Thailand has over 1,000 registered freight forwarding companies, but just 19% of them are AEO certified and able to help importers simplify and speed customs clearance. Global companies doing business in Thailand would be wise to seek out forwarders that can bring the powerful benefits of AEO certification.
What is AEO?
AEO stands for Authorized Economic Operator. It’s part of the framework of standards developed by the World Customs Organization to promote and secure global trade. The rigorous certification process allows Customs authorities to quickly identify operators with high standards for supply chain safety and security. See the accompanying sidebar for just some of the requirements for AEO certification in Thailand.
AEO is considered equivalent to the Customs Trade Partnership Against Terrorism (CTPAT), a program of U.S. Customs and Border Protection. Dimerco’s Thailand office is among the few Thailand forwarders that is AEO certified, and they have been since 2014.
Select Thailand AEO standards
- Must be a registered company in Thailand, with capital of at least 5 million Baht
- Must provide proof of ongoing profitability as a business, and financial status must be validated by a recognized authority
- Must be doing import or export in Thailand and able to share data electronically in accordance with Thailand Customs requirements
- Must have a supply chain security plan in place
- Zero incidents of Customs offenses or revoked importer/exporter status
Benefits shippers gain from working with an AEO-certified forwarder in Thailand
- Reduce rate of customs inspection
- Faster clearance process – admission to Fast Track lane
- Faster tax refunds
- Priority clearance during disruptions related to natural disasters, terror or other emergencies
- No requirement to deposit a bank guarantee to import/export
- No volume guarantees needed for bulk cargo
- Ability to schedule complex transshipments through Thailand to another country
Dimerco Thailand recently imported a shipment from South Korea to Laem Chabang Seaport in Thailand. Cargo was then transloaded to a truck for final delivery to a customer in Laos. This was the most efficient means of transporting the shipment, but only an AEO-certified forwarder is approved to execute this process.
Working with a non-AEO-certified forwarder can be costly and inconvenient. For instance, if a transshipment is required, the importer or exporter can use AEO status as a self-guarantee in lieu of using cash or a security deposit. Without AEO for Thailand, the company must deposit around 1 million Baht with the Customs department to complete the transshipment.
Mutual recognition agreements extend the benefits of AEO status
Exports handled under AEO standards in Thailand will be recognized by certain foreign Customs agencies and afforded similar benefits in the destination country in order to simplify and speed customs clearance.
However, the destination country must have a Mutual Recognition Agreement (MRA ) in place with Thailand. Currently, the following countries have an MRA in place: Brunei, Hong Kong, Indonesia, Japan, Korea, Malaysia, Singapore, and Vietnam
Dimerco is also AEO-certified in China, as well as in Indonesia, Taiwan, Thailand, Germany and the Netherlands. In China, Dimerco has achieved the highest level of AEO status. As an Advanced Certified Enterprise (ACE) in China, Dimerco can cut clearance times as much as one full workday versus a non-AEO 3PL.
When selecting a freight forwarder, ask about AEO
If you are looking for an Asia-based freight forwarder to assist with importing and exporting in Thailand, consider raising a question most shippers fail to ask potential partners: “Are you AEO-certified in Thailand?”
Choosing one that answers “yes” to that question can save you time, hassle and money – and reduce your cash cycle. To learn more, talk to a Dimerco shipping expert today.