Amy Breeman, MBA, LCB

I have applied to a couple of positions, along the lines of a classification specialist and trade consultant/manager. One of the key questions that I have been noticing is the amount of time it takes for you to make a classification. If for instance it is a product I had no idea about, I would do a thorough look up of the product, look up the HTS, GRI, notes, CROSS. It may take 10 to 15 minutes depending on how much a rabbit hole you can go down. I am very methodical when doing a classification, and some may call this too much time.

I had never found a question like this 5 to 10 years ago when applying for brokerage or other positions where classification was part of the job. What are your thoughts. Is this a fair question for employers to be asking?

Mitch Kostoulakos, LCB

10-15 minutes is reasonable for a thorough classification…certainly this is offset by faster classifications for commodities which are very familiar to you….better to be accurate than fast

Many of my clients are hard-working owners or operators of small businesses. They don’t have in-house compliance or logistics expertise so must wear several hats. Day to day activities or unexpected issues take up most working hours. As a result, functions such as logistics planning and import/export compliance are often unmanaged or left completely to LSPs (Logistics Service Providers).

Making sure that your business is in compliance with import and export regulations is good risk management as well as good business. Think of it as insurance. A few basic steps can make a big difference and can be implemented quickly.

Ad Hoc Logistics can provide step by step guidelines, train your employees, and set up sustainable procedures. Recent consultations included our copyrighted programs:

Exporting for Smart People- Because You’re No Dummy

Red Flag Screening

A to Z of Managing Logistics

Contact mitch@52.91.45.227 for a no obligation discussion.

Tim Wing• 1stBrokerage Growth Director at UPS Supply Chain Solutions

 Border patrol seizes thousands of fake COVID vaccination cards from Chinawww-wral-com.cdn.ampproject.org

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

Why go to the trouble to obtain a fake card? Just get the vaccination!

Clients often say “we’ve used the same harmonized codes for years” and “our products 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 need updating. If they are also 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 2020 HTS was revised 28 times. The 2021 version already lists 7 revisions. Here are the links to the changes. Don’t assume that your codes are valid. A little due diligence helps avoid problems down the road. Contact mitch@52.91.45.227 for a review of your HTS codes.

2021 Basic Revision 7

2021 Basic Revision 6

2021 Basic Revision 5

2021 Basic Revision 4

2021 Basic Revision 3

2021 Basic Revision 2

2021 Basic Revision 1

2021 Basic Edition

Planning to take the October Customs Broker License Exam? Hopefully you are well into your preparations by now. If you would like study tips contact mitch@52.91.45.227. Best of luck !

From the CBP website:

The next Customs Broker License Exam (CBLE) will be offered both in-person and remotely on Thursday, October 21, 2021. Exam Registration will open on August 23, 2021 and close on September 21, 2021.

Here are the reference materials for the exam. They will be provided electronically on exam day:

Harmonized Tariff Schedule of the United States (Basic Edition 2020) (HTSUS) Harmonized Tariff Schedule PDFs (usitc.gov)

Title 19, Code of Federal Regulations (19 CFR 2020, revised as of April 1, 2020) (Parts 1 to Part 199)(CFR 0-140)(CFR 141-199) Code of Federal Regulations (Annual Edition) | govinfo

ACE Entry Summary Instructions Version 2.4a ACE Entry Summary Instructions | U.S. Customs and Border Protection (cbp.gov)

Right to Make Entry (RTME) Directive 3530-002A 3530-002A Right to Make Entry | U.S. Customs and Border Protection (cbp.gov)

ACE Entry Summary Business Rules and Process Document (Trade-External) (ACE BRPD) (Version 10.5 – Section 1 through 12 only) March 2021 ACE Entry Summary Business Process | U.S. Customs and Border Protection (cbp.gov)

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

The current logistics environment is as challenging as I have ever seen. Tight capacity in trucking, containers not available where needed, astronomical ocean rates, and shortages of critical components. These are just a few of the problems confronting supply chain managers on a daily basis. So it is understandable that compliance may be taking a back seat at the moment. Who has the time or energy to deal with that annoying compliance person? As a proud compliance geek, let me offer the following.

Compliance is about attention to detail, consistency, process, and oversight. I guarantee that your compliance folks are not trying to practice “sales prevention”. The goal is to complete transactions the right way, avoid customs or logistics delays and reduce exposure to fines and penalties. However, there is no doubt that complying with all of the agencies involved in international trade generates a lot of red tape and can be frustrating.

Compliance managers must have the authority to stop shipments when red flags appear. In order to ensure independence compliance folks should not be in the supply chain, finance, or marketing chain of command. Better reporting relationships would be with the legal department, CEO, or COO.

Consider just a few of the details that can make or break a smooth transaction:

Harmonized Codes to the full 10 digits including heading and sub heading. It is very easy to transpose digits.

Schedule B Codes, ditto

ECCN , Alpha numeric, number, letter, followed by 3 numbers. Example 4A994. Then followed by sub paragraph level and don’t forget the dot between the last number and the sub para.

License Exceptions are designated by 3 letter codes and must be compatible with the ECCN listed.

COO, Country of Origin markings and proper codes on documents and AES filings. Best not to guess here. Have you ever entered CH for China?

Valuation must be determined accurately and is best covered in a separate post which I have done on 05/09/2019.

These are just some of the basics. We could also mention commodity descriptions, red flag screening, incoterms, and plenty of other details. So, hats off to the compliance teams.

For assistance contact mitch@52.91.45.227

Tony Rodriguez• 1stPresident & Owner, Daniel Penn Associates. LLC

Part 1 – How to get a grip on space parts inventory management for your maintenance organization. #assetmanagementinsights#maintenancestrategyhttp://ow.ly/UCd050FzfWS

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

Hi Tony, thanks for an informative post. Can I suggest adding HTS (harmonized tariff schedule) codes to the CMMS? This step can facilitate sourcing of imported parts.

Ad Hoc Logistics followers know that we always recommend an Export Compliance Program (ECP) as a best practice for companies of all sizes. At the same time, however, we recognize that implementing an ECP is a daunting task and is often a “back burner” project.

The export compliance process should begin early in the order cycle and not be delegated to a busy shipping department. However, shippers can be a last line of defense if they know the 13 key red flags to look for. Our 90 minute presentation can train your shippers on the basics.

Contact mitch@52.91.45.227 for info.

Among the many challenges faced by logistics managers in 2020, remote work became a big factor. Communication is more important than ever. I have written about the Performance Chain in previous posts and this refresher may be helpful.

The logistics industry is heavily dependent on data and technology. The most successful LSPs (Logistics Service Providers) are innovative in their efforts to improve service and productivity to the benefit of both clients and providers. The nuts and bolts of logistics also involves people, so basic front line management skills can improve operations.

Here is a proven method for the toolbox. The links of the performance chain can help with day to day management and problem solving.

Expectations– Are goals and deliverables crystal clear? Don’t assume. Feedback– Information which is specific, timely, and relevant. Not just an annual review. Resources– Time, tools, and staffing to do the job right. Skills/Knowledge– Is training needed? Managers often point to training as the solution to problems. However, if employees know how to do the job training may not be the answer to performance issues. Look to the other links of the chain. Capacity– Does the person have the physical and mental ability to do the job with training? If not, reassign or terminate, and screen new hires more carefully. Incentives– What rewards are most meaningful to the workforce? These include money, benefits, flex time, etc. and will vary for individuals. Incentives are external and provided by the company. Motivation– Internal and personal to each employee. Top performers are self motivated. For others the idea is to bring out their motivation through incentives, training, or simply clearer expectations and feedback.

New to management? The performance chain is a good starting place. Experienced manager? Old dogs can learn new tricks.

Thanks to Jack Zigon for refreshing my memory.

Contact mitch@52.91.45.227 for more info or assistance.

The US-Mexico-Canada Agreement (USMCA) went into force on July 1, 2020 replacing NAFTA. As traders know, shipping to/from Mexico is a bit more complicated than to/from Canada. In general the services of a Mexican customs broker are needed and shipments need to be transferred between US and Mexican carriers at specific ports of entry.

Some NAFTA provisions remain in effect but USMCA does contain new regulations as well. Here is a link to FAQs from the CBP website.

https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA/FAQs

Contact mitch@52.91.45.227 for more info.