One aspect of the customs process that we’ve touched on a few times in this Journal is the classification system. The Harmonized System (HS) is a standardized system used to classify goods in international trade. It is one of the three most common systems used globally. The HS, along with the other classification systems, serves as the foundation for all import and export processes. For example, the U.S. uses the Harmonized Tariff Schedule (HTS), which was created from the HS, but was modified by the U.S. International Trade Commission. HTS codes are 8-10 digits long and the first six digits are often HS codes, but this isn’t always the case. Companies identify and classify goods to other importers and exporters around the world using these classification systems. These codes need to be declared to customs agencies to enter another country.

Misclassification of a good can result in penalties, fees, or detention of goods which can prove costly from a financial and time perspective. However, despite the importance of correct classification, most companies don’t have the manpower or resources to devote to constant auditing of their classification libraries/product databases. This is where Scarbrough can help.

Together with our partners at Altana, we can harness the power of Artificial Intelligence to screen your entire library for you. We will use Altana’s software to periodically comb through your database to pick out any goods that may be misclassified. This screening is done at the SKU level, and it will flag any entries it thinks may be incorrect. From there, Scarbrough will provide a report to you to review any flagged entries for accuracy. If you determine that any entries require correction, Scarbrough is here to help you establish the proper classification for your goods.

We are proud to offer this screening service to any of our customers beginning in the second quarter of 2025. If you think your company could benefit from AI-assisted classification, please reach out to your Scarbrough representative for more information. This is just another way we are working to make the impossible seem possible.