Brexit Is Not Going Away

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Brexit is not going away…
While the pandemic is dominating all news feeds, the Brexit deadline steadily approaches. Big questions remain unanswered. How will trading partners manage relationships and logistics with both the UK and EU as separate entities?

https://www.euronews.com/2020/02/11/brexit-draft-deal-first-of-many-hurdles-to-a-smooth-exit

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Logistics Trends & Insights LLC

FollowAmazon Air’s freighter fleet projected to hit 200 in 2028 which, if it happens, can definitely rival UPS and FedEx. If true, how will this change the air express market? How will it impact Amazon’s relationship with UPS?

Mitch Kostoulakos, LCB   Licensed Customs Broker, International Logistics Consultant

200 aircraft would be less than half the size of the FedEx fleet

Details, Details

Compliance is about attention to detail, consistency, process, and oversight. I guarantee that your compliance folks are not trying to practice “sales prevention”. The goal is to complete transactions the right way and avoid customs or logistics delays and possible exposure to fines and penalties. However, there is no doubt that complying with all of the agencies involved in international trade generates a lot of red tape and can be frustrating.

Consider just a few of the details that can make or break a smooth transaction:

Harmonized Codes to the full 10 digits including heading and sub heading. It is very easy to transpose digits.

Schedule B Codes, ditto

ECCN , Alpha numeric, number, letter, followed by 3 numbers. Example 4A994. Then followed by sub paragraph level and don’t forget the dot between the last number and the sub para.

License Exceptions are designated by 3 letter codes and must be compatible with the ECCN listed.

COO, Country of Origin markings and proper codes on documents and AES filings. Best not to guess here. Have you ever entered CH for China?

Valuation must be determined accurately and is best covered in a separate post which I have done on 05/09/2019.

These are just some of the basics. We could also mention commodity descriptions, red flag screening, incoterms, and plenty of other details. So, hats off to the compliance teams.

For assistance contact mitch@adhoclogistics.com

Wicked Problems

The public health crisis and resulting economic decline calls to mind the term “wicked problem” from a noted supply chain management text*. We can consider supply chain to be strategic while logistics is more tactical. Fortunately, most logistics problems do not fall into the “wicked” category. Supply chain is more complex and problems are more difficult to solve.

A wicked problem involves multiple stakeholders, each with different interests and values. As a result there is no single common goal , no clear mission, and no universal solution. Any solution, after being implemented, will generate waves of consequences and can result in making the problem worse.  A suggested framework for tackling a wicked problem consists of 4 levels of increasing complexity:

Level 1- Process Engineering and inventory management– This is the engineering approach focusing on what is being carried (work, cash, information) and process design within and between organizations. Risk management is about improved visibility and control.

Level 2- Assets and Infrastructure- This is the insurance and financial approach. Nodes and links are examined and strengthened to avoid disruptions along the supply chain.

Level 3- Organizations and Inter-organizational networks– this is strategic level problem solving involving outsourcing, partnering, and offshoring.

Level 4- the Macro Environment- This level uses PEST  (Political, Economic, Social, and Technological) analysis of environmental changes. Issues include green and legal/regulatory as well as geo political factors.

*Global Logistics & Supply Chain Management by John Mangan, Chandra Lalwani, Tim Butcher, and Roya Javadpour

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USMCA Update

The USMCA is scheduled to take effect on July 1st. Here are a few key points from an informative webinar presented by Dan Gardner of Trade Facilitators, Inc.

NAFTA Certificate of Origin is going away. As detailed in Chapter 5 of the agreement, a certification statement is replacing the NAFTA Certificate.

The statement can be prepared by exporters and also by importers who must provide back up details if requested. There is no prescribed format for the certification statement but it must include minimum data elements as listed in Annex 5-A.

Country of Origin statement can be included on the commercial invoice and electronic format may be used with e signature.