Tony Rodriguez• President & Owner, Daniel Penn Associates.

Spare parts inventory control is no cakewalk. Read part two of a series by DPA’s Kenneth Staller and learn how to contain the chaos. Let us know your experiences.

Mitch Kostoulakos, LCB  Licensed Customs Broker, International Logistics Consultant

Hi Tony, this article is very helpful. Several of my clients have added HTS (Harmonized Tariff Schedule) columns to their inventory lists as they are updated. This makes it easier to resolve customs delays in the supply chain.

Zoom meetings have mostly replaced face to face sales calls for LSP (Logistics Service Provider) representatives. This situation may be changing but, for now, I’m hearing a lot of frustration from former colleagues and clients. LSP reps are under pressure to conduct an aggressive number of zoom meetings or phone contacts per day. Activity becomes the main goal overshadowing value propositions. Indications are that this strategy will continue as it reduces costs and can increase call productivity.

Many clients are working remotely and with reduced staffing so understandably want to avoid these calls. The discussion usually includes small talk, commiseration, service issues, and client complaints about rates or surcharges. Let me suggest an alternative approach that can be an advantage for small/medium shippers. Rather than avoid the calls why not look to set the agenda and add your own value while also reducing the number of routine calls? I guarantee that you will have your LSP representative’s attention.

A common mistake made by small and medium sized clients is failing to prepare before meeting with LSP representatives. This leaves the agenda, and control, in the hands of the LSP rep. Another mistake is focusing immediately on price. Keep in mind that the lowest rate is not usually the best rate. A better strategy is to begin with value components in your discussions with providers. If you determine that they have the capabilities to provide quality services, then you can move the discussion to price.

Take a few minutes to list two or three agenda items prior to meetings with LSPs. These can include immediate issues as well as long term goals. State your agenda up front and see what happens!

ICS Global Services Limited477
Having the correct documentation is vital when importing or exporting, as inappropriate or overlooked documentation can lead to shipping delays, increased costs and business risks, such as cancelled international commercial activities.

Mitch Kostoulakos, LCB Licensed Customs Broker, International Logistics Consultant

It is a fact that most customs delays are caused by missing or inaccurate documentation.

As noted in previous posts the 3 ways to determine ECCN (Export Control Classification Number) are: 1) Self Classify; 2) Consult Manufacturers; 3) Request a BIS ruling.

ECCN is the first step in the licensing or NLR (No License Required) decision. A number of companies make their classification info available to the public. Here is the link:

Publicly Available Classification Information

https://www.bis.doc.gov/index.php/licensing/commerce-control-list-classification/publicly-available-classification-information

Contact mitch@52.91.45.227 for classification assistance.

In all of my posts about export compliance I have written that it is a mistake to leave this function in the hands of a busy shipping department. This is not a reflection on shippers. Most that I have known are hard working, diligent, and not overpaid. They are under pressure to get shipments out the door on time and with accurate documentation. It is unfair to give them regulatory responsibility, especially without authority.

Export compliance is most effective as a front end process. Risk assessment and training are executive functions. Red flag screening should be done as early in the sales cycle as possible so that resources are not wasted on problematic orders.

It is, however, a good idea to give shippers some basic export compliance knowledge as a last line of defense. The ability to spot red flags before a shipment leaves the dock could save the company from fines and penalties. Why not have shippers take advantage of BIS’s free online training? On company time of course!

https://www.bis.doc.gov/index.php/online-training-room

For help with export compliance contact mitch@52.91.45.227

Gustavo Dobles• Operations and Content Executive | Strategic Business and Operational Planning and Management | Process Improvements | Complex Project Management

On the importance of the role of manager as active coach:

“Without some way of knowing what you are doing right and what you are doing wrong, or which way is more effective and which less, you cannot improve your performance. Hence practice without provision for feedback, knowledge of the results of your effort, will not lead to skill improvement.”

From Organizational Team Building by Earl J. Ends and Curtis W. Page.

What do you think?

Mitch Kostoulakos, LCB  Licensed Customs Broker, International Logistics Consultant

Agree…clear expectations should be followed by timely (not annual) and relevant feedback including what is done well and what needs improvement. These conversations are often difficult so many managers simply fall back on their dashboard. I think dashboards are great for measuring and monitoring a process but are not a substitute for good leadership.

Following up on my last post, here are the elements of an effective Export Compliance Program:

Management Commitment, Risk Assessment, Export Authorization (Agency Jurisdiction), Record Keeping, Training, Audits, Handling Export Violations (Corrective Action), and Build and Maintain an ECP Manual.

The most important element, by far, is Management Commitment. C-Level executives must allocate resources, communicate the importance of an ECP throughout the organization, and hold everyone accountable. Without strong management commitment and involvement you will end up with a weak ECP.

I’m always amazed when clients tell me that they leave export compliance in the hands of their shipping department. Let shippers do what they do best by moving the product. Don’t expect them to be regulatory experts.

If you are relying on your busy shipping department or your logistics service provider for export compliance you are at risk. 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.

contact mitch@52.91.45.227 for immediate assistance.

This week I participated in a Mass Export webinar, “Using a Risk Based Approach to Building Your Export Compliance Program”. The presenters, Thomas Andrukonis and Eric Rudolph, demonstrated practical ideas for implementing a new ECP or improving an existing one. I found the best practices on developing training manuals and red flag screening to be most useful.

Creating a formal Export Compliance Program is a daunting task for any company so it is often deferred due to the time commitments and resources required. However, doing nothing about export compliance is not an option. There are plenty of interim steps that will reduce exposure to fines and penalties and improve the process until you are ready to build your ECP.

Contact mitch@52.91.45.227 for immediate assistance.

Business travel is likely to increase in 2021, with a corresponding need for temporary importations. Crossing borders with products for demonstration or tools of trade can be problematic. Options include ATA Carnets, Temporary Importation Bond (TIB), and entry with duty drawback.

Carnets are the simplest option. Think of a carnet as a passport or visa for merchandise. The processing system is user friendly and can be quite cost effective for a basic carnet.

Here is some info and FAQs from the International Trade Administration:

https://www.trade.gov/ata-carnet

contact mitch@52.91.45.227 for immediate assistance.

Exporters know that EEI (Electronic Export Information) must be filed in the Automated Export System (AES), also known as the Automated Commercial Environment (ACE) , which is a US Customs and Border Protection (CBP) system. Finally, the EEI replaced the old yellow paper Shippers Export Declaration (SED) a number of years ago. Got all that?

I have found that most clients are quite proficient with the system and are able to process their filings easily. In many companies, however, EEI filings are forgotten after they go through and are not audited for accuracy. If you have a formal Export Compliance Program, which is highly recommended, EEI audits are probably included. If not you are at risk for fines and penalties.

Here is an example of a common filing error for which you may be in violation without realizing it. According to 15CFR part 30.6 the value reported in the EEI must include inland freight, insurance, and other charges to the US port of export. So simply entering the Commercial Invoice value in the EEI is a mistake unless these charges are also on the CI.

(17) Value. In general, the value to be reported in the EEI shall be the value of the goods at the U.S. port of export in U.S. dollars. The value shall be the selling price (or the cost, if the goods are not sold), plus inland or domestic freight, insurance, and other charges to the U.S. seaport, airport, or land border port of export. Cost of goods is the sum of expenses incurred in the USPPI’s acquisition or production of the goods. Report the value to the nearest dollar, omit cents. Fractions of a dollar less than 50 cents should be ignored, and fractions of 50 cents or more should be rounded up to the next dollar.

Ad Hoc Logistics can audit your EEI filings and help you avoid fines and penalties. Contact mitch@52.91.45.227 for immediate assistance.