Incoterms Revisited

A couple of recent projects in which Ad Hoc Logistics was engaged included determining  proper Incoterms. Here is info from a 2014 post on Incoterms. For help contact mitch@adhoclogistics.com

Incoterms are rules used to facilitate global trade. Incoterms were created and are administered by the International Chamber of Commerce and are updated every 10 years. Incoterms 2010 published by ICC Services Publications, Paris FR is a very good reference. Some of the important points covered in the book are:

  • Incoterms must be in the contract of sale to apply
  • > 120 countries have endorsed Incoterms 2010
  • Now 11 rules in 2 groups
  • 2 new rules deal with geographic place
  • Incoterms is not a law…older versions can be used as long as all parties agree
  • Incoterms replaces Uniform Commercial Code (UCC) in domestic commerce
  • for reference  www.iccbooksusa.com
  • Incoterms cover;
    • Who does what
    • Who pays for what
    • When risk of goods passes from seller to buyer
    • Who is responsible for insurance, export clearance, import clearance, and other costs pertaining to delivery of goods
  • Incoterms do not cover;
    • Ownership or title to goods
    • Payment terms
    • Detailed requirements
    • Complete contract of sale

Incoterms 2010 includes several rules changes:

  • Now referred to as rules not terms
  • Remove DAF DES DDU DEQ
  • New Rules  DAT DAP
  • 2 Groups…Any Mode and Ocean/Inland Waterway Only
  • Any Mode…EXW FCA CPT CIP DAT DAP DDP
  • Ocean or Inland Waterway Only…FAS FOB CFR CIF

Attached chart is a quick guide to Incoterms 2010

Incoterms 2010 Quick Reference Chart 120610

Mitch’s Comments on Airlines

Examples of Change for the Better in Airlines

Posted on LinkedIn by Colin Shaw

There have been many great stories in the past couple of months about airlines doing what was right by their Customers. We can all learn a little about Customer centricity when we look at these examples from three major carriers in the US.

 

Frontier Airlines Pilot Feeds His Passengers While Stranded on Runway

Southwest Attacks Its Late Problem Head-on with Its Customers

JetBlue Will Automatically Check You in

 

 

Mitch Kostoulakos CTL,LCB

International Logistics and Regulatory Consulting

Good examples of the kinds of things airlines need to do to improve their image and win passenger loyalty. Bravo to the Frontier Airlines captain but that is about an individual employee taking action, not a systemic change. I agree though that these are steps in the right direction.

 

Ad Hoc Logistics assisting electronics distributor

Ad Hoc Logistics is working with a MA electronics distributor to facilitate a complex import shipment from CN.We have researched several freight forwarders’ capabilities, advised on documentation, and arranged ocean transportation.

We can help your company be more productive. Let your shippers focus on packing and shipping. Ad Hoc Logistics can handle logistics details for you. Contact mitch@adhoclogistics.com

 

Mitch’s Comments on Airline Service Complaints

Book Review of The Next Crash

Book Review published in Transportation Journal, Winter 2015.

The Next Crash: How Short-Term Profit Seeking Trumps Airline Safety

Amy L. Fraher

Cornell University Press

512 East State St

Ithaca, NY 14850

2014, 224 pp.

ISBN 978-0-8014-5285-7

$27.95

 

Conventional wisdom holds that travel on passenger airlines has never been safer than it is today. Amy L. Fraher, author of “The Next Crash: How Short Term Profit Seeking Trumps Airline Safety”, disagrees. Fraher is a former US Navy and United Airlines pilot who lectures in Organizational Studies. Her book takes a critical theory approach to the accepted wisdom of airline safety and, especially, the failures of management in the industry post 9/11.

The author begins by comparing current airline financial and risk management practices with those of the financial industry prior to the crisis of 2008. The book consists of seven concisely written chapters, supported by ample statistics and graphs.

The readers’ attention is captured in the first chapter with examples of how the industry is being systematically dismantled and airlines taken into bankruptcy in order to shed labor contracts. Indeed, according to Fraher, bankruptcy is the preferred strategy of CEO’s who are handsomely rewarded following Chapter 11. She believes that the industry used the downturn after 9/11 as an excuse to revamp the entire air transportation system in the US.

The next three chapters provide a good history of the airline industry both before and after de-regulation. The current regulatory environment is examined and found wanting. The author contends that the government has been reluctant to impose regulations until disaster strikes. The preference of policy makers has been to let the market sort out economics, safety, training, and economic development. Since de-regulation the FAA has been charged with both promoting and regulating airlines. Fraher provides evidence that the FAA is more active in promoting air travel than in regulating safety. We now know that de-regulation did reduce fares and increase the ability of average people to fly. Over time, however, the industry has consolidated and is now made up of a few legacy carriers, several low cost carriers, and regional “feeder” lines. Airline de-regulation was followed by the same in trucking, finance, and communications.

Chapter 5 is an interesting study of risk management, finance, and cost cutting. As airlines consolidated they have attempted to build market share through hub and spoke operations, frequent flyer programs, and by starting commuter airlines to feed the hubs. Regional airlines provide the “spoke” flights with little FAA oversight and much lower operating costs. The description of low paid, inexperienced, and sleep deprived commuter pilots is chilling, especially because regional airlines carry approximately 50% of US air passengers. Fraher is highly critical of managers who are rewarded for employee layoffs and for managing risk as a cost of doing business.

Chapter 6, “Strapped In for the Ride”, summarizes post 9/11 airline economics and the low cost model. One result has been a pilot shortage due to low pay, greater military retention, and outsourcing of airline operations. Several recent fatal accidents are described in detail. In each case the National Transportation Safety Board cited lack of pilot and/or mechanics professionalism and failure to adhere to established procedures. In fact, the NTSB criticizes the FAA for lax oversight and inadequate regulations.

In Chapter 7, “Airlines Today”, Fraher continues her strong indictment of management by describing divide and conquer policies which pit groups of employees against each other. The key to fostering friction between employees is the structure of airline labor contracts in which different unions represent various professional groups.

The Epilogue is an excellent summary of the issues along with the author’s recommendations to improve the industry. These common sense solutions include increased government investment in infrastructure, more effective regulation, restricting the ability to declare Chapter 11, and more emphasis on airline safety before accidents occur. Adopting these measures would mean a small surcharge on every ticket sold, taxing airline ancillary fees, and eliminating subsidized flights through the outdated Essential Air Service program. Finally, Fraher says that the FAA’s dual mandate to promote and regulate aviation should be divided into separate agencies.

Though clearly biased in favor of pilots and airline employees vs. management, Amy Fraher has written an informative and thought provoking book.

 

Mitch Kostoulakos, CTL

Adjunct Faculty

Southern New Hampshire University

 

 

BIS Country Guidance

One of the basic steps in export compliance is checking country of ultimate destination regulations. The tool for this step is the Commerce Country Chart which can be found in the Export Administration Regulations (EAR).

From the BIS website:

The country of ultimate destination is a key factor in determining license requirements administered by the Bureau of Industry and Security (BIS) pursuant to the Export Administration Regulations (EAR). BIS maintains the Commerce Country Chart to use in conjunction with other portions of the EAR to determine whether a license is required.  Please review Part 732 of the EAR for additional information on how to use the EAR, including the Commerce Country Chart.

Contact mitch@adhoclogistics.com for help with export compliance.

 

 

International Logistics Consulting; Licensed Customs Brokers