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.

Checking Lists Isn’t Enough for Export Compliance… Here’s Why

At the end of the academic year this post from the archives is relevant…

In the years that I have taught Supply Chain courses, many students have expressed the desire to start their own importing or exporting business. In some cases they were motivated by an interest in a particular product they encountered on an international trip. Others wanted to turn a hobby into a business. In these early stages the nuts and bolts of international logistics are less important than the product, the markets, the financing, and realistic expectations on the part of the student. As an instructor I always want to provide guidance and assistance along with real world business facts. The attached Twenty Questions are a good way to start the process,

IS THIS BUSINESS FOR YOU

From a previous post…

Reverse logistics programs are fast becoming a major requirement in 3PL and procurement contracts. Not long ago “returns” were considered a nuisance by manufacturers, retailers, and logistics providers. They were handled only as a courtesy to customers. Today, environmental legislation is forcing companies to take responsibility for waste. At the same time consumers expect clear and efficient returns programs when making purchases. The EU is leading the way on reverse logistics with strong legislation and policies. In the US reverse logistics is evolving as progressive companies realize the opportunities to enhance their public image, lower operating costs, and improve productivity. In other words reverse logistics is moving from an added cost “returns” program to a value add process. Here are some recovery options in reverse logistics*

• Reuse– inspect, clean, and use again for identical or similar purpose, value add
• Remanufacturing– dismantle and reassemble or use for parts, value add in remanufacturing w/improvements
• Recycle– sorting process for scrap, no real value add but can recover some costs

While the above  is good business practice it is difficult to plan and execute from a logistics point of view. One reason for this is uncertainty in timing and quantity of returns. Product life cycle and rate of technological innovation play a big role in timing of returns.

Successful reverse logistics implementation involves both external and internal factors. External factors include legislation, customer demand, and incentive. Internal factors include environmental concerns, strategic cost/benefits, volume and quality of returns, resources utilized, and integration and coordination.

• Customer demand– environmental responsibility is becoming a competitive necessity
• Incentive– companies need to make returns worth it for end users
• Environmental concerns– growing trend, not optional going forward
• Strategic cost/benefit– can help increase sales and asset utilization but will increase costs. Benefit is mostly long run after initial investments in equipment, design, process, and labor.
• Volume and quality– returns must be managed to avoid scrap as much as possible
• Resources– use available resources and assets as much as possible
• Integration and coordination– must use info systems to gain competencies in recovery so reverse logistics does not become a profit drain but a profit center
• Performance measures– forward logistics measures are not adequate for return logistics. Need to develop different metrics for return logistics. Ex: time required for product recovery, % recyclable/reusable at end of product life, core return rate, % product weight or volume disposed in landfills

*Global Logistics and Supply Chain Mgt by Mangan, Lalwani, Butcher, and Javadpour, 2nd Ed, John Wiley & Sons, 2012