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,

IS THIS BUSINESS FOR YOU

Mitch Kostoulakos, LCBLicensed Customs Broker,

USMCA (New NAFTA) on hold?

Delay the USMCA? Business Leaders Call for Postponing Implementation of the ‘New NAFTA’natlawreview.com

Dean Maciuba 

Marek, I disagree with your comments regarding legacy mind-sets at UPS/FedEx as both are well run companies and have huge customer bases to serve. There enormous size, much larger than European carriers, make it harder to implement change, yet both carriers are changing dramatically.  Cultural consumer differences do drive how US consumers use/access carrier resources versus European based consumers, like how consumers use access points, but things like parcel locker availability/usage are just a small part of both carrier’s global networks. Look at the size and scope of FedEx/UPS global operations, with both carrier’s operating in every European country and practically no European carriers operating in the US. Also, FedEx is the largest cargo carrier in the world and no single European carrier can match UPS/FedEx reach, FedEx being the largest cargo carrier on the planet. Both carriers do have legacy cost issues that they are both addressing and FedEx will adjust to the Amazon threat. Now, the USPS is struggling with numerous organizational problems. 

Mitch Kostoulakos, LCB   

Dean, your posts have described how UPS and FedEx are making dramatic changes. Certainly these changes are like turning an aircraft carrier due to the size and scope of these operations. Legacy mindset does exist but it can also be a positive factor in establishing the values and culture of service in both UPS and FedEx.

Ad Hoc Logistics recently completed a project for a Massachusetts manufacturer consisting of an extensive parts list “scrub”. We analyzed the harmonized codes and descriptions used for their imports, checking codes for validity. We then reviewed catalog descriptions and specs for all parts. Here is what we found:

10% of harmonized codes were invalid or out of date.

21% of parts had descriptions which were not relevant for the codes listed even though the codes were valid.

Our report to the client included recommendations for changes to the parts list with up to date and more accurate harmonized codes.

Invalid harmonized codes and descriptions can result in customs delays and possible exposure to fines and penalties. Why not give your parts list a good scrub?

Need help? Contact mitch@52.91.45.227

Michael DeMarco • 1stComplete Logistics and Freight Forwarding Professional

How do we Accurate Logistics Group make a difference to our customers that most cannot? Well, lets give you 2 real life examples. S

Mitch Kostoulakos, LCB   Licensed Customs Broker, International Logistics Consultant

Mike, nice job describing your value prop. Everyone in the business says that they provide great service. You took it one step further.

I am honored to accept appointment to this committee.

Dear Mr. Mitch Kostoulakos,

On behalf of the Transportation Research Board (TRB), I am pleased to offer you the following appointment:

Member, Main Member Slot — Standing Committee on International Trade and Transportation — AT020

NOTE: The name and code of this committee may be subject to change due to the committee restructuring scheduled to go into effect after April 15th.

Term – April 15, 2020 – April 14, 2023

TRB is one of seven program units of the National Academies of Sciences, Engineering, and Medicine, which provides independent, objective analysis and advice to the nation and conducts other activities to solve complex problems and inform public policy decisions. Members of the National Academies’ technical committees serve as individuals, not as representatives of the organizations by which they are employed or of which they may be members. Through their appointment, members agree to actively participate in and support the committee’s activities, including those that will require volunteer work. More information about the roles and responsibilities of committee membership is available at http://onlinepubs.trb.org/onlinepubs/dva/memberguide.pdf

The current business environment has a post 9/11 feel to it. LSP account executives are off the road along with everyone else. Operations and customer service are disrupted. I am hearing the frustration from providers and their clients. The challenge for account execs is to maintain their account base and assist with operations and service issues without face to face contact.

This is not the time for sales pitches or cold calling. Clients are likely working from home and would not welcome this approach. Accounts execs can add value by problem solving and customer service support if clients will give them the opportunity.

My suggestions are for acct execs to hold off on the sales pitch for now and build the relationship through service. For clients, you would be smart to take the LSP rep’s phone calls and let them help you. Remember, they are trying to do their job and you can always cut the call short if it turns into a sales pitch.