Archive for October, 2013

Outside Experts Can Assist Shippers with Import Compliance of Goods

Wednesday, October 23rd, 2013

Written by: Stephen Hamilton, Managing Director, CLX Logistics, LLC

Importing products can be a daunting task, especially for small- to mid-sized companies with minimal logistic resources and limited internal system processes dedicated to logistic operations.  The same appropriate actions or reasonable care is required of all U.S. companies importing products to ensure correct and safe entry of merchandise into the States.  This involves correct classification of goods, payment of appropriate duties, checking what is received, maintaining required records and other compliance requirements.

In managing reasonable care in meeting compliance, importers should have an experienced in-house employee with knowledge of customs laws and regulations or employ an outside expert who possesses the in-depth knowledge of compliance regulations and processes to efficiently manage compliance requirements, reduce errors and expedite information exchange among trade partners.

Different third party resources are available to shippers:

Licensed customs broker: Contracted to assist with customs documents, rules and regulations associated with reasonable care and fees related to imported goods, customs brokers help ensure goods are cleared through customs in a compliant and timely manner.  While shippers can contract other outside experts to prepare documentation, customs brokers are the only third party that can file entry documentation on behalf of an importing client. As not all brokers can process entries at every U.S. custom ports, importers must ensure they hire the right customs broker to meet their requirements by checking their license, permit to import certain goods and other paperwork.

Law firms offer advice on a variety of custom topics including all aspects of reasonable care, negotiate broker contracts and manage broker activities, conduct training classes and guide shippers in creation of import policy and procedure manuals. Some law firms specialize in providing legal services associated with seizures and forfeitures related to imported products.

Consultancy firms or third party logistic providers (3PLs) offer a range of managed services from assessments of current compliance programs, establishment or update of best practices, broker management, record keeping, process systems and internal controls, regular audits as well as import compliance training.   These consultants offer hands-on service in managing specific aspects of compliance for a shipper or can handle an entire compliance program.

A 3PL also can combine compliance expertise with the latest web-based technology to help importers avoid the risk of non-compliance and reduce logistics costs.  A compliance solution, supported by an web- or SaaS-based transportation management system (TMS), can dramatically improve processes, accuracy and efficiency related to import compliance without requiring any software or hardware investments by companies.   In addition to streamlining operations by integrating multiple locations, the TMS can automate communications with trade partners, record keeping and other tasks associated with compliance so companies can operate more effectively and efficiently to reduce costs, improve operational methodologies and enhance relationships with Customs.

Large multinational corporations often hire a licensed customs broker or trade compliance consultant as part of their own staff.  Smaller companies with limited budgets often turn to import consultancy firms or third party logistic companies (3PL) to contract managed services.

When using any type of outside expertise, importers should discuss their import program in detail, providing complete and accurate information about import transactions.  It is important to establish what a consultant can do and who is going to manage specific tasks to form a successful partnership.

Even if using an outside consultant, whether a broker, law firm or 3PL to assist with the compliance, the importer of record maintains full responsibility and burden of proof for compliance of imported products.

For assistance in ensuring compliance of goods, contact CLX at 215-461-3800.

 

 

 

The Power of Information

Wednesday, October 2nd, 2013

by Mike Challman, VP North American Operations, CLX Logistics

Sophocles, a Greek playwright from the 5th century BC, once wrote, “Not knowing anything is the sweetest life.”  Clearly, Sophocles never worked in supply chain management.  Those of us who have made a career of the logistics arts could write our own tragedies about the consequences of not having the right information at the right time.

What is the ‘right information’?  Seems like a simple enough question.  However, we sometimes consider some information to be important that really is not relevant to the job. Other times, we might base a decision on information that is flawed in some way or get accurate information too late to be helpful.

Some of the key attributes of meaningful supply chain information are as follows:

  • Relevant

We live in an age where technology provides us with the ability to capture data that surpasses anything we could do in the past.  Enterprise Resource Planning (ERP) systems, Transportation Management Sytems (TMS) and freight payment systems offer reams of data about your supply chain.  But, just because something can be tracked and reported doesn’t mean that it deserves your attention.  We can become enamored with information because it’s interesting.  However, ask whether it is relevant to helping improve service, reduce costs, or support other supply chain efficiency gains.

  •  Timely

Information that can support supply chain decisions or corrective action needs to be available within sufficient time to assess, understand and include it in the decision process.  Supply chains move fast so information must move at the same velocity.  For example, if a customer shipment is delayed enroute, the logistics team must have the ability to know status immediately to take corrective action or, at a minimum, notify the customer of the delay.  You don’t want to learn about a service failure from the customer.

  •  Reliable

Worse than ‘not knowing anything’ is using information that is wrong or misunderstood.   Accurate calculations are vital.  As information is often derived from multiple places (ERP, TMS, etc.), ensure that the source content and context are understood to prevent confusion.  For example, information about freight costs for a calendar month can yield different numbers from different sources.  The TMS may report on what was shipped while the freight pay system may report what was paid.  Neither is wrong, so understanding the context is critical to the reliability of the information.

  •  Objective

To steal the tagline from the 1981 film “Absence of Malice” — suppose you picked up this morning’s supply chain reports… and everything they said was accurate… but none of it was true?  Data is impartial; but, as it becomes information, outside factors may affect it so that it takes on a slant or spin.  For example, a service reliability report might state Adjusted On-Time Delivery as 99.9%.  But, what if the ‘adjustments’ excluded a type of failure important to you?  It’s essential to understand the assumptions or influences behind the interpretation of data.

  •  Cost Effective

One final question that often doesn’t get asked:  Is the information worth the cost?  Data capture, review, cleansing, correction and analysis can be time-consuming.  Report development and production isn’t free, either.  A healthy information management program will recognize that effort and expense and validate that the ‘juice is worth the squeeze’.  Periodically, reviewing what is being produced and distributed is also critical.  Over time, information that was once valuable may become unnecessary.  Finding and eliminating those relics will bring efficiency and cost control to your supply chain information management efforts.

Our business vocabulary reflects what today’s information environment has become – we talk about the ‘Cloud’, we talk about Big Data.  The incredible degree to which we can capture and report information is exciting and can provide a great competitive advantage in the management of your supply chain… if the information is kept manageable.  Focus on these five attributes and you will be able to do that.