All posts by mitch

Friday News Round Up: Global Shipping and Logistics Headlines

Newly Renamed Trade Advisory Committee Meets in DC

https://www.cbp.gov/newsroom/spotlights/2016-05-05-000000/commissioner-hosts-inaugural-meeting-newly-renamed-trade

 

The Shipping News: A Global Vessel-Sharing Deal is Brokered

 

http://www.wsj.com/articles/asian-european-shipping-lines-form-new-alliance-1463124018

 

Trending: Logistics (Finally!) Takes Center Stage

http://www.supplychainnetwork.com/logistics-is-the-new-black/

 

 

Friday News Round Up: Global Shipping and Logistics Headlines

Amazon’s Rapid Cargo Growth Continues

http://www.marketwatch.com/story/amazon-partners-with-atlas-air-worldwide-for-cargo-services-2016-05-05-101032656

 

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Attention Logistics Geeks – an interactive map of every global shipping route!

http://www.businessinsider.com/kiln-interactive-map-of-global-shipping-2016-4?r=UK&IR=T

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Union Customs Code (UCC) Implemented Beginning May 1, 2016

http://ec.europa.eu/taxation_customs/customs/customs_code/union_customs_code/ucc/index_en.htm

 

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Friday News Round Up: Global Shipping and Logistics Headlines

Norwegian Airline Gets Initial Approval to Expand US Flights

https://www.transportation.gov/briefing-room/us-dot-issues-proposed-order-norwegian-order-international

 

 

Newly Expanded Panama Canal has its first visitor:

https://www.ajot.com/news/china-cosco-shipping-vessel-wins-draw-to-be-first-to-transit-through-the-ex

 

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Coast Guard: No New Container Weight Rules Coming

http://www.wsj.com/articles/coast-guard-no-new-container-weight-rules-coming-1461953237

 

 

 

 

 

Risk Management Includes Export Compliance

All C-level executives are justifiably concerned with risk management. Best practices in export compliance will reduce exposure to steep fines and penalties. Previous posts have described the risks of non compliance with Export Administration regulations. Here is some information from the BIS (Bureau of Industry and Security) website showing details. For help with export compliance contact mitch@52.91.45.227

Penalties

Violations of the Export Administration Act of 1979, as amended (EAA), 50 U.S.C. app. §§ 2401-2420 (2000), and the Export Administration Regulations, 15 C.F.R. Parts 730-774 (2007) (EAR) may be subject to both criminal and administrative penalties. When the EAA is in effect, criminal penalties can reach 20 years imprisonment and $1 million per violation. Administrative monetary penalties can reach $11,000 per violation, and $120,000 per violation in cases involving items controlled for national security reasons. When the EAA is in lapse, the criminal and administrative penalties are set forth in the International Emergency Economic Powers Act (IEEPA).

On October 16, 2007, President Bush signed into law the International Emergency Economic Powers (IEEPA) Enhancement Act, Public Law No. 110-96, amending IEEPA section 206. The Act enhances criminal and administrative penalties that can be imposed under IEEPA and also amends IEEPA to clarify that civil penalties may be assessed for certain unlawful acts. Criminal penalties can reach $1,000,000 and 20 years imprisonment per violation and the administrative penalties can reach the greater of $250,000 per violation or twice the amount of the transaction that is the basis of the violation. See Endnote below.

Violators may also be subject to denial of their export privileges. A denial of export privileges prohibits a person from participating in any way 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.

Customs Review Best Practices

In  previous posts we have emphasized the importance of an annual review of Harmonized Tariff codes as a good business practice. Another good practice is to make sure you are taking advantage of regulations that allow importing on a duty free or preferential basis. Here are a few items for your annual customs review. Contact mitch@52.91.45.227 if you need help.

  • Classification– review annual updates to Harmonized Tariff to make sure your codes and descriptions are accurate. Proper classification and valuation of imported goods are the first step in compliance. If you do nothing else, do this.
  • Duty Drawback– this is a refund of duties paid on imports that are later exported. Record keeping is key here.
  • Chapter 98 of the Harmonized Tariff allows duty free entry of certain categories of goods. Examples are: American Goods Returned, American Goods Repaired or Altered Abroad, and American Components Assembled Abroad.
  • Trade agreements– programs which allow duty free or reduced duty rate entries. There are many agreements (such as NAFTA) in place.
  • Customs rulings– consider requesting formal customs rulings prior to large transactions. This ensures compliance and eliminates uncertainty about imports. Rulings can be requested thru the CBP website.
  • Correcting errors– when an entry mistake is discovered it can be corrected by a prior disclosure to CBP. The formal process is a Post-Entry Amendment/Post Summary Correction. A prior disclosure can help mitigate penalties.

Front Line Customer Service

Logistics service providers point to their technological solutions and KPI’s to add value for their clients. KPI’s are essential to the management of logistics providers as well as to their clients. Some customer service functions, however, are not as easy to measure. Clients of logistics providers include shippers, consignees, importers, and exporters. Whether your logistics provider is a motor carrier, freight forwarder, customs broker, or warehouse company, you will need customer service assistance from time to time. Let’s differentiate:

Request for Information– shipment status, tracking and tracing, claims status, rate requests, invoice balance. This type of customer service is best obtained on line. Take the time to become familiar with your providers’ info systems so you don’t waste time on the phone or waiting for a call back. If your provider does not offer this type of info on line they are either inefficient or very small. To avoid frustration ask yourself if you just need information or action by your provider. Information is easier to get than action.

Action Needed- This level of customer service most likely requires human intervention. Examples include customs or regulatory delays, stopping or diverting shipments, credit issues, special pricing, or real emergencies. While no one likes calling an 800 number, it is a good idea to get your request into the provider’s system as soon as possible as a first step. The difficulty is in reaching the right contact and getting the action you need. If you use a 3PL you may be able to delegate the problem for their handling and have them provide timely updates. If you do not use a 3PL, then you need to manage the issue on your own. One mistake clients make is to rely on their  account rep for all customer service. Account reps are usually on the road and in meetings so this causes delays in action. Another mistake is to depend on the super efficient Mary, Debbie, or Bill in your provider’s office. Everyone takes vacations and sick days so don’t rely on one person for your customer service needs. A better way to get good customer service is to establish protocols with the help of your providers.

Protocols- Day to day logistics consists of planning, execution, and problem solving. Good planning is essential but not foolproof. Logistics managers deal with changing schedules, equipment failures, weather delays, regulatory issues, and miscommunication on a daily basis. Most problems, however, are not new. The same situations tend to repeat themselves so they can be anticipated. I suggest developing a set of problem solving protocols for the most common issues in your supply chain. This approach will save you time since you will not be starting from scratch when a problem arises. It will also enable your colleagues to act in your absence. A basic protocol defines the problem and lists steps to be followed as well as the resources involved. Your logistics providers can help by providing resources. They should be willing and able to give you relevant operations contacts along with phone and e mail info for your identified problem areas. Your account rep may be surprised when you ask for help developing protocols but they should welcome the opportunity. This method can be a big time saver for them as well. Get commitment from your providers to respond to your requests in an agreed to amount of time. You can update the protocols as needed. Make them a part of your review meetings with your account reps and you will get better customer service.

Finally, if your account rep says “Just call me”, don’t accept this response.

We help small and medium sized companies stay compliant with Customs and export regulations and manage logistics. Contact mitch@52.91.45.227