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Mitch Kostoulakos, LCB Licensed Customs Broker, International Logistics Consultant
Well written and informative article
The last year has brought major changes in how business is conducted between logistics service providers (LSPs) and their clients. Here is what I wrote in a post just 18 months ago about managing carrier relationships:
LSPs, especially motor carriers, make extensive use of “customer entertainment” to gain and retain market share. Lunches, dinners, and sporting events are a big part of the job for carrier representatives. …..Business lunches can be productive for both parties. Clients should have an agenda with a few discussion points. Remember, as with any meeting, if you don’t have an agenda you are subject to someone else’s…… Expensive dinners and sporting events are much less productive from a business perspective. Food and drink becomes the main event. The game takes precedence at sporting events.….In summary manage your carrier relationships, Don’t let your providers “reward” you for your business. It makes it much more difficult to change providers or negotiate new deals.
In the last year entertainment and face to face sales calls have been limited. Most interaction between LSPs and clients is via Zoom or other remote methods. This no doubt makes the carrier rep’s job more difficult. The relationship must now be built on adding value and problem solving instead of entertainment. In other words the relationship becomes more professional and a little less personal. While the client may not enjoy as many lunches or dinners, negotiations and accountability may be easier.
As an independent consultant and Licensed Customs Broker my most frequent client requests are for classification help. While some commodities are easy to classify, most require research and interpretation. Here is an example of an easy one with no research or interpretation needed:
9506.69.2040 Baseballs
Here is one which is more challenging and time consuming:
8532.10.00 00 Fixed capacitors designed for use in 50/60 Hz circuits and having a reactive power handling capacity of not less than
0.5 kvar (power capacitors)
There are 3 ways to classify: 1) self classify, 2) consult with commodity manufacturer, 3) request rulings from CBP (imports) or BIS (exports).
HTS and Schedule B best practices include checking and confirming commodity classifications at least annually starting with a few universal principles:
Classification is subjective- tariff schedules do not necessarily keep up with technology
Customs definitions can differ from industry definitions
Different interpretations exist between countries and also between ports within the same country
The basic components of a best in class process are:
Break down items from universe into groups
Research- even if you think you know the correct classification
Identify necessary info needed for classification such as materials, dimensions, intended use, etc
Documentation- needed to support your determination
Automation- implementing a software classification tool will improve efficiency and productivity
On-going maintenance and monitoring for changes in HTS binding rulings and in your products is essential
Supporting documentation includes:
spec sheets, drawings, photos
info requests from engineers, scientists, chemists, etc
HTS chapter and section notes that apply to your product
explanatory notes
informed compliance publications
customs rulings that apply to your product
record keeping (5 years)
contact mitch@adhoclogistics for immediate assistance.
• Post from Eliska Mundell
Why are some Leaders still using the ‘Stick’ Management method?
Unbelievably this is true !
With everything that people have been through during 2020 and continuing into 2021, surely the methods used to push people to reach targets would have changed ?
Unfortunately no….
Whilst everyone is aware that the end of the Financial Year is looming and the race is on to secure as much business & revenue as possible, Leaders need to consider the mental health of their people.
Mitch Kostoulakos, LCB Licensed Customs Broker, International Logistics Consultant
Agree…Stick management is made worse by dashboard mgt….Tracking key indicators is essential but it is not management just measurement…Unfortunately many managers focus on the dashboard because it is easier than trying to incentivize and motivate. Dashboard data is for managing process not leading people.
Mitch’s comment on LinkedIn
The question I am continuously asked is whether Supply Chain is synonymous to Logistics. And my answer has always been clear; Supply Chain is Not Logistics, Logistics is in fact a subsection of Supply Chain.
Status is onlineMitch Kostoulakos, LCB YouLicensed Customs Broker, International Logistics Consultant9m
Agree…Supply Chain is strategic, Logistics is tactical
The economic downturn has resulted in some consolidation in the Logistics Service Provider (LSP) industry. When changing providers, or if you want to challenge existing LSPs, this is a good time to review your Key Performance Indicators. Rather than simply accepting standard KPIs presented by your LSP, consider creating your own indicators that are relevant to your operation.
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. Tracking different metrics enables you to view your operations with fresh eyes.
Need help? 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 must oversee logistics among other duties. The steps outlined in the presentation are also valuable in training new logistics employees.
If interested contact:
Check out my latest article published on LinkedIn today
https://www.linkedin.com/pulse/whats-your-agenda-mitch-kostoulakos-lcb/?published=t
Check out my article posted on LinkedIn today
Many of my clients are hard-working owners or operators of small businesses. They don’t have in-house compliance or logistics expertise so must wear several hats. Day to day activities or unexpected issues take up most working hours. As a result, functions such as logistics planning and import/export compliance are often unmanaged.
Making sure that your business is in compliance with import and export regulations is good risk management as well as good business. Think of it as insurance. I have written about compliance as risk management in previous blog posts. Here is an example:
Contact mitch@adhoclogistcs.com for immediate assistance or an initial discussion.
Status is reachableAzukaego Chukwuelue• 3rd+Supply Chain Expert (Sub-Saharan Africa) I Gender Inclusion Advocate I Thought Leadership1w •