Old School But Still Relevant

Among the many challenges faced by logistics managers in 2020, remote work became a big factor. Communication is more important than ever. I have written about the Performance Chain in previous posts and this refresher may be helpful.

The logistics industry is heavily dependent on data and technology. The most successful LSPs (Logistics Service Providers) are innovative in their efforts to improve service and productivity to the benefit of both clients and providers. The nuts and bolts of logistics also involves people, so basic front line management skills can improve operations.

Here is a proven method for the toolbox. The links of the performance chain can help with day to day management and problem solving.

Expectations– Are goals and deliverables crystal clear? Don’t assume. Feedback– Information which is specific, timely, and relevant. Not just an annual review. Resources– Time, tools, and staffing to do the job right. Skills/Knowledge– Is training needed? Managers often point to training as the solution to problems. However, if employees know how to do the job training may not be the answer to performance issues. Look to the other links of the chain. Capacity– Does the person have the physical and mental ability to do the job with training? If not, reassign or terminate, and screen new hires more carefully. Incentives– What rewards are most meaningful to the workforce? These include money, benefits, flex time, etc. and will vary for individuals. Incentives are external and provided by the company. Motivation– Internal and personal to each employee. Top performers are self motivated. For others the idea is to bring out their motivation through incentives, training, or simply clearer expectations and feedback.

New to management? The performance chain is a good starting place. Experienced manager? Old dogs can learn new tricks.

Thanks to Jack Zigon for refreshing my memory.

Contact mitch@adhoclogistics.com for more info or assistance.

USMCA is 1 year Old

The US-Mexico-Canada Agreement (USMCA) went into force on July 1, 2020 replacing NAFTA. As traders know, shipping to/from Mexico is a bit more complicated than to/from Canada. In general the services of a Mexican customs broker are needed and shipments need to be transferred between US and Mexican carriers at specific ports of entry.

Some NAFTA provisions remain in effect but USMCA does contain new regulations as well. Here is a link to FAQs from the CBP website.

https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA/FAQs

Contact mitch@adhoclogistics.com for more info.

5 Steps to Export Compliance

Clients often know that they need help with export compliance but don’t know where to start. A written Export Compliance Program is the ideal way to keep compliant and is a good investment for any company to make. An ECP establishes clear accountability, written instructions, and reduces risk of non-compliance. However, an ECP is costly and time consuming, requiring a significant commitment on the part of management. If the exporter has not experienced problems or incurred any fines it is easy to make compliance a “back burner” issue. But doing nothing does not mitigate the risk!

Here are few best practices to help you get started :

1) Review and confirm correct Harmonized Tariff and Schedule B codes and maintain master list as updates occur. Proper classification follows established protocols and is the starting place for compliance.

2) Check Export Administration Regulations (EAR) for correct ECCN and license exception codes. Are you automatically using EAR99 and NLR? https://www.bis.doc.gov/ can help.

3) Confirm Country of Origin for all imports. This is not always obvious so consider consulting a Licensed Customs Broker.

4) Check common “Red Flags” such as denied parties lists, entities lists, and unverified lists. Once again, https://www.bis.doc.gov/ provides details and training.

5) Review export documentation for possible improvements.

Make export compliance a front-end process not a last minute shipping function. Remember, while Logistics Service Providers (LSPs) are valued partners, the exporter bears primary responsibility for compliance. Finally, if exporting under ITAR you need a responsible trained officer.

Contact mitch@adhoclogistics.com for immediate assistance.

TRB Meeting

On July 13th I was honored to participate in the midyear meeting of the Standing Committee on International Trade and Transportation, which is part of the Transportation Research Board: National Academies of Sciences, Engineering, and Medicine. The committee reviews cutting edge research studies and makes recommendations for publication. While many committee members are from academia, I bring a logistics practitioner’s perspective.

The meeting included a very informative presentation on “Post Covid 19 Impacts on International Trade and Transportation”.

Becoming a “Friend of” a TRB committee thru the attached link is a great way to learn and get involved.

https://www.nationalacademies.org/trb/transportation-research-board

19% Pass Customs Broker Exam

CBP has posted this information on their website:

The bi-annual Customs broker license exam (CBLE) was administered on April 21, 2021.  The electronic exam was held nationwide at over 120 testing locations and via remote proctor delivery. The exam results letters were emailed to the examinees on June 4, 2021. First appeals for the April 2021 exam are due to CBP no later than August 3, 2021.

The April 21, 2021 CBLE resulted in a 19% pass rate prior to appeal decisions. 

The October 8, 2020 CBLE resulted in a 37% pass rate prior to appeal decisions. 

Congratulations to those who passed the exam! Previous passing rates have rarely been higher than 10-15% so the test is obviously not easy. If you are planning to take the exam in October 2021 and would like some study tips I am happy to share what worked for me.

Contact mitch@adhoclogistics.com

Own It Exporters

Many of our posts focus on the basics of export compliance. Due diligence is required when filing EEIs, classification of Schedule B and ECCNs, and Country of Origin determination. An Export Compliance Program (ECP) is highly recommended as well as red flag screening, training, and audits. In spite of best efforts, mistakes will be made. In these cases a Voluntary Self-Disclosure is a smart move. Here is some info from the BIS (Bureau of Industry and Security) website:

Parties who believe they may have committed a violation of the EAR are encouraged to submit a Voluntary Self-Disclosure (VSD) to BIS. VSDs are an important indicator of a party’s desire to bring their export activities into compliance, and also may provide important information to BIS helping to identify foreign proliferation networks. Parties submitting VSDs may be eligible for significant reductions in administrative penalties, and those with well-implemented EMCPs may expect further significant reductions of administrative penalties. Procedures for submitting VSDs may be found in Section 764.5 of the EAR. The procedures detailed in Section 764.5 do not apply to VSDs involving violations of the antiboycott provisions of the EAR. Procedures for submitting VSDs for boycott violations are found in Section 764.8 of the EAR.

Contact mitch@adhoclogistics.com for assistance in submitting VSDs.

MidYear HTS Revisions

The United States International Trade Commission has updated the Harmonized Tariff Schedule of the United States effective July 1, 2021. Midyear is a good time to review your harmonized codes. The change record for this revision contains 4 pages of newly established, modified, and discontinued codes.

Using obsolete codes can result in customs delays, inaccurate  duty assessments, or fines and penalties. Best practices include checking the tariff periodically. While you are at it are you sure EAR99 and NLR apply to your exports?

For assistance contact mitch@adhoclogistics.com

LinkedIn Comment- Logistics People

Scot Snyder• 1stUS Army Retired/Talent Sourcing/Veteran & Invisible Disabilities Advocate/Logistics Careers & Recruiting/Workforce Training

Is Logistics still a people business or is the digital marketplace technology replacing the need for skilled 3PL/Logistics Pros? Or will tribal knowledge still remain a powerful differentiator?

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Licensed Customs Broker, International Logistics Consultant

In my opinion logistics providers must offer both high level technology and skilled people. Problem solving is a big part of logistics and clients want to follow up with trusted human contacts.