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Mitch Kostoulakos commented on a discussion in Logistics Consulting.
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Mitch Kostoulakos
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More Export Compliance Basics
Many exporters automatically enter EAR 99 on their shipping documents without really knowing what this designation means. EAR 99 is a basket category for items that are subject to the EAR (Export Administration Regulations) but not on the CCL (Commerce Control List). The CCL lists “controlled” items which may require a license for export. The CCL is made up of a classification of items by ECCN (Export Control Classification Number). So a basic export compliance step is to verify if your items are “controlled” needing an ECCN or if they can be shipped under EAR 99. If an ECCN is listed you then need to determine if a license is required by checking “Reasons for Control” and destination country lists. There are 3 ways to determine an ECCN:
1) Check with the manufacturer, producer, or developer.
2) Self classify using the CCL.
3) Official request to BIS (Bureau of Industry and Security) using the SNAP-R tool @ bis.gov
Contact adhoclogistics.com for help in determining your ECCN.
Customer Service Blues
In previous posts I discussed basic logistics KPI’s such as % of on time delivery, warehouse fill rates, and loss/damage experience. KPI’s are essential to the management of logistics providers as well as 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, Tom, 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 protocols a part of your 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
Export Compliance (cont.)
In a previous post I discussed the importance of an Export Management Compliance Program. Implementing an EMCP is a major undertaking so it is often delayed for lack of resources. While you may be in this position, there are still valid export compliance steps that you can take. The first step in export compliance is to review Schedule B codes used for export and confirm that AES entries are correct. On 6/24 I participated in a Census Bureau webinar titled “The Basics of Export Compliance: Classifying Your Product”. This training proved to be a good review for me and would be very helpful for export compliance novices. Topics covered included:
- Schedule B search engine demo
- How to use headings
- Difference between Harmonized codes and Schedule B
- In depth discussion of the 6 General Rules of Interpretation
- “Essential Character” defined
- “End Use” determination
Ad Hoc Logistics can help your company with export compliance. If you need help with Schedule B codes contact adhoclogistics.com
Customs Brokers Exam- October 2014
Are you thinking about taking the Customs Brokers Exam? If so think about baseball or something pleasant until the urge passes. The exam is given in April and October. Next exam date is October 6, 2014 and registration will open on the CBP website in July. The brokers exam has proven to be more difficult to pass than the bar exam. Typical passing rates range from 3-11% nationally. Results have not yet been posted for the April 2014 exam but the passing rate for October 2013 was 11%. If you plan to take the October exam my advice is to start preparing now. I described the techniques that worked for me in a November 2013 post archived under “Nuts and Bolts”.
Contact Ad Hoc Logistics for help with logistics or regulatory issues
Recent Projects
Two recent projects involved a review of the parcel industry and an analysis of the customs broker industry with a focus on remote location filing. Both projects were for a major consulting firm.
Ad Hoc Logistics can help you control logistics costs and compliance with export and import regulations. Call 978 241-0324 or e mail mitch@52.91.45.227
Old Dog Learns New Tricks
I am well organized but I did pick up some new techniques at a Southern New Hampshire University seminar on 6/10. The seminar was “Managing Multiple Priorities and Projects” (National Seminars Training) and the presenter was Laura Simms of ProfessorDoctorMom LLC.
My background includes stints as a corporate trainer and training supervisor so I know good training when I see it. This was definitely good training. Laura is dynamic, knowledgeable, and thorough. Some of the topics covered were: Fast planning, establishing priorities, time management, and Outlook tips. Highly recommended.
Contact me for help with export compliance, customs issues, or to analyze your logistics costs.
Export Compliance
Implementing a formal Export Management Compliance Program can be quite intimidating especially for small and medium sized companies. An EMCP requires a significant commitment of time on the part of management and usually involves hiring an outside consultant for the initial set up. There is no question that a written EMCP is a good investment for any company to make. An EMCP establishes clear accountability, written instructions, and reduces risk of non compliance. If the exporter has not experienced problems or incurred any fines it is easy to make an EMCP a “back burner” issue. If your company has not implemented an EMCP it is still good business practice to take some basic compliance steps. While these steps cannot take the place of a written EMCP they will help reduce risk of non compliance. To get started I suggest the following:
- Review and confirm correct Harmonized and Schedule B codes
- Check EAR regulations for correct exemption codes and license or NLR designations
- If exporting under ITAR you need a responsible trained officer
- Check common “Red Flags” such as denied parties lists, entities lists, and unverified lists
- Review export documentation for possible improvements
Contact Mitch at Ad Hoc Logistics to get started.
Logistics Consulting Comments
Mitch Kostoulakos commented on a discussion in Logistics Consulting.
- Mitch Kostoulakos
When considering overall costs the tradeoff between transportation and inventory has big impact. Reducing transportation costs can lead to increased inventory in the pipeline.
Logistics Performance Index (Part 2)
In a recent post I discussed the World Bank Logistics Performance Index for 2014. Here is a follow up which includes the index for the years 2007, 2010, 2012 and 2014. The rankings indicate that the US lags behind EU trading partners as well as Hong Kong, Singapore, and Japan. Lowest scores are in the areas of Customs Clearance and Ease of International Shipments. US ranks fairly high in Infrastructure which is surprising.
The category Ease of Shipments refers to the ease of arranging international shipments. Ad Hoc Logistics can handle the quoting, documentation, and follow up of international shipments for your company. Contact mitch@52.91.45.227 for a free initial consultation.