One giant leap

Often, these mistakes would not be caught until months after the fact, when the company would call in a third-party auditor. Correcting them could be complicated; since many of Giant Tiger’s vendors sell goods to liquidate, they often cease to exist after the deal.

While this approach was far from ideal, it was more or less workable—that is, until things went wrong. In 2006, some of the company’s vendors declared shipments of textiles as NAFTA-qualified, but failed to prove it to the Canada Border Services Agency (CBSA). The vendors were flagged for a NAFTA verification audit, and Giant Tiger found itself on the hook for the duties.

This was a wake-up call for Matchett.

“We realized then that we couldn’t rely on our vendors to understand CBSA regulations,” he says. “We basically decided to take complete control of our Customs program. We wanted to maintain Giant Tiger’s integrity and eliminate any liability.”

Drawing on internal expertise
Giant Tiger made the decision to start validating every import shipment itself. It hired three employees to help with the process, doubling the size of the import/export team. The company became vigilant. It locked down import traffic, refusing to accept any shipment until someone had examined the paperwork and validated the information. Almost immediately, staff members discovered numerous errors, particularly related to shipments from the US. Matchett calls the experience “eye-opening.”

While the manual verification process greatly reduced errors, it proved to be very time-consuming and strenuous. It soon became clear that it was far too labour-intensive to be a sustainable part of the business.

But because Giant Tiger verified everything, it found itself providing more and more information to Customs brokers. It was gathering, checking and submitting all the data for the CBSA’s B3 Canada Customs Coding Forms. It was providing information on Harmonized System Codes, value for duty and tariff treatment.

Behind much of the work was Dan Leslie, the company’s import/export Customs specialist, an individual who knew the ins and outs of the company’s Customs clearance process better than anyone.

“We realized that we were doing the majority of the work on behalf of the Customs brokers,” Matchett says. “They were just keying it in for us.”

Recognizing the inefficiency of paying good money for little more than data entry, the company started looking for ways to bypass its Customs brokers. It started by looking at a few off-the-shelf software suites designed to automate the process and provide a direct link to the CBSA.