Changing Links?

No, I’m not referring to golf, but using links as a logistics term. The pandemic and recent events have made it clear that diversifying supply chains can help mitigate disruptions.

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 LSPs must be evaluated for their export compliance and ability to perform first mile, middle mile, and last mile operations. Details matter. Failure to review documentation, 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@adhoclogistics.com

Are you an Amateur Trader?

Clients often say “we’ve used the same harmonized codes for years” and “our commodities are duty free“. As a Licensed Customs Broker and consultant this tells me that I need to do some checking on the client’s behalf. Using obsolete or invalid HTS codes is a sign of an amateurish operation. It is likely that, for these clients, commercial invoice descriptions also need updating. If they are an exporter we should check ECCNs, License Exceptions, and Schedule B numbers as well.

The Harmonized Tariff Schedule code is a 10-digit import classification system that is specific to the United States. HTS codes, also called HTS numbers, are administered by the U.S. International Trade Commission (ITC).

Customs brokers use the HTS, along with CBP regulations, in their day to day business. Importers and traders may also make use of the HTS in determining duty rates. Checking the validity of harmonized codes at least semi-annually is a good business practice. What may be surprising is the frequency of revisions to the HTS.

The tariff archives show that the 2021 HTS was revised 12 times. Don’t assume that your codes are valid. A little due diligence helps avoid problems down the road. Contact mitch@adhoclogistics.com for a review of your HTS codes.

CBLE Is Challenging

Following up on my February 3rd post about the April 2022 Customs Broker License Exam, here is some info from the CBP website:

Past CBLE Information

The October 21, 2021 CBLE resulted in a 25% pass rate prior to appeal decisions.

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

These results are significantly higher than for previous exams. The CBLE remains challenging, however, even for those who have experience in the field. If you are planning to take the exam on April 27th you should be well into your preparations by now.

Contact mitch@adhoclogistics.com if you would like study tips.

More Due Diligence

My January post about due diligence in compliance included reviewing updated HTS and Schedule B codes. Another best practice is to check your ECCN codes and License Exceptions. Chances are you have been using the same ECCN and License Exceptions or EAR99 and NLR as default entries.

Here is some recent info from BIS (Bureau of Industry and Security) about changes to ECCN and License Exceptions. While this notice may not apply to you, the point is that ECCNs and License Exceptions can change. For help contact mitch@adhoclogistics.com.

1/12/2022
87 FR 1670

Information Security Controls: Cybersecurity Items; Delay of Effective Date

On October 21, 2021, the Bureau of Industry and Security (BIS) published an interim final rule that establishes new controls on certain cybersecurity items for National Security (NS) and Anti-terrorism (AT) reasons, along with a new License Exception, Authorized Cybersecurity Exports (ACE), that authorizes exports of these items to most destinations except in the circumstances described in that rule.  That rule was published with a 45-day comment period, which ended on December 12, 2021, and a 90-day delayed effective date (January 19, 2022). This rule delays the effective date of the interim final rule by 45 days (March 7, 2022).  This action does not extend or reopen the comment period for BIS’s previous request for comments on the interim final rule.

Customs Broker License Exam (CBLE)

From the CPB website

Announcement – Customs Broker License Exam Date

The next CBLE will take place on Wednesday, April 27, 2022. Exam registration will open on Monday, February 28, 2022 and close on Monday, March 28, 2022.

The April 27, 2022 CBLE will be offered on-site only; U.S. Customs and Border Protection (CBP) will not offer a remote exam in April 2022.  CBP is dedicated to the ongoing modernization of the CBLE and intends to offer a remotely-proctored option at a later date.

If you are planning to take the exam and would like some study tips contact mitch@adhoclogistics.com