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

If you are planning to take the customs brokers exam in April you should be well into your preparations by now. In a previous post I shared the prep strategies that worked for me. Here is the info again with the key steps highlighted. Best of luck but don’t rely on luck.

According to CBP Customs and Border Protection passing rates for the customs brokers exam average only 3-11% nationwide. The test is given twice per year in April and October. It consists of 80 multiple choice questions and a passing grade is 75%. The exam is open book which makes it seem easy. However, the books consist of  the HTUS Harmonized Tariff of the United States and CFR 19 Code of Federal Regulations, totaling hundreds of pages. The difficulty is in being able to quickly access the right section for each question. It is a four hour exam so three minutes per question is not much time.

I took a prep course but, as good as it was, I would not have been able to pass the exam without additional study. I estimate that I spent about 50-60 hours on weekends leading up to the exam.

I used 6 previous exams and a 3 step process. In step 1 I took each test for accuracy, ignoring the clock. In step 2 I took the tests again in the same order, while timing myself to make sure I could finish within 4 hours. I believe that step 3 was the key to my success. For this phase I circled all the questions I had missed in steps 1 and 2 and created a separate mini exam which I took several times until I answered all the questions correctly.

Incoterms are an important component of international trade. A good commercial invoice includes clearly specified Incoterms. Take the time to review your international documents for accuracy. Here is a primer from the archives on Incoterms. For help contact mitch@52.91.45.227

Incoterms are rules used to facilitate global trade. Incoterms were created and are administered by the International Chamber of Commerce and are updated every 10 years. Incoterms 2010 published by ICC Services Publications, Paris FR is a very good reference. Some of the important points covered in the book are:

• Incoterms must be in the contract of sale to apply
• > 120 countries have endorsed Incoterms 2010
• Now 11 rules in 2 groups
• 2 new rules deal with geographic place
• Incoterms is not a law…older versions can be used as long as all parties agree
• Incoterms replaces Uniform Commercial Code (UCC) in domestic commerce
• for reference  www.iccbooksusa.com
• Incoterms cover;
  • Who does what
  • Who pays for what
  • When risk of goods passes from seller to buyer
  • Who is responsible for insurance, export clearance, import clearance, and other costs pertaining to delivery of goods
• Incoterms do not cover;
  • Ownership or title to goods
  • Payment terms
  • Detailed requirements
  • Complete contract of sale

Incoterms 2010 includes several rules changes:

• Now referred to as rules not terms
• Remove DAF DES DDU DEQ
• New Rules  DAT DAP
• 2 Groups…Any Mode and Ocean/Inland Waterway Only
• Any Mode…EXW FCA CPT CIP DAT DAP DDP
• Ocean or Inland Waterway Only…FAS FOB CFR CIF

Attached chart is a quick guide to Incoterms 2010

Incoterms 2010 Quick Reference Chart 120610

A Behind the Scenes Look at Incoterms

EXW. FCA. CPT. CIP. DAT. DAP. DDP. FAS. FOB. CFR. CIF. My guess is you know what these three-letter codes mean (or at least have a vague idea). But do you know how they came to be in the first place? Check out this article to find out more: http://hubs.ly/H01hC7F0

• Laurie Denham CTL, CAE

  Thank you Mitch, yes, all active CTL holders will keep their designation and it will continue to be recognized by our new organization APICS.. As a professional development organization, we encourage you to seek the CLTD when it is released next June so you can be current in your knowledge base. I hope to see you at APICS 2016 in Washington, DC.. September 28-30, 2016!

• Mitch Kostoulakos CTL,LCB

  Hi Laurie, thanks for your response. While the CTL will be recognized it does seem to me that it will lose value. Those of us who have earned the CTL have passed 5 or 6 tests and may have also completed a creative component. This is a far greater commitment than the 1 test for the new CLTD. I believe that APICS should recognize this difference and award the CLTD to all CTL holders instead of asking us to prove our professionalism again. I think other CTL holders will agree. Regards.

When AST&L (American Society of Transportation and Logistics) announced their merger with APICS earlier this year I posted the question, “What About My CTL?”.  Here is some info from the APICS website announcing the end of the CTL process and leading to more questions. I would like to hear from other AST&L members especially since I just completed the re-certification process.  Here is what I would like to know:

APICS says prior earned certifications will remain valid. Valid for what exactly?

Will CTL holders be grandfathered in the new APICS logistics certification? I certainly hope so.

contact mitch@52.91.45.227

Comment on LinkedIn article by Adrian Gonzalez :  Is XPO Logistics Biting More Than It Can Chew?

Interesting article. As Adrian points out the industry is consolidating and some 3PL’s are shifting from asset light to asset heavier. Clients would be justified in questioning their 3PL’s objectivity in selection of transportation services where the 3PL owns carriers. If the 3PL is to truly manage the outsourced logistics functions there needs to be a firewall between consulting and LTL services.

According to CBP Customs and Border Protection passing rates for the customs brokers exam average only 3-11% nationwide.

Most people who plan to take the exam opt for some training either in a face to face class or online. I took a great class and supplemented it with my own prep process.  I estimate that I spent about 40-50 hours on weekends leading up to the exam. I used 6 previous exams and a 3 step system. In step 1 I took each test for accuracy, ignoring the clock. In step 2 I took the tests again in the same order, while timing myself to make sure I could finish within 4 hours. I believe that step 3 was the key to my success. For this phase I circled all the questions I had missed in steps 1 and 2 and created a separate mini exam which I took several times until I answered all the questions correctly. This method worked well for me. I would be happy to discuss with anyone. Good luck!

contact mitch@52.91.45.227

From the archives..

Measuring and managing logistics performance is a full time job for logistics professionals. The volume of data can be daunting. Managers in other functions such as finance, marketing, or manufacturing may need a quick view of logistics data as it relates to their responsibilities. Here are a few general measures for the dashboard. Please let me know of others you have used. For help with logistics planning contact mitch@52.91.45.227 .

Absolute Performance- monitor absolute logistics failures rather than averages. For example, 99.5% on time performance appears very good. However, in a high volume operation, it could mean hundreds or thousands of late orders per day.

Inventory Turnover- common measurement in asset mgt.

Order Fill Rate- customer service and warehouse productivity measurement. Can also use item, line, or value fill rate.

Warehouse Utilization %- indicator of good asset mgt.

Warehouse Productivity- measure of units received, stored, picked, packed, and shipped per hour.

Order Cycle – reduced order cycle means less inventory in the system and greater customer satisfaction. Longer order cycle means more inventory in the system and reduced customer satisfaction.

Lost Sales- inverse relationship with inventory. Higher inventory costs, lower risk of lost sales. Lower inventory costs, higher risk of lost sales.

Transportation costs- always a trade off…. bulk shipments can reduce transportation costs but leads to higher inventory levels in system. Higher transportation costs due to mode shift (air vs. ground or air vs. ocean) can reduce inventory in system by shortening the order cycle.

Commodity value- higher dollar value means increased transportation, inventory, and packaging costs.

Density of product- High density (lbs/ cubic ft or kgs/ cubic meter) means lower transportation and inventory costs since the product takes up less space in containers or warehouse.

Loss and Damage- greater susceptibility to loss or damage means higher transportation rates and higher warehousing costs due to special handling.

Location Decision- Distance from sources or markets = relative advantage or disadvantage vs. competitors. This is an upper mgt responsibility.