them to the rules set forth by the Canadian Customs Tariff, determine if Prevost had indeed been overpaying customs duties, and complete all the B2 forms required by the Canada Border Services Services Agency (CBSA), which are now known as the Commercial Accounting Declaration (CAD), under the CBSA’s Assessment and Revenue Management (CARM) initiative.

Leveraging its long-standing experience in Canadian and international tariffs and duties, Globco’s dedicated team audited nearly 10,000 customs transactions for ocean, air and truck shipments. The team also evaluated courier shipments worth over $2,500 CAD or more.

The process was extensive, with each transaction being scrutinized to identify any inconsistencies or errors in customs duty payments. Experts looked for the customs transactions for which customs duties had been paid. When duties were paid, they then assessed whether these payments were fair or whether Prevost could claim a refund for overpaid Canadian customs duties.

Globco found 665 customs declarations in which duties were needlessly paid, which resulted in 876 adjustment requests being created and sent to the CBSA. In fact, the team found transactions that were:

• Unconditionally duty-free under a tariff item of the Canadian Customs Tariff
• Actually, part of the free trade agreements Canada had with other countries
• Part of the CBSA’s Conditional Relief Tariff Items list
• Riddled with clerical errors, which generated unnecessary customs duties
• Not even applicable (ex.: the return of used and empty racks into Canada)

Thanks to the adept work of Globco’s customs specialists, the audit and claims management process, although intensive, was completed in less than three months. Their discoveries helped pave the way for Prevost to recover $1.5 million in overpaid customs duties.

In addition, Globco provided Prevost with a list of recommendations to better train staff on how to fill out customs paperwork and avoid the same pitfalls as before.

This case study highlights the importance of expert intervention when dealing with complex logistical tasks, such as verifying customs transactions. Prevost’s partnership with Globco led to a substantial financial correction, enabling the automotive giant to redirect those funds to other essential aspects of its operations.

This successful collaboration emphasizes how specialized know-how, like that offered by Globco, can help companies find untapped opportunities to save money and improve in-house logistics operations.