Mitch Kostoulakos, LCB commented on thisDavid J. DiSanto • 1stDiSanto & Associates, Inc. Consulting in Supply Chain Analysis & Optimization2w •

The airline said it’s starting to see signs people are flying again. United expects passenger revenues to grow 50% to 100% between June and July, though that will still be down as much as 88% compared with last July, normally part of the busy summer travel season.

United Taps Frequent Flyer Program for $5 Billion Loan as Air Travel Remains Sluggish….United Airlines is using its frequent flyer program to borrow $5 billion as passenger travel, which ground to a near-halt during the COVID-19 pandemic, starts to pick up but remains far short of a typical summer travel season. The loan secured by its…

Mitch Kostoulakos, LCB   Licensed Customs Broker, International Logistics Consultant

EU is not an option for Americans right now

The economic downturn we are experiencing will no doubt result in some consolidation in the Logistics Service Provider (LSP) industry. For clients who are planning to change providers this is a good time to establish service standards that are relevant to their operations. For example, on time service standards are basic and common to all LSPs .

Most logistics service providers present clients with monthly reports touting their on time delivery percentage. It is easy to become complacent when LSPs routinely report 97-99% on time service after taking exceptions for weather and other factors.

Why not challenge them to measure absolute performance failures instead of percentages? In a high volume operation even a small percentage can mean a lot of late shipments and unhappy customers. In a smaller operation with fewer customers every shipment is critical. If LSPs can track and report percentages they should be able to do the same for absolute numbers of shipments. FedEx has measured absolute performance for years.

Finally, if you are an LSP, remember that you have a client on both ends of the shipment, so service failures have twice the impact. Different metrics are like fresh eyes on an operation.

Need help? Contact mitch@52.91.45.227

Liz Ryan • 3rd+Founder and CEO, Human Workplace; Author, “Reinvention Roadmap”

“Fake fun” at work has nothing in common with real job satisfaction. “Fake fun” is insulting and annoying. One of the worst things HR people, CEOs or anyone else can do is to pretend that “fake fun” will make your workplace a great place to work.

I don’t need a foosball table or free beer on Friday nights – I need

RESPECT
FAIR PAY
CLEAR DIRECTION
THE RIGHT EQUIPMENT AND TOOLS
APPROPRIATE TRAINING FOR MY JOB
RESPECT FOR MY PERSONAL TIME
THE LATITUDE TO DO MY JOB
TO BE ABLE TO SHARE MY OPINION WITHOUT WORRYING THAT DOING SO WILL HURT MES

Mitch Kostoulakos, LCB   YouLicensed Customs Broker, International Logistics Consultant

Excellent Post Liz. HR departments spend a lot of time and money trying to “motivate” thru games, cheerleading, and lucite awards. I have taught performance management seminars featuring the points on your list. These are the true motivators.

Zoom meetings are replacing face to face sales calls for LSP (Logistics Service Provider) representatives and I’m hearing a lot of frustration from former colleagues and clients. LSP reps are under pressure to conduct an aggressive number of zoom meetings or phone contacts per day. Indications are that this strategy will continue as it reduces costs and may increase sales productivity.

Clients are often working remotely and with reduced staffing so understandably want to avoid these calls. The discussion usually includes small talk, commiseration, service issues, and client complaints about rates or surcharges. Let me suggest an alternative approach that can be a big plus for small/medium shippers. Rather than avoid the calls why not look to set the agenda and add value while also reducing the number of routine calls? I guarantee that you will have your LSP representative’s attention.

A common mistake made by small and medium sized clients is failing to prepare before meeting with LSP representatives. Another mistake is focusing on price. A better strategy is to emphasize value in your discussions with providers. If you determine that they have the capabilities to provide quality services, then you can move the discussion to price. Consider: if simply asking for lower rates can result in transportation savings, how much better would the result be with a little preparation? Here are some suggestions from someone who has spent many years on the LSP side of the table.

Determine your specific transportation needs and goals ….for example

• Price- compare net rates (not % off because base rates differ), minimums
• Transit Times/Reliability- including pick up and delivery, terminal services, linehaul
• Inventory Costs- reduced transit time = reduced inventory costs… how transportation adds value
• Product Differentiation- faster, better service as a marketing tool
• Capability/Access- carrier has right equipment in right place at right time
• Security- carriers claim ratio and loss/damage experience
• Relationship- responsiveness and problem solving protocols

Analysis Prior to Negotiation

There is not much advantage to withholding your shipping profile from providers. Because the industry is so competitive you will get a better deal if LSPs know what volume they are bidding on and any specific service requirements. If this information is not available to them they will hedge their bets and be less aggressive in their offers. Gather some data and present it. This will give you professional status in the eyes of your providers. Here is some minimum information needed. Most of it can be found in bill of lading or invoice files.

• Volume/Frequency- # of shipments per day, week, or month
• Weight- average weight per shipment
• Dimensions- standard dimensions, if any… palletized or non palletized…pictures are helpful
• Heaviest Shipping lanes- domestic and international
• Services- priority or economy, express or deferred
• Density- pounds per cubic foot ( for motor carriers)
• Classification- NMFC item numbers (for motor carriers)
• Dimensional Weight or Dim Factor (for air freight forwarders)
• Packaging type- transportation only, display, labeling
• Freight Payment Terms- prepaid, collect, third party
• Control- Who has authority to sign an agreement? Who makes routing decisions?

Request for Proposal/Request for Quotation

A formal RFP or RFQ is an effective way to both reduce transportation costs and gain the value that you need from your carriers. Ad Hoc Logistics can prepare your RFP/ RFQ, get it to the appropriate transportation providers, and even negotiate on your behalf. Contact mitch@52.91.45.227

My background includes a number of years as a corporate trainer. So I understand that in an economic downturn one of the first cuts is to the training budget. This is problematic because staffing cuts are often made at the same time. Remaining staff will be taking on additional duties and performing 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 need to oversee logistics without devoting too much time to it. The steps outlined in the presentation are also valuable in training new logistics employees.

If interested contact:

mitch@52.91.45.227

Posted on LinkedIn

Brexit is not going away…
While the pandemic is dominating all news feeds, the Brexit deadline steadily approaches. Big questions remain unanswered. How will trading partners manage relationships and logistics with both the UK and EU as separate entities?

Logistics Trends & Insights LLC

FollowAmazon Air’s freighter fleet projected to hit 200 in 2028 which, if it happens, can definitely rival UPS and FedEx. If true, how will this change the air express market? How will it impact Amazon’s relationship with UPS?

Mitch Kostoulakos, LCB   Licensed Customs Broker, International Logistics Consultant

200 aircraft would be less than half the size of the FedEx fleet

Compliance is about attention to detail, consistency, process, and oversight. I guarantee that your compliance folks are not trying to practice “sales prevention”. The goal is to complete transactions the right way and avoid customs or logistics delays and possible exposure to fines and penalties. However, there is no doubt that complying with all of the agencies involved in international trade generates a lot of red tape and can be frustrating.

Consider just a few of the details that can make or break a smooth transaction:

Harmonized Codes to the full 10 digits including heading and sub heading. It is very easy to transpose digits.

Schedule B Codes, ditto

ECCN , Alpha numeric, number, letter, followed by 3 numbers. Example 4A994. Then followed by sub paragraph level and don’t forget the dot between the last number and the sub para.

License Exceptions are designated by 3 letter codes and must be compatible with the ECCN listed.

COO, Country of Origin markings and proper codes on documents and AES filings. Best not to guess here. Have you ever entered CH for China?

Valuation must be determined accurately and is best covered in a separate post which I have done on 05/09/2019.

These are just some of the basics. We could also mention commodity descriptions, red flag screening, incoterms, and plenty of other details. So, hats off to the compliance teams.

For assistance contact mitch@52.91.45.227

The public health crisis and resulting economic decline calls to mind the term “wicked problem” from a noted supply chain management text*. We can consider supply chain to be strategic while logistics is more tactical. Fortunately, most logistics problems do not fall into the “wicked” category. Supply chain is more complex and problems are more difficult to solve.

A wicked problem involves multiple stakeholders, each with different interests and values. As a result there is no single common goal , no clear mission, and no universal solution. Any solution, after being implemented, will generate waves of consequences and can result in making the problem worse.  A suggested framework for tackling a wicked problem consists of 4 levels of increasing complexity:

Level 1- Process Engineering and inventory management– This is the engineering approach focusing on what is being carried (work, cash, information) and process design within and between organizations. Risk management is about improved visibility and control.

Level 2- Assets and Infrastructure- This is the insurance and financial approach. Nodes and links are examined and strengthened to avoid disruptions along the supply chain.

Level 3- Organizations and Inter-organizational networks– this is strategic level problem solving involving outsourcing, partnering, and offshoring.

Level 4- the Macro Environment- This level uses PEST  (Political, Economic, Social, and Technological) analysis of environmental changes. Issues include green and legal/regulatory as well as geo political factors.

*Global Logistics & Supply Chain Management by John Mangan, Chandra Lalwani, Tim Butcher, and Roya Javadpour

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The current pandemic and economic upheaval will lead many people to change jobs or careers by necessity. Some will make the leap to entrepreneurship and the arena of international trade. Allow me to provide a little perspective.

In my past experience teaching Supply Chain courses, many students 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, and realistic expectations on the part of the entrepreneur. As an instructor I always wanted to provide guidance and assistance along with real world business facts. The attached Twenty Questions are a good way to start the process,

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