I don’t remember this requirement when I took the CBLE more than 20 years ago. Here is a reminder for candidates to maintain radio silence about the exam until after midnight. Best of luck
Logistics managers with operations backgrounds and responsibilities typically leave finance to the accountants. Consider 3 logistics tracks of material, information, and financial. These different tracks often result in silos. When I taught International Supply Chain courses, I was very confident in the material and information flows and less so in the financial area. Fortunately, I was able to gain some knowledge and pass it along to my students through the text Global Logistics & Supply Chain Management published by John Wiley and Sons.
It has been said that accountants look back while managers must look forward. This article will identify basic financial terms and measurements relevant to logistics. The information is likely common knowledge for accountants and finance professionals.
Balance Sheet- snapshot of assets and liabilities at a particular point in time.
Income Statement- profit and loss for a defined period of time.
Cash Flow- where the money comes from and where it goes.
Obvious implications for logistics are that time is money, so shortening the supply chain or eliminating delays results in greater profit. High working capital (inventory) reduces profit. Efficient resource utilization (labor, real estate, equipment) increases profit. Cash to cash cycle is key.
Debt financing can be described as gearing. Low gearing means little or no debt. High gearing means the firm has a large proportion of debt to assets. This presents high risk for investors. It also may preclude opportunities to expand or improve operations and debt service (interest) will constrain cash flow.
International logistics involves greater risk which may include uncertain demand, unstable infrastructure and services, political instability, or currency fluctuations. Cost accounting for logistics companies is not as straightforward as for manufacturers. Services are intangible, quality can be difficult to measure, they cannot be stored (perishable), and may involve more that one provider.
Order Cycle- Short order cycle leads to reduced inventory; Long order cycle leads to increased inventory.
Cost of Lost Sales- High inventory results in lower lost sales; Lower inventory results in higher lost sales.
Transportation costs- similar tradeoffs as lost sales. Mode shifts from slower to faster (ground to air) can reduce inventory. Shifts from faster to slower (air to ocean) will increase inventory.
Commodity dollar value- High value commodities lead to high inventory, transportation, and packaging costs.
Density- High density commodities lead to reduced transportation and inventory (warehousing) costs.
Loss/Damage- commodities with high susceptibility to loss/damage result in higher costs of transportation and warehousing.
Location decision- Plant or distribution center proximity from materials sources or markets can mean relative advantage or disadvantage vs competitors. These are C- level decisions.
Here is a link to my latest Passages blog post
Hey Pete – under 30 licensed customs broker chiming in 👋. The high cost of the training courses are a huge barrier. Luckily my company sponsored me to take the test and paid for all expenses while also providing a raise in pay. That is how you incentivize young people to become LCBs. Alternatively schools like our alma maters should have a full credit elective that ends with you taking the exam. Each maritime academy has a business program full of students eager to separate themselves from traditional business students.
I also challenge the common saying that the brokers exam is harder to pass than the bar.. lawyers study for 3 years to take that test while many people sit for the brokers exam with little prep and less formal education.
Connor Helm Excellent point about the bar exam. I have no doubt that it is difficult even after 3 years of law school. Passing rates are reasonable though. Maybe a better comparison would be other license exams such as CPA.
Mitch Kostoulakos, LCB commented on this
Been a while since I poked the bear, but I’m fresh from a trip from DC and annoyed. We have a Customs Broker crisis. It’s only getting worse because of demographics. I’d like to challenge U.S. Customs and Border Protection to release some simple age statistics in tiers. What are the breakdown, by age of current license holders in the US? Assuming there are ACTUALLY around 13,000 still kicking around (I question the validity of that number), Then tell us how many are over 70, between 50 and 69, between 35 and 49 and under 34. You have that data since you have our SSNs. I’ll do some Good Will Hunting math with actuary tables and tell you, roughly how many are probably retiring and leaving this earthy plane (I love math and I have no life) Then I’ll make assumptions on the number not actually working on thier license (that number will disgust you). THEN – we look at how many take the test a year, pass it and pass the background check and get the ticket. I’m willing to bet it’s an upside down number. Want to fix it? It’s so easy…Apprenticship programs under the guidance of brokers and a system that requires time working in areas of the industry to learn the trade/Trade – then a test based more on practical knoweldge and less on repetitive questions. Being a Customs Broker is a financially and intellectually rewarding career. Stop making it so ridiculously hard to be one with your poorly conceived test. I’d also like to challenge our professional associations to help us bring more people into our tribe instead of looking for ways to monetize the new mandatory training hours. Unless we do something about this there won’t be anyone to train. Thanks for coming to my TED talk. I’ll be selling merch on your way out….#morebrokers…see more
Excellent post Pete… I am in favor of continuing ed for LCBs. My thoughts on the CBLE:
1) Can anyone name another licensing exam with such low pass rates? I doubt it. Its is easier to pass the bar exam.
2) LCBs take a look at the April 2023 exam and see if you think you could pass it.
Here is one of the easier questions from the April 2023 CBLE (Customs Broker License Exam). What’s your answer?
- Which of the following is a TRUE statement regarding the principles governing the
classification of goods in the tariff schedule?
A) For legal purposes, the Harmonized Tariff Schedule’s (HTS) table of contents,
alphabetical index, and title of sections, chapters and sub-chapters are of equal
weight to the terms of headings, relative section or chapter notes, and the General
Rules of Interpretation in classifying goods under the tariff schedule.
B) For legal purposes, under the governing principles for the classification of goods
in the tariff schedule, the Harmonized Tariff Schedule (HTS) Explanatory Notes
are required to be applied, unless the HTS headings or notes otherwise require.
C) For legal purposes, the HTS General Rules of Interpretation (GRI) principles are
applied in any sequence as long as all the GRIs are applied in classifying goods in
the tariff schedule.
D) For legal purposes, the classification of goods in the subheadings of a heading
shall be determined according to the terms of those subheadings and any related
subheading notes with the understanding that subheadings at any level are
E) For legal purposes, classification is determined according to the terms of the
headings and any relative section or chapter notes, while the table of contents,
alphabetical index, and titles of sections, chapters and sub-chapters are provided
for ease of reference.
If you are a Canadian importer or NRI (Non-Resident Importer) you will want to get up to speed on CARM: CBSA Assessment and Revenue Management, which will be fully implemented in May 2024.
I am attending a webinar on Sept 19th to be briefed on CARM so that I can assist clients. Here is a link with more info.
Customs Brokers are often asked for “quick classifications”. In fact, it may be possible to quickly find plausible codes for clients’ commodities; but that can be malpractice by the broker. Compliance adds value through attention to detail, established protocols, oversight, and documentation. HTS classification is the first step in both export and import compliance.
Proper classification includes HTS lookup, GRI (General Rules of Interpretation) review, checking both chapter and additional notes, as well as CROSS (Customs Rulings Online Search System). For some commodities it may be necessary to consult with a subject matter expert in engineering, purchasing, or manufacturing for details about the item.
This is the procedural aspect of classification, but there is more. Most listings require interpretation of the tariff language based on experience. Finally, the process needs to be documented for future reference and parts lists updated.
Here is an example of an easy classification with no research or interpretation needed:
Here is one which is more challenging and time consuming:
8532.10.0000 Fixed capacitors designed for use in 50/60 Hz circuits and having a reactive power handling capacity of not less than 0.5 kvar (power capacitors).
For accurate classification help contact firstname.lastname@example.org.