All posts by mitch

Regulatory Updates

What Is An ECCN?

Exporters, do you know how to determine your ECCN? While it is true that the majority of exports can be designated EAR 99 and NLR (No License Required), it is important to first check for an ECCN. Here is some info from the BIS (Bureau of Industry and Security) website.

Contact mitch@52.91.45.227 for help with exports

 

Export Control Classification Number (ECCN)

A key in determining whether an export license is needed from the Department of Commerce is finding out if the item you intend to export has a specific Export Control Classification Number (ECCN). ECCNs are five character alpha-numeric designations used on the Commerce Control List (CCL) to identify dual-use items for export control purposes.  An ECCN categorizes items based on the nature of the product, i.e. type of commodity, software, or technology and its respective technical parameters.

An ECCN is different from a Schedule B number, which is used by the Bureau of Census to collect trade statistics. It is also different from the Harmonized Tariff System Nomenclature, which is used to determine import duties.

Regulatory Updates

Consolidated Screening Tool

Here is a good tool for simplifying export compliance. The Consolidated Screening Tool can be found on the BIS (Bureau of Industry and Security) website  under the Export Management and Compliance tab. This tool allows exporters to screen 11 lists in one search including: Denied Persons List (DPL), Unverified List (UVL), and Entity List (EL) as well as all other lists needed for screening.

contact mitch@adhoclogistics for help with export compliance

Have you used the new consolidated screening tool?
Screen eleven lists in one search

CSL 3

Nuts & Bolts

Comments on CTL Post

  • 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.

Nuts & Bolts

APICS discontinuing CTL program

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

 

 

The Certified in Transportation and Logistics (CTL) certification program will be discontinued at the end of this year. All candidates who are in the process of earning the CTL designation will be required to complete the program before December 18, 2015.And, all current and new CTL certifications earned prior to January 1, 2016 will remain valid.APICS is currently in the process of creating a new logistics, transportation and distribution certification program that will be launched in 2016. The designation will have new eligibility and maintenance requirements, courseware and a single exam.Under the current CTL certification individuals who successfully complete six of the following exam modules prior to December 18, 2015 will be granted the certification. All current and new CTL certifications earned in 2015 will remain valid.

Regulatory Updates

Time to get started on Export Compliance

In previous posts I have written about export compliance as good risk management. If your company has implemented a  formal Export Management Compliance Program you have reduced risk. However, even if you have not implemented an EMCP, it is still good business practice to take some basic steps which can help reduce the risk of non compliance.  To get started I suggest the following:

  • Review and confirm correct Harmonized and Schedule B codes
  • Check CCL Commodity Control List to see if your product is listed
  • Check EAR regulations for correct exception 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

For help with export compliance contact mitch@52.91.45.227

Nuts & Bolts

Comment on LinkedIn Article

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.

Nuts & Bolts

Taking the Customs Broker Exam in October?

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

 

Nuts & Bolts

Logistics Metrics…a 10,000 Foot View

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.

 

Regulatory Updates

Risk Management Includes Export Compliance

Risk management is a major concern of C-level executives for obvious reasons. While it is easy to overlook export compliance, managers should consider the financial risks of doing so. The Bureau of Industry and Security (BIS), which is part of the U.S. Department of Commerce, is charged with enforcement of export regulations. Penalties for non-compliance are steep. An export compliance program is sound business practice as well as good risk management. Here is some info from the BIS website.

  • Violations of the Export Administration Act and the Export Administration Regulations, 15 C.F.R. Parts 730-774 (2007) (EAR) may be subject to both criminal and administrative penalties.
  •  Criminal penalties can reach $1,000,000 and 20 years imprisonment per violation and the administrative penalties can reach the greater of $250,000 per violation or twice the amount of the transaction that is the basis of the violation.
  • Violators may also be subject to denial of their export privileges. A denial of export privileges prohibits a person from participating in any way in any transaction subject to the EAR. Furthermore, it is unlawful for other businesses and individuals to participate in any way in an export transaction subject to the EAR with a denied person.

Contact mitch@52.91.45.227 for help with export compliance.

Regulatory Updates

EAR 99 and NLR Revisited

When the ECCN (Export Control Classification Number) comes up on export documents most shippers automatically enter EAR 99. For license questions NLR (No License Required) is often used as a default exception. While these may be the correct entries, it is a good business practice to check and confirm. Here is some info from a previous post.

As part of any Export Management Program, exporters need to make sure they are using correct commodity classifications and license exceptions. While freight forwarders can provide expertise in these areas the exporter bears primary responsibility for compliance. If you are automatically using NLR and EAR 99 you may be at risk.  According to EAR part 732 “For items subject to EAR but not listed in CCL the proper classification is EAR 99. EAR 99 is a basket for items not specified under CCL and appears at the end of each Category on the CCL.”

For immediate assistance with exports contact mitch@52.91.45.227 .