On our first discovery call with the client, we found out that the client had tried purchasing IT infrastructure and telephony from an in-market VAR. But when they were told that the SKUs they wanted wouldn’t be available for several months, they started exploring other solutions.
Naturally, they thought of purchasing the equipment in the U.S., where it was available, and shipping it directly to Sao Paulo with FedEx. Unbeknownst to them, importing into Brazil is more than just a logistical problem. Like many markets in the world, there are also compliance and international trade concerns when importing internationally. So, when their equip-ment arrived in Brazil, they were told they needed a company that could do the compliance work and act as the “Importer of Record,” and the equipment was sent back to them.
And although they had a business entity in Sao Paulo, they were not capable of acting as the “Importer of Record”, which is what led them to ask FGX for help. In our discovery call, we also found that:
→ The equipment needed to be on-site within a month’s time. Their engineers were scheduled to fly down to setup the office’s infrastructure and end-user tech for the office’s grand opening.
→ The equipment needed to be transferred to their local entity’s books. Since they had an office in Brazil, they needed FGX to have the assets transferred to them after importation.
We collected the boxes of switches, servers, and telephony from the client’s office in NYC, and found that they were loose and slightly damaged from their prior expedition to Brazil. So, when the shipment arrived back at our warehouse, we had the boxes palletized for safe-transit and also used additional physical security measures* to prepare the shipment (the specifics we can’t disclose due to it being internal IP.)
Even though the packaging and security measures can be seen as a “small” detail in the grand scheme of shipping internationally, they are in fact, very important. Brazil suffers from high levels of theft and corruption, and if the equipment is exposed or not properly packaged, the risk level increases drastically.
Prior to exporting the shipment, FGX had to prepare all the customs documentation and pre-funded the duties and taxes so the shipment would clear as quickly as possible when it arrived in Brazil. Once the paperwork was completed, we arranged for direct air-freight into GRU airport.
The problem many companies run into when trying to ship by themselves into a foreign country is that they use some sort of courier service (UPS, DHL, FedEx.) Courier services, however, are only used for samples or personal shipments and any commercial shipment must be sent via cargo so the shipment can undergo a “formal customs clearance.”
For all our shipments, we use direct air-freight so we can perform a formal customs clearance on our imports.
Formal customs clearance begins when a shipment arrives in the country. During customs clearance, an entity needs to take responsibility for harmonizing the H.S. Codes, paying the applicable duties & taxes, registering the shipment, etc., the list goes on, and this entity is called the Importer of Record.
Although the client had a business entity in Brazil, it was not RADAR registered, meaning it couldn’t import anything into the country, let alone IT equipment. Instead, FGX, having a RADAR registered entity, was able to act as the Importer of Record on their behalf and register the shipment into the Brazilian customs system.
Like many of the other customs systems in South America, Brazilian customs use a “lane” system to classify imports. There is a green lane, yellow lane, and red lane, green being the fastest and red the slowest.
Because FGX is a regular importer of specifically IT infrastructure and equipment, when we import IT under our business entity, we receive green lane 90% of the time.
For this shipment in particular, we received a green lane assignment and cleared the shipment in a week's time. After the shipment cleared customs, we delivered it to the local office in Sao Paulo the next day and transferred ownership of the equipment to them.
The deadline was beat by two weeks, giving the client two extra weeks to get their team on-site to manage the configuration and setup of their office.
“FGX really blew us away with this capability. They helped us feel confident in their process, and ultimately delivered far above our expectations.”