Mass Export Webinar

This week I participated in a Mass Export webinar, “Using a Risk Based Approach to Building Your Export Compliance Program”. The presenters, Thomas Andrukonis and Eric Rudolph, demonstrated practical ideas for implementing a new ECP or improving an existing one. I found the best practices on developing training manuals and red flag screening to be most useful.

Creating a formal Export Compliance Program is a daunting task for any company so it is often deferred due to the time commitments and resources required. However, doing nothing about export compliance is not an option. There are plenty of interim steps that will reduce exposure to fines and penalties and improve the process until you are ready to build your ECP.

Contact mitch@adhoclogistics.com for immediate assistance.

Carnet Anyone?

Business travel is likely to increase in 2021, with a corresponding need for temporary importations. Crossing borders with products for demonstration or tools of trade can be problematic. Options include ATA Carnets, Temporary Importation Bond (TIB), and entry with duty drawback.

Carnets are the simplest option. Think of a carnet as a passport or visa for merchandise. The processing system is user friendly and can be quite cost effective for a basic carnet.

Here is some info and FAQs from the International Trade Administration:

https://www.trade.gov/ata-carnet

contact mitch@adhoclogistics.com for immediate assistance.

Alphabet Soup (Continued)

Exporters know that EEI (Electronic Export Information) must be filed in the Automated Export System (AES), also known as the Automated Commercial Environment (ACE) , which is a US Customs and Border Protection (CBP) system. Finally, the EEI replaced the old yellow paper Shippers Export Declaration (SED) a number of years ago. Got all that?

I have found that most clients are quite proficient with the system and are able to process their filings easily. In many companies, however, EEI filings are forgotten after they go through and are not audited for accuracy. If you have a formal Export Compliance Program, which is highly recommended, EEI audits are probably included. If not you are at risk for fines and penalties.

Here is an example of a common filing error for which you may be in violation without realizing it. According to 15CFR part 30.6 the value reported in the EEI must include inland freight, insurance, and other charges to the US port of export. So simply entering the Commercial Invoice value in the EEI is a mistake unless these charges are also on the CI.

(17) Value. In general, the value to be reported in the EEI shall be the value of the goods at the U.S. port of export in U.S. dollars. The value shall be the selling price (or the cost, if the goods are not sold), plus inland or domestic freight, insurance, and other charges to the U.S. seaport, airport, or land border port of export. Cost of goods is the sum of expenses incurred in the USPPI’s acquisition or production of the goods. Report the value to the nearest dollar, omit cents. Fractions of a dollar less than 50 cents should be ignored, and fractions of 50 cents or more should be rounded up to the next dollar.

Ad Hoc Logistics can audit your EEI filings and help you avoid fines and penalties. Contact mitch@adhoclogistics.com for immediate assistance.

Basic Training

I’ll never forget basic training at Fort Bliss, Texas, but let me suggest a much easier program. My background also includes a number of years as a corporate trainer. So I understand that in 2020 most companies were required to cut costs, including the training budget, and staffing cuts were often made at the same time. Remaining staff took on additional duties and performed out of their comfort zone with few opportunities for training.

This is not the time to risk logistics service failures or customs delays which can cost you business. Some basic training with practical “how to’s” is in order. We can help!

I have developed “A to Z of Managing Logistics”, a brief presentation designed for managers who wear several hats and must oversee logistics among other duties. The steps outlined in the presentation are also valuable in training new logistics employees.

If interested contact:

mitch@adhoclogistics.com

LinkedIn Comments

Dean Maciuba•

I was saddened to hear about the mass shooting at a FedEx Ground operations facility in Indianapolis. Since that time, I have seen some incomplete reporting in some cases. Here is my experience as a previous employee at FedEx for 35 years:

1) FedEx has robust security protocol in place at their ground operations facilities, including secured access and metal detector type scanning processes at many bldgs.
2) FedEx Ground does not skimp on security.
4) Cell phones are banned as a safety measure to prevent distractions at hubs/terminals, that could result in injury to employees.
5) Background and criminal checks are performed on all new employees.
6) FedEx has very close relationships with local and national law enforcement agencies.

Mitch Kostoulakos, LCB Licensed Customs Broker, International Logistics Consultant

As a former FedEx employee (18 years) I know that the safety of team members is at the top of their list of priorities. I mostly avoid politics on LinkedIn but this is a national problem. Thoughts and prayers are not working. We need real solutions.

Got Customs Delays?

I often hear from clients about shipments “stuck” in customs and, needless to say, they are always frustrated. The shipments may include critical parts needed for an equipment or plant shutdown, expensive high tech components not generally carried in inventory, or medical instruments for hospitals. Delayed orders also mean delayed payments which gets everyone’s attention.

The data used in customs entries comes directly from the commercial invoice for the transaction. All countries have different, and sometimes obscure, customs regulations. It is true, however, that most delays are caused by a few commercial invoice errors or omissions.

Commodity descriptions should answer the questions: What is it? What is it made of? What is it used for? Use plain language which can be understood by anyone. Avoid trade names, brand names, and jargon. These can be added below the description or to the packing list as needed. If using a harmonized code enter only the first 6 digits which are universal. All countries apply their own last 4 or 6 digits.

Value for customs may appear to be too low for the commodity being shipped. The customs agencies in the destination country need to make sure that duty rates are accurate and will hold up the shipment if in doubt. Make sure that your commercial invoice reflects the correct transaction value.

Recipient contact info is often lacking on the commercial invoice. Customs in the importing country will not contact the exporter if they have questions or issues. If they are unable to contact the importer the shipment will go into storage. Make sure you include recipient name, address, phone number, and e mail address on your CI.

Contact mitch@adhoclogistics.com for immediate assistance.

Freight Forwader Guidance

Freight forwarders are essential logistics service providers in international trade. The functions performed by forwarders make it possible for any business to export their products without a large staff. In recommending forwarders to clients I always emphasize the importance of maintaining a good business relationship with providers. It is important to note, however, that primary responsibility for compliance with the EAR falls on the “principal parties in interest” (PPI) in a transaction. This usually means the US seller and the foreign buyer.

Here is some useful info from BIS:

Responsibilities of the Forwarding Community

Forwarding agents have compliance responsibilities under the Export Administration Regulations (EAR) even when their actions are dependent upon information or instructions given by those who use their services. However, hiring an agent, whether a freight forwarder or some other agent, to perform various tasks, does not relieve a party of its compliance responsibilities.

Agents are responsible for the representations they make in filing export data. Moreover, no person, including an agent, may proceed with any transaction knowing that a violation of the EAR has, is about to, or is intended to occur. It is the agent’s responsibility to understand its obligations.

Primary responsibility for compliance with the EAR falls on the “principal parties in interest” (PPI) in a transaction. Generally, the PPIs in an export transaction are the U.S. seller and foreign buyer. 

Contact mitch@adhoclogistics.com for immediate assistance.

What Is A Reexport ?

In several recent posts we discussed EEI filing, how to determine ECCN, and what is meant by EAR99. It is important to understand that Export Administration Regulations apply to reexports as well as exports. Here is the definition of reexports from the BIS (Bureau of Industry and Security) and a link to their publication Reexport Controls.

A reexport is the shipment or transmission of an item subject to the EAR from one foreign country (i.e., a country other than the United States)to another foreign country. A reexport also occurs when there is “release” of technology or software(source code) subject to the EAR in one foreign country to a national of another foreign country.

https://www.bis.doc.gov/index.php/documents/licensing-forms/4-guidelines-to-reexport-publications/file

Export best practices mean confirming that you are in compliance on all transactions. Don’t assume, validate!

Contact mitch@adhoclogistics.com for assistance.

LinkedIn Comments

Dean Maciuba• 1stLast Mile Experts Large Parcel Rate Increases

If you follow me on LinkedIn, you have seen me opining on the parcel based, dynamic pricing environment enveloping the customers of FedEx and UPS. In more simple terms, the mega carriers are and will be taking selective rate increases on a regular basis.

Mitch Kostoulakos, LCB  Licensed Customs Broker, International Logistics Consultant

Good reminder that a vibrant USPS is needed…

LinkedIn Comments

Gustavo Dobles•

1stOperations and Content Executive | Strategic Business and Operational Planning and Management | Process Improvements Asking the expert teams on the ground what should be done and what it will take (and you should…) is not enough: then be ready and willing to pay attention, consider carefully what is being conveyed, and make decisions accordingly.

Just as deficient or perhaps even worse than not asking, is ignoring the expert advise given.

The highest form of thinking is through the synthetic reconciliation of different and many times contradictory points of view.

Synthesis: the dialectic combination of thesis and antithesis into a higher stage of truth (Merriam-Webster Dictionary)

#leadershipcoaching#leadershipdevelopment#leadership#managementdevelopment#management#managementcoaching

Mitch Kostoulakos, LCB  Licensed Customs Broker, International Logistics Consultant

Very good advice….Thanks Gustavo