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:

mitch@52.91.45.227

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

https://www.linkedin.com/pulse/got-service-mitch-kostoulakos-lcb/?trackingId=JMC%2Bbt4D7Gl3RFQmCggWnw%3D%3D

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.

An annual customs review is a good business practice. Another good practice is to make sure you are taking advantage of regulations that allow importing on a duty free or preferential basis. Here are a few basic items for your annual customs review.

 Contact mitch@52.91.45.227 if you need help.

Classification– review annual updates to Harmonized Tariff to make sure your codes and descriptions are accurate. Proper classification and valuation of imported goods are the first step in compliance. If you do nothing else, do this.

Duty Drawback– this is a refund of duties paid on imports that are later exported. As supply chains expand there may be new opportunities for drawback. Record keeping is key here.

Chapter 98 of the Harmonized Tariff allows duty free entry of certain categories of goods. Examples are: American Goods Returned, American Goods Repaired or Altered Abroad, and American Components Assembled Abroad.

Trade agreements– programs which allow duty free or reduced duty rate entries. There are many agreements (such as USMCA) in place.

Customs rulings– consider requesting formal customs rulings prior to large transactions. This ensures compliance and eliminates uncertainty about imports. Rulings can be requested thru the CBP website.

Correcting errors– when an entry mistake is discovered it can be corrected by a prior disclosure to CBP. The formal process is a Post-Entry Amendment/Post Summary Correction. A prior disclosure can help mitigate penalties.