TRB Webinar

As a TRB committee member I know that this webinar will be worth attending.

A reminder that TRB is hosting a FREE webinar on Wednesday, November 3rd from 2:00 to 3:30 PM Eastern that will identify how to keep cargo moving.

More details and registration information can be found here:

The Waters Edge

Assisting clients with export compliance is a big part of my consulting practice as well as a steady topic of blog posts. As logistics and compliance managers know, there are plenty of regulations on the export side of international transactions. However, this only brings us to the waters edge (or land borders with Canada and Mexico). US exports are other countries’ imports and they all have different regulations.

Some of the recent challenges overcome by a very diligent client included:

How to be Importer of Record (IOR) in the UK without a physical presence.

How to engage an Indirect Representative.

How to defer VAT. How to bill duties.

Are EORI (Economic Operators Registration and Identification) and VAT numbers in place for both UK and EU? Remember UK is no longer in the EU.

Is one EORI number sufficient for all EU countries?

Is a VAT number needed for individual EU destination countries?

Can EU customs broker also act as freight forwarder or make recommendations for movement within EU?

Are last mile and delivery arrangements in place?

It is not easy to obtain all these answers in advance but a little planning goes a long way. Contact mitch@ for assistance.

Making Changes?-Manage the Risk

The topic of last week’s post was diversification of the nodes and links in supply chains. A daunting task to say the least. In the current turbulent environment traders are looking for alternatives to help solve their logistics problems. This is a good idea. However, when discussing rates and services with a Logistics Service Provider (LSP), don’t forget compliance. While exporters bear primary responsibility for compliance, LSPs are a valuable resource. If you have already implemented an Export Compliance Program (ECP) congratulations! This will reduce the risk of changing LSPs.

Export compliance is good risk management. While risk management always gets C level attention, export compliance is often a mid-management or lower level function. Fines and penalties for violations should make export compliance a basic part of risk management.

If you are relying on your logistics service providers, or your busy shipping department, for export compliance you may be at risk. Both upper management commitment and front line training are essential parts of an ECP.

BIS (Bureau of Industry and Security) offers a number of on-line courses at no cost. Check them out under the Compliance and Training tab and get started!

Under the EAR (Export Administration Regulations) criminal penalties can reach 20 years imprisonment and $1 million per violation. A denial of export privileges prohibits a person from participating in any transaction subject to the EAR. Furthermore, it is unlawful for other businesses and individuals to participate in any way in an export transaction subject to the EAR with a denied person.

contact mitch@ for help with export compliance

Nodes and Links

A recent LinkedIn post by Kristen Morneau is an informative and timely reminder that diversifying supply chains can help mitigate disruptions. This is certainly a long term strategy which must be driven by upper management. Consider the complexities of finding new suppliers that can meet your standards, offer competitive pricing, and then smoothly integrate into your supply chain.

Logistics is tactical in support of supply chain strategy, so must be able to adapt to the planned diversification. The textbook terms nodes and links are descriptive in logistics and supply chain discussions. Nodes are fixed locations such as factories and distribution centers. Links are Logistics Service Providers (LSPs) which connect the nodes from pick up (first mile), through line-haul operations (middle mile), to end user delivery (last mile). The links include ocean and air carriers, freight forwarders, truck lines, integrated parcel systems, customs brokers, and possibly 3PLs. It is easier to change links than nodes. However, if diversification is to reduce supply chain disruptions, both nodes and links must be strengthened.

New suppliers should be evaluated for their export compliance and ability to perform first mile tasks. Vague or incomplete commercial invoice descriptions, for example, can cause customs delays. New LSPs can make or break supply chain strategy. Consider their services as “value adds” rather than just cost. Consistent performance is more important than rates when new links are utilized in your supply chain.

Diversifying any supply chain requires time, a complete project plan, upper management commitment, and attention to detail.

We can help you work with the links. Contact mitch@

13 Flags

In several previous posts we have noted the reasons why many companies postpone or ignore establishing an ECP (Export Compliance Program). If you are the CEO, COO, or CFO of one of these companies we advise starting to manage the risk of non-compliance. In the meantime here is a list from the Bureau of Industry and Security (BIS) website of things to look for in an export transaction. Make sure you are not doing business with the bad guys. A little due diligence up front saves a lot of trouble later on.

The customer or its address is similar to one of the parties found on the Commerce Department’s [BIS’] list of denied persons.

The customer or purchasing agent is reluctant to offer information about the end-use of the item.

The product’s capabilities do not fit the buyer’s line of business, such as an order for sophisticated computers for a small bakery.

The item ordered is incompatible with the technical level of the country to which it is being shipped, such as semiconductor manufacturing equipment being shipped to a country that has no electronics industry.

The customer is willing to pay cash for a very expensive item when the terms of sale would normally call for financing.

The customer is unfamiliar with the product’s performance characteristics but still wants the product.

The customer has little or no business background.

Routine installation, training, or maintenance services are declined by the customer.

Delivery dates are vague, or deliveries are planned for out of the way destinations.

A freight forwarding firm is listed as the product’s final destination.

The shipping route is abnormal for the product and destination.

Packaging is inconsistent with the stated method of shipment or destination.

When questioned, the buyer is evasive and especially unclear about whether the purchased product is for domestic use, for export, or for reexport.

For help contact mitch@

LinkedIn Comment- Customer Service

Dan Faber•

🌟 𝐓𝐡𝐞 𝐁𝐞𝐬𝐭 𝐖𝐚𝐲𝐬 𝐓𝐨 𝐋𝐞𝐯𝐞𝐥 𝐔𝐩 𝐘𝐨𝐮𝐫 𝐂𝐮𝐬𝐭𝐨𝐦𝐞𝐫 𝐒𝐞𝐫𝐯𝐢𝐜𝐞 𝐢𝐧 𝟐𝟎𝟐𝟏 𝐚𝐧𝐝 𝐁𝐞𝐲𝐨𝐧𝐝

Exceptional customer service has been proven to help brands stand out and flourish.

No company is perfect, and every organization has customer service concerns. In these cases, customers want to know that their concerns are being addressed quickly and painlessly. 💯

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

Deep SenGupta and Dan Faber I agree that accurate and timely info is key. Self service can be frustrating though when systems don’t recognize the issue easily. In my experience info is easier to get than action for example when the customer needs more than just a status update. The ability/authority to solve problems is what defines great customer service.

Beware the Boilerplate

The term boilerplate refers to standardized text, copy, documents, methods, or procedures that may be used over again without making major changes to the original. A boilerplate is commonly used for efficiency and to increase standardization in the structure and language of written or digital documents.

Traders when was the last time you reviewed your Commercial Invoice for accuracy or updates? Chances are it has been quite a while, given the more immediate challenges in logistics today. The same question applies to documents produced by your freight forwarder.

As everyone involved in international trade knows, the commercial invoice is one of the primary documents of the transaction. While there is no universal standard format for commercial invoices, including the following key elements will help reduce customs delays and entry mistakes:

Description of goods – Vague or incomplete descriptions are the most common cause of customs delays. Avoid trade names, brand names, jargon. What is it? What is it made of? What is it used for?

Recipient or Importer of Record contact info- customs delays are often prolonged by slow communication between CBP and importers. Make sure phone and e mail info is spelled out on the CI.

Invoice Number, Page Numbers – Avoids confusion for entries with multiple CIs or CIs with multiple pages.

Country of Origin– Best to use ISO country codes.

Related/Not Related parties

Incoterms and currency- these are elements of the sales contract. Indicate version of Incoterms (2010, 2020) as all parties may not be aware of updates.

Harmonized tariff # and duty rate if known– if unsure best not to include this info.

Summary of Value- must include IV Invoice Value. Can also include NDC Non Dutiable Charge (subtractions), AMMV Add to Make Market Value (additions), NEV Net Entered Value (bottom line- dutiable).

For immediate assistance contact mitch@

Do Not Self Blind

Kristen Morneau, LCB, CCS

“Failing to prevent”. Do not self blind

UK oilfield services firm Petrofac pleads guilty to 7 offences of failing to prevent bribery – fined $95 million after admitting overseas agents bribed to win contracts in Iraq, Saudi Arabia and UAE


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

Thanks for posting….Do Not Self Blind is good advice for compliance in general…

Where in the World?

I just took delivery of a new Volvo. The invoice shows the following:

US/Canadian parts content 1%- Major Sources of Foreign Parts Content: Belgium 25%, Sweden 20%

Final Assembly Point: Ghent, Belgium

Country of Origin- Engine Parts: Sweden , Transmission Parts: Japan

21st Century supply chains are complex, none more so than automotive. For much simpler products as well, parts are sourced globally before being assembled and shipped to the final destination.

Country of origin, often abbreviated COO, is one of the elements, along with harmonized code and commodity valuation, in determining duty/tax rates. While trade agreements such as USMCA (formerly NAFTA) have specific and complex rules of origin, the basic COO elements are:

Country in which the commodity is made, mined, grown, manufactured, or underwent substantial transformation. The 3 way test for substantial transformation is new name, new character, new use.

Substantial Transformation Rule….used to determine country of origin if articles or components are not wholly obtained from one country…Does article have new name, character, or use?

Change in character- altered physical characteristics of article or components. Were changes cosmetic? What was the process that resulted in change?

Change in use- Is end use of article interchangeable with end use of components? Is end use of component predetermined at time of importation? What was the process that resulted in change of use? Predetermined end use generally precludes substantial transformation but subject to specifics of article/components in question.

Change in name- this is the least compelling of the factors supporting substantial transformation. Do components retain original name after processing?

Subsidiary/Additional Factors- extent and nature of operations (complex or simple); value added and/or cost incurred during transformation process; essential character of article (components transformed into finished product); change from producer to consumer good; tariff shift.

Ad Hoc Logistics can help with regulatory questions or your international logistics needs. Contact mitch@