Don’t Blame Forwarders

Astronomical ocean rates, containers in the wrong locations, tight capacity in trucking, and shortages of critical components. These are the issues facing logistics managers as we enter peak season for many industries. It is often noted that supply chain is strategic while logistics is tactical. Day to day logistics consists of planning, execution, and problem solving. Right now it seems that the job is mostly problem solving. This certainly leads to frustration for all parties.

Changing forwarders or other LSPs (Logistics Service Providers) as a solution may be tempting but futile. LSPs are struggling to serve existing clients as best they can. Sales departments are always looking to grow their customer base and, at the same time, maintain existing accounts. Relationships are still the key ingredient and every LSP that I know is working diligently to manage their business.

Freight forwarders are middlemen and have relationships of their own with ocean and air carriers. The strength of these relationships gives them the bandwidth to provide service to importers and exporters. They work with but don’t control overall capacity and rates.

For reference here is a link to Freight Forwarder Guidance from the BIS (Bureau of Industry and Security) website:

https://www.bis.doc.gov/index.php/all-articles/24-compliance-a-training/export-management-a-compliance/48-freight-forwarder-guidance

Need help with follow up or problem solving? Contact mitch@adhoclogistics.com

Heads Up Customs Brokers!

CBP has proposed mandatory continuing education for individually licensed customs brokers. The CBLE (Customs Broker License Exam) is notoriously difficult to pass but there is currently no continuing education required for LCBs (Licensed Customs Brokers). I support continuing education as a way to further professionalize the field. The comment period for the trade community and the public at large ends on Tuesday November 9, 2021. Here is the notice from the CBP website.

https://www.cbp.gov/trade/programs-administration/customs-brokers

Continuing Education for Licensed Customs Brokers

Licensed Customs brokers play a critical role in protecting the revenue and facilitating the movement of compliant cargo. U.S. Customs and Border Protection published the Broker Continuing Education Notice of Proposed Rulemaking (NPRM) 86 FR 50794 in the Federal Register on Friday, September 10, 2021. In this NPRM, CBP proposes a mandatory continuing education requirement for individual licensed brokers.  This proposal is a key step forward to providing a program that can serve both government and industry, with an intended goal of raising the credibility and value of the broker’s license and profession.

Please see the posting for 86 FR 50794 here.

CBP appreciates comments from the trade community and the public at large on the NPRM. The comment period opens Friday, September 10, 2021 and ends Tuesday, November 9, 2021.

What’s the Value of Compliance?

I have always advised clients that export compliance equals good risk management. Whether or not a formal ECP (Export Compliance Plan) is implemented, there are a number of best practices that are essential for any company involved in international trade.

Compliance is often a “back burner” project for several reasons. Don’t know where to start, lack of C-level commitment, reluctance to allocate resources, too small to worry about compliance, no previous problems, or just plain inertia.

While it is not possible to calculate ROI for export compliance we can identify a value proposition.

Risk Management– avoid the cost of fines and penalties which can reach $1 Million for criminal violations. Think of compliance as insurance.

Save Time– export compliance means less re-work or follow up of requests for information from customers, government agencies, or forwarders.

Make Money/ Grow the Business- basic competence in exporting enables expansion to international markets. Compliance problems will cause customs delays and be an impediment to growth.

Enhance the Brand– similar to ISO certification and C-TPAT, an ECP demonstrates professionalism. Show customers and prospective customers that you know what you are doing.

I would be interested in hearing other value propositions for compliance. In the meantime, why not get started?

Contact mitch@adhoclogistics.com for immediate assistance.

LinkedIn Comment- Experience

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

Experience adds value…

Gustavo Dobles

President at Dobles Productions, Inc. | Business Consulting and Projects | Music Projects

Experience is a journey through time.  

They say it takes 10,000 repetitions for someone to master something. This takes time. If you work in business for 35 years as I have, it translates, at regular 8-hour days, to over 60,000 hours of experience (and this is before adding all the overtime). A wealth of experience. And for me, and I am sure for most, a source of pride. 

So you go through this long journey and then one day you lose your job. All of a sudden, you are counseled that everything you’ve done you are to disguise, take all dates out of your resume, don’t say anything to date yourself, etc.

So i ask: who are we going to fool on the first interview? If we are to be “found out”…”Wow Mary! he’s old”…why go through the socially degrading pretense of disguising who we are? 

Of course, we should not be naive about these things, we can’t control what other people do and it is natural that eventually the young displace the old, but I do ask: “does it have to be this way? Isn’t there a better way? Can we preserve the respect and dignity of people that have worked for many years, built a wealth of experience, with many accomplishments they are proud of?  

Does it occur to the gatekeepers of today that the very system they are perpetuating will grind them next?  

Recruiters, HR executives, CEO’s, people in charge: this practice is not necessary. It may not be done with bad intentions but still it is insensitive. If you have need for our experience, use it, if not, don’t. But either way, do it with human respect and dignity. 

I am 63 years old in a continued journey of experience, and proud of it. If you want to use my experience…well…my age is an inseparable partner. 

If this resonates please share. 

#experience
#humanexperience

Just a Quick Question ?

Consultants often receive “Just a quick question?” queries from clients or others and everyone responds differently. Most likely the questioner believes that their question is an easy one and is looking for pro bono service. In fact, while it is easy to ask a quick question, an accurate response is not always quick. I will outline how I handle quick questions but first a couple of anecdotes.

One potential client told me up front that they “did not expect to pay for their easy HTS classification”. I advised that I am a professional Licensed Customs Broker and am paid for my time and expertise. I then quoted a reasonable charge for HTS research, CROSS examination, reviewing GRIs and notes, and documenting for future reference.

Another potential client offered to compensate me for checking some regulations by buying me lunch. I politely responded that I sometimes conduct business lunches but always with the client as my guest. I then quoted a minimum charge for the research requested.

I never heard back from either potential client. As a solo practitioner I know that I need to remain flexible and avoid rigid procedures while making sure that I am compensated for my time and expertise. Based on trial and error, here is how I handle “quick questions”.

Active clients– It is easier to keep clients than to gain new ones. So if I can answer a question from an active client on the spot I will do so as a goodwill gesture. This usually involves something simple like identifying a resource for them. If time or research is required I will let the client know how I will handle the request and what I will charge. Most clients understand this approach because I have added value for them in the past. If they have frequent quick questions I may suggest my retainer service which allows them to prepay for brief consultations by choosing a set number of hours.

Prospective clients– This is a little trickier because of situations such as the ones I have described, so I am more selective in my responses. I do try to be helpful so that they will remember me when they have a real project. If time and research is required I will propose the retainer option or quote a minimum charge. I will always try to learn about the potential client’s business so that I can determine their real needs and follow up at a later date.

Former colleagues– One of the benefits of being a FedEx alum is having contacts with excellent colleagues all over the world. A number of active clients have been the result of referrals by former colleagues. Any questions they have are on behalf of their clients which can also be my prospective clients. Their referrals are my compensation. If they have a project requiring time and research I may ask them to connect me to the client if possible. I’m always happy to hear from former colleagues so FedExers don’t hesitate to reach out.

Friends and family- This is rare as I try not to mix personal with professional and I don’t want to charge friends or family. I would accommodate a minor request and give them a referral for anything more complex.

This method is not perfect but works well enough for me in my growing practice. I would be interested in hearing how other consultants handle “quick questions”

Contact mitch@adhoclogistics.com

Independence for Compliance Pros

Compliance professionals know that an effective ECP (Export Compliance Program) must include C- level commitment and involvement, sufficient funding, well defined and documented responsibilities, on-going training, and internal audits. Weak ECPs lack some of these elements and are simply window dressing or paper programs.

In house compliance professionals are often given responsibility without authority. Further, they may be at mid or lower management levels or in the wrong chain of command. With or without a formal ECP, compliance professionals must have the authority to place holds on questionable exports without being overruled by sales, finance, or supply chain. Well written protocols for resolving issues and releasing holds require C-level or legal approval.

All of the above illustrates the importance of compliance independence. This may mean reporting to the CEO, COO, or legal department in order to remove pressure from other groups.

If your in house compliance professional is not truly independent hire a consultant!

Contact mitch@adhoclogistics.com for immediate assistance.