Logistics, Trade Administration and Supply Chain

Tell me if you have heard this recently - we are undergoing a major digital transformation! I realize this is not a news bulletin, but one industry that is seeing the greatest impact from the digital revolution is retail. Why? Because digital is having the greatest impact at the consumer level. Retailers have already experienced the impacts of digital transformation. Just think of mobile commerce and e-commerce and how these have changed their businesses. So how can retail supply chains take advantage of these changes? The constantly changing consumer. The biggest driver of disruption in retail supply chain is the consumer. As consumers continue to grow with regard to their influence and ability to dictate how retailers service their needs, supply chains, which are foundational, will have to keep pace. We are going beyond omnicommerce and into ambient commerce. Commerce that is not only always-on but not constrained to a separate practice. Look at efforts by social giants such as F...

Analyst Insight: Global trade compliance remains a topic that most C-level executives successfully ignore. This should not be regarded as an accomplishment but as a serious corporate deficiency that will affect a company's bottom line and its ability to compete on a global basis. Ignorance of global trade compliance is no longer an option. – Beth Pride, president, BPE Global Profit & loss statements still ignore the intricacies and costs of crossing borders. True product landed cost remains buried and unexplored in most companies. The decision to market and sell products in a new country or region seldom considers how challenging it is to accurately clear goods from an export and import perspective. Now the U.S. election has brought this issue front and center. As president-elect, Donald J. Trump announced a goal to impose a 45-percent tariff on Chinese imports. At the very least, C-level executives should look at their current costs for goods sourced from China and es...

The transportation user has a wide range of services at his or her disposal that revolve around the five basic modes: water, rail, truck, air and pipeline. A transport service is a set of performance characteristics purchased at a given price and the variety of transport service is almost limitless. The five modes may be used in combination e.g. piggyback or container movement; transportation agencies, shippers' association and brokers may be used to facilitate these services; small shipment carriers like, UPS or FEDEX may be used for their efficiency in handling small packages or a single transportation mode may be used exclusively. From among these service choices, the user selects a service or combination of services that provides the best balance between the quality of service offered and the cost of that service. The task of service-choice selection is not as forbidding as it first appears because circumstances surrounding a particular shipping situation often reduce the c...

Last year proved tough for transporters on the world’s busiest trade routes between Asia and Europe. Both the sea and air markets suffered from weak demand and overcapacity as new orders of airplanes and ships continued to come on line. The container shipping market was down around three percent worldwide by volume in 2012 compared to the previous year, says Denis Sanguinetti, sea-freight procurement manager at Bolloré Logistics. Routes between Asia and Western Europe suffered the biggest drop of between seven and eight percent, he adds. Similarly, the volume of goods transported by air fell by around 2.5 percent worldwide, says Georges Van Hove, manager of airfreight procurement at Bolloré Logistics. “The air-freight market will remain weak as long as the global economic recovery is uncertain and capacity stays high,” he warns. In particular, the sea container market looks set to continue its record level of volatility as shipping companies seek to balance supply and demand. ...

When retailers managed inventory, one of the methods for inventory control was to use some form of a trigger-point method replenishment program. That is, when an item in stock is depleted to the level of the trigger point quantity, a purchase order is placed on a vendor to replenish the item. In such systems, retailers make their own forecast and inventory control rules. Alternately, retailers will replenish on a fixed cycle i.e. once a week basis and order an amount to fill designated shelf space for an item. According to the International Mass Retail Association, over 60 percent of hard goods and almost 40 percent of soft goods are under replenishment programs managed by retailers. Although retailer-managed replenishment programs are expected to continue, there are also expected to be a substantial growth in vendor-managed inventory (VMI) that is continuous replenishment. With electronic data interchange (EDI) and point of sale data, vendors can be as aware of what is on the ret...

The pace of change in manufacturing, distribution and retailing has been increasing rapidly in order to support international expansion, while in the face of a wide variety of external challenges. Uncertain economic conditions are presenting CIOs with an almost impossible task: How to transform IT in order to meet the business’s constantly changing and evolving needs while staying within budget, ensuring projects are delivered successfully, and proving new systems have a lower TCO for the ongoing business. This challenge is made more complicated because so many companies are tied into big investments in legacy systems. These behemoths resist change and are so ingrained in the business that the prospect of modernising or replacing them can be daunting from an implementation effort standpoint and challenging from a cost justification perspective. There are however a number of compelling reasons why a business should consider upgrading its legacy systems. The first is the increasing cost...

C-TPAT qualifications for air carriers: Active air carrier transporting cargo shipments to the US; Have an active Airline Code registered with CBP; Possess a valid continuous international carrier bond registered with the CBP; Have designated company official that will be the primary cargo security officer responsible for the C-TPAT program; Commit to maintaining C-TPAT security guidelines for air carriers; Create and provide CBP with a C-TPAT supply chain security profile, which identifies how the air carrier will meet, maintain and enhance internal policy to meet the C-TPAT security guidelines for air carriers. Security Guidelines for Air Carriers Air Carriers must conduct a comprehensive assessment of their international supply chain based on the C-TPAT security guidelines. Where an air cargo outsource or contracts elements of their supply chain such as conveyance, foreign facility, domestic warehouses or any other elements, the air carrier must work with these busi...

Rail carrier must have written and verifiable processes for the screening of new business partners, including the carrier's agents, sub-contracted rail carriers, service providers as well as screening procedures for new customers, beyond financial soundness issues to include security indicators. These processes apply to business partners and service providers not eligible for C-TPAT membership. Security Procedures Written procedures must be in place to address specific factors or practices, the presence of which would trigger additional scrutiny by the rail carrier. The US CBP will work in partnership with the rail carriers to identify specific information regarding what factors, practices, circumstances or risks are relevant. For business partners eligible for C-TPAT endorsement (importers, ports, terminals, brokers, consolidators, etc), the rail carrier must have documentations like C-TPAT certificate, SVI number, etc indicating whether these business partners are or are...

Rail carriers must carry out a comprehensive assessment of their security practices based on the C-TPAT minimum security criteria. Recognizing that rail carriers do not control their shippers and have a common carrier obligation to transport goods tendered to them, rail carriers shall work with their shippers on their security practices as set forth in these criteria. These minimum security criteria are fundamentally designed to be the building blocks for rail carriers to institute effective security practices designed to optimize supply chain performance to mitigate the risk of loss, theft and contraband smuggling that could potentially introduce terrorists and implements of terrorism into the global supply chain sector. Rail carriers should periodically assess their degree of vulnerability to risk and should prescribe security measures to strength or adjust their security posture to prevent security breaches and internal conspiracies. The determination and scope of criminal el...

Sea carriers must have written and verifiable procedures for the screening of carrier's agents and other service providers contracted to provide transportation services for the carrier. Sea carriers also must have screening procedures for new customers, beyond financial soundness issues to include indicators of whether the customer appears to be a legitimate business and/or posses a security risk. Sea carriers shall also have procedures to review their customer's requests that could affect the safety of the vessel or the cargo or otherwise raise significant security questions, including unusual customer demands, such as specific stowage placement onboard the vessel (beyond a request for below deck or on deck stowage). Security procedures Sea carriers must have written or web-based procedures for screening of new customers to whom they issue bills of lading, which identify specific factors or practices, the presence of which would trigger additional scrutiny by the sea ...

Sea carriers must conduct a comprehensive assessment of their security practices based on the C-TPAT minimum security criteria. Where a sea carrier does not control a specific element of the cargo transportation service it has contracted to provide, such as a marine terminal operator or a time chatered vessel with whom it has contracted, the sea carrier must work with these business partners to seek to ensure that pertinent security measures are in place and adhered to. The sea carrier is responsible for exercising prudent oversight for all cargo loaded on board its vessel, pursuant to the applicable laws and regulations and terms of this program. C-TPAT recognizes the complexity of the international supply chains and security practices and endorses the application and implementation of security measures based upon risk. Therefore, the program also allows for flexibility and the customization of security plans based on the member's business model or requirements. Security me...

Container integrity must be maintained to protect against the introduction of unauthorized materials and/or persons. At the point of staffing, procedures must be in place to properly seal and maintain the integrity of the shipping containers. A high security seal must be affixed to all loaded containers bound for the United States. All seals must meet or exceed the current PAS ISO 17712 standards for high security seals. Container Inspections Procedures must be in place to verify the physical integrity of the container structure prior to stuffing, to include the reliability of the locking mechanism of the doors. A 7-point checklist or inspection process is recommended for all containers based on the following circumstances: Front Wall Left Side Right Side Floor Ceiling/Roof Inside/Outside Doors Outside/Undercarriage Container Seals Written procedures must also elaborate how seals are to be controlled and affixed to the laden containers, to include procedures for...

In the last episode on March 2012 , we had given some brief introduction on what is C-TPAT and now, we are going to continue with the topic today which covers the requirements for importers. C-TPAT Security Criteria for Importers Importers must conduct a comprehensive assessment of their international supply chains based on the C-TPAT security criteria. Where an importer outsource or contracts elements of their supply chain, such as foreign facility, conveyance, domestic warehouse or other elements, the importer must work with those business partners in order to ensure that pertinent security measures are in place and adhered to throughout their supply chain. The supply chain for C-TPAT purposes is defined from the point of origin (manufacturer, supplier or vendor) through to point of distribution and recognizes the diverse business models C-TPAT members employ. C-TPAT recognizes the complexity of international supply chain and endorses the application and implementation of se...

The contracting of management and/or execution of a business or operational function to an external third party contractor or sub-contractor. Outsourcing can refer to either a product or service but most commonly refers to services. Outsourcing has been a feature of the business world for hundreds of years and it is simply a typical modernised term for "contracting out". Note that the business or operational function can be outsourced to either a domestic or foreign third party contractor. The key factor here is that the service be performed by an external third party contractor, not simply by a department or division of the same company. Benefits of outsourcing: the acquisition of specialized services required on a limited or temporary basis; quick solution to a temporary overload work or task; ability to concentrate on the organization's focus on its core competencies; potential to save money. Almost any business or operational function can be outsourced,...

Sourcing is the location, acquisition and management of all the vital inputs required for an organization to operate. This includes raw materials, component parts, products, spares, labour in all forms, locations and services. Sourcing is therefore a key function of any business enterprise or organization and while successful sourcing does not necessarily translate to a successful business, unsuccessful sourcing almost always translates into a failed enterprise. A key to understand sourcing is that whether it is: a product or service; purchased in small lots or large quantities; pick up by a staff member from a local store during lunch hour or send along a 10,000 mile supply chain; acquire domestically or from a foreign supplier, it is sourcing. What is Sourced? If an organization spends money on it, it is sourcing. What is sourced includes, raw materials, component parts, intermediate products, supplies, tools, machinery, equipment, motor vehicles, energy, productio...

The definition of supply chain management (SCM) presented previously suggested a number of key factors and related characteristics that are the key to successful implementation.. Those key factors are inventory, cost, information, customer service and collaborative relationships. Each of these deserves some special consideration. Inventory Managing the flow and level of inventory is a central focus of SCM and a major performance metrric to gauge success. In simplistic terms, the inventory level must be sufficient to provide acceptable customer service but low enough to minimize SCM costs. To maintain the balance between supply of and demand for inventory stock, the supply chain requires integrated management to avoid duplication among members of the supply chain. Inventory visibility as it move through the supply chain is necessary to reduce or eliminate uncertainty, which eliminates safety stocks. This includes visibility of invotry being held in warehouses and other storage ...