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.

I’ll never forget basic training at Fort Bliss, Texas, but let me suggest a much easier program. My background also includes a number of years as a corporate trainer. So I understand that in 2020 most companies were required to cut costs, including the training budget, and staffing cuts were often made at the same time. Remaining staff took on additional duties and performed out of their comfort zone with few opportunities for training.

This is not the time to risk logistics service failures or customs delays which can cost you business. Some basic training with practical “how to’s” is in order. We can help!

I have developed “A to Z of Managing Logistics”, a brief presentation designed for managers who wear several hats and must oversee logistics among other duties. The steps outlined in the presentation are also valuable in training new logistics employees.

If interested contact:

mitch@52.91.45.227

Dean Maciuba•

I was saddened to hear about the mass shooting at a FedEx Ground operations facility in Indianapolis. Since that time, I have seen some incomplete reporting in some cases. Here is my experience as a previous employee at FedEx for 35 years:

1) FedEx has robust security protocol in place at their ground operations facilities, including secured access and metal detector type scanning processes at many bldgs.
2) FedEx Ground does not skimp on security.
4) Cell phones are banned as a safety measure to prevent distractions at hubs/terminals, that could result in injury to employees.
5) Background and criminal checks are performed on all new employees.
6) FedEx has very close relationships with local and national law enforcement agencies.

Mitch Kostoulakos, LCB Licensed Customs Broker, International Logistics Consultant

As a former FedEx employee (18 years) I know that the safety of team members is at the top of their list of priorities. I mostly avoid politics on LinkedIn but this is a national problem. Thoughts and prayers are not working. We need real solutions.

I often hear from clients about shipments “stuck” in customs and, needless to say, they are always frustrated. The shipments may include critical parts needed for an equipment or plant shutdown, expensive high tech components not generally carried in inventory, or medical instruments for hospitals. Delayed orders also mean delayed payments which gets everyone’s attention.

The data used in customs entries comes directly from the commercial invoice for the transaction. All countries have different, and sometimes obscure, customs regulations. It is true, however, that most delays are caused by a few commercial invoice errors or omissions.

Commodity descriptions should answer the questions: What is it? What is it made of? What is it used for? Use plain language which can be understood by anyone. Avoid trade names, brand names, and jargon. These can be added below the description or to the packing list as needed. If using a harmonized code enter only the first 6 digits which are universal. All countries apply their own last 4 or 6 digits.

Value for customs may appear to be too low for the commodity being shipped. The customs agencies in the destination country need to make sure that duty rates are accurate and will hold up the shipment if in doubt. Make sure that your commercial invoice reflects the correct transaction value.

Recipient contact info is often lacking on the commercial invoice. Customs in the importing country will not contact the exporter if they have questions or issues. If they are unable to contact the importer the shipment will go into storage. Make sure you include recipient name, address, phone number, and e mail address on your CI.

Contact mitch@52.91.45.227 for immediate assistance.

Freight forwarders are essential logistics service providers in international trade. The functions performed by forwarders make it possible for any business to export their products without a large staff. In recommending forwarders to clients I always emphasize the importance of maintaining a good business relationship with providers. It is important to note, however, that primary responsibility for compliance with the EAR falls on the “principal parties in interest” (PPI) in a transaction. This usually means the US seller and the foreign buyer.

Here is some useful info from BIS:

Responsibilities of the Forwarding Community

Forwarding agents have compliance responsibilities under the Export Administration Regulations (EAR) even when their actions are dependent upon information or instructions given by those who use their services. However, hiring an agent, whether a freight forwarder or some other agent, to perform various tasks, does not relieve a party of its compliance responsibilities.

Agents are responsible for the representations they make in filing export data. Moreover, no person, including an agent, may proceed with any transaction knowing that a violation of the EAR has, is about to, or is intended to occur. It is the agent’s responsibility to understand its obligations.

Primary responsibility for compliance with the EAR falls on the “principal parties in interest” (PPI) in a transaction. Generally, the PPIs in an export transaction are the U.S. seller and foreign buyer. 

Contact mitch@52.91.45.227 for immediate assistance.