UNITED STATED - As fresh produce companies continue to try to strengthen the supply chain across North America, word has hit that one small move making a large impact is the use of the wrong HTS (Harmonized Tariff Schedule) codes for perishable products in particular.

The USDA continues to identify incorrect coding on various produce items, primarily through the Calexico, California; Nogales, Arizona; Savannah, Georgia; and Laredo, Texas, ports of entry, according to the Texas International Produce Association (TIPA), which sent out a plea to United States customs brokers and importers to take care in using the correct code. Dante Galeazzi, President and Chief Executive Officer for TIPA, helped detail why this issue is a key pain point.

"Inputting the wrong HTS codes creates many issues,” he pointed out. “First, it wreaks havoc on pricing. If you're looking at volumes to determine pricing and you aren't seeing the full picture, companies could be pricing themselves out of the market. Second, it makes year-end data on imports or even market movement less valuable, and that impacts forecasting (for both costs and availability). Third, it creates extra work for government personnel to address these issues, and that work/cost may impact the government's decisions to support future requests by industry."

Setting out the tariff rates and statistical categories for all merchandise imported into the United States, as defined by the U.S. International Trade Commission, is no small correction to make. While it is legally required that when importing to use the correct HTS codes—especially for perishable commodities—the association detailed it is also critically important. The fine for “non-compliance” via using the wrong code can range from 5 to 80 percent of the merchandise value, depending on the circumstance.

When it comes to future action at the border, as Dante mentioned, the wrong code also disrupts import statistics, impacting decisions such as commodity support from USDA, regulatory and investigative actions by the U.S. Department of Commerce, and beyond.

As we all look to trim the unwanted leftovers from 2023 for a brighter and better future, this seems an excellent opportunity to continue kicking off 2024 in the right direction.