Logistics, Getting Your Goods To Your Customers Efficiently
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The document discusses various aspects of logistics and supply chain management for efficiently transporting goods to customers. It covers international freight forwarding, US customs clearance, domestic transportation, and supply chain definitions. It also summarizes recommendations for international shipments which include ensuring correct paperwork, following up regularly, and being prepared for potential delays.
Logistics, Getting Your Goods To Your Customers Efficiently
- 1. Logistics, Getting Your Goods To Your Customers Efficiently….Shipping Can Take A Bite Out Of Your Bottom Line Jacqueline R. Russo Vice President North America KN Exposervice Kuehne & Nagel, Inc.
- 2. Components of Transportation International Freight Forwarding U.S. Customs Clearance Terms of Shipment/Payment (Inco Terms) DDP, DDU, Collect, Prepaid, Customer Routed Domestic Transportation (U.S. Air and Truck Freight) FUEL SURCHARGES Supply Chain Management
- 3. International Freight Forwarding Importing: If you are a U.S. Company with production or supply from abroad, what is involved to bring goods into the U.S. Exporting: If you sell goods abroad, working with a forwarder can ease the transaction. *Currently, Capacity is Tight due to Low $; need to plan ahead and be flexible.-- Choose your own freight forwarder (making a selection in the U.S. allows for greater control on cost and transport.) Find out freight rates in advance, watch for hidden costs. I.e. additional handling charges on foreign side. Ask for door to door or door to port rates. Ex-Works is not a bad idea.
- 4. Import Requirements Demand complete paperwork from your supplier. If you are the supplier, learn what paperwork is required and comply to regulations. Homeland security and the TSA have changed the landscape of international freight. **FF used to offer to do all of the paperwork and it was a selling tool. This is no longer an option. Documents: - Should be in English - Should have a complete description with your harmonized tariff number. Are you familiar with the Harmonized System? Insist upon good information flow between your import/export department, supplier, freight forwarder/customs broker. Stay on top of the shipments to save costs.
- 5. U.S. Customs Clearance Types of Customs Entries Consumption (Permanent) T.I.B. (Temporary –Only goods may not stay in the U.S.– Excellent for Prototypes.) Warehouse (Bonded Area) Goods can stay in bond up to 5 years – Really only beneficial for high duty items, or goods which will be re-exported. Different than a Free Trade Zone For the Imports the Automotive Industry, most entries are consumption for ultimate distribution domestically. If you re-export, and there is a duty associated with your product, consider the Foreign Trade Zone.
- 6. Customs Clearance Process Freight Forwarder can be involved at any point in the manufacturing process. The sooner the better for efficiency. Airway Bill or Ocean Bill of Lading Complete Commercial Invoices In English with values in USD Homeland Security/TSA Longer lead times, more frequent exams, delays and extra costs U.S. Customs Power of Attorney (document which allows Customs Broker to act on your behalf) **Above must be on hand to begin Clearance
- 7. U.S. Customs Bond All U.S. Customs Entries Require a Bond SEB – Single Entry Bond (This bond is written on an entry by entry basis to cover a particular shipment.) Rates for SEB’s are more expensive than a Continuous Bond. Continuous Bond – Written for a One (1) year period and covers all entries during that period. (Cost Effective if you enter more than 15 shipments per year.)
- 8. Customs Clearance Process Documents presented to U.S. Customs Electronically (ABI system) Customs replies electronically if goods are cleared or require document review Broker assembles a package of documents for presentation to Customs Goods either cleared or flagged for exam Exams are very common today Wait times for exam appointments can be significant
- 9. Customs Clearance cont. Exam complete…..goods released Your organization or forwarder arranges for local delivery. Duties are paid within 10 days either direct by you to Customs or by your broker Trend for Customers to Pay Customs Direct to ensure timely payment.
- 10. Homeland Security – Transport Wildcard Post 9/11 has brought many new wrinkles to the Customs Process. Many more exams required Customs must be notified of cargo contents prior to export on foreign side Exams sometimes required in foreign country (I.e. in Canada prior to transport to the U.S.) Delays for exam can be significant Airlines reducing free days (storage accrues even if goods are waiting examination) SS Lines backed up in West Coast and Miami (long delays for clearance and pick up possible.) Container fees as much as USD 100/day.
- 11. Recommendations Ensure paperwork is correct Follow up with shipper and forwarder regularly to answer questions and supply any needed additional documents Be prepared: Just in Time Internationally is less possible than before (Air freight may be your only option.) U.S. Warehousing is may be key to keeping the orders flowing. Stay involved in the shipment. Many companies have their foreign manufacturers control the process which can cost money and time.
- 12. Exporting If you are controlling the transport process, ensure your forwarder is aware of shipping terms. Provide clear export invoices with proper values (Export Declarations are required electronically for freight valued over USD 2500.) Ask for complete shipping rates Hint: Negotiate ocean and air rates for a variety of weights in advance. Shortages in space available air and sea therefore quote freight rates separate from your product. Again, Just In Time at risk
- 13. International “MOST IMPORTANTS” International Transportation requires attention to detail and involvement by your organization. Key to success is knowledge and participation. U.S. Customs clearance is a process in the state of flux due to security changes. Stay abreast of current conditions, ask questions. Inspections will increase until better screening equipment available. TSA going to 100% screening. The virtual world or transport involves a lot of paper. Proper documents will ease the way.
- 14. Where To From Here? Transportation Is But One STEP in Supply Chain Management
- 15. Supply Chain Definitions Supply Chain Management (SCM) as defined by the Council of Supply Chain Management Professionals (CSCMP): “Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance and information technology.”
- 16. Supply Chain Definitions - 2 Third Party Logistics Provider: A firm which provides multiple logistics services for use by customers. Preferably, these services are integrated, or "bundled" together by the provider. These firms facilitate the movement of parts and materials from suppliers to manufacturers, and finished products from manufacturers to distributors and retailers. Among the services which they provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding. Third-Party Logistics (3PL): Outsourcing all or much of a company’s logistics operations to a specialized company.
- 17. Logistics Market Observations Potential for continued 3PL consolidations Shippers continue to outsource more logistics But choose not to outsource majority of logistics operations* Continued need for collaboration between warehouse and transportation units** Driven by hours of service legislation, increasing fuel cost and customer service pressure Lengthening and complexity of supply chains Especially as more production moves to Asia & 3PLs learn to respond to growing needs of market Planning & managing inventory remains issue Visibility throughout supply chain still needed Where available, must be better used * www.eyefortransport.com ** Dr. Don Maier, Ph. D. - University of St. Francis
- 18. Global Supply Chain Execution Information Management Lead Logistics Sea Freight Air Freight Customs Brokerage Vendor Managed Inventory (VMI) Shared / Multi-client Dedicated / Contract Product Transformation & Value-add Services Freight Audit & Pay All-Modes Freight Management Carrier Selection & Management Service Logistics Reverse Logistics Planning & Monitoring Analysis & Design Risk Management & Claims Freight Forwarding Supply Logistics Warehousing Distribution Aftermarket Services Source Make Deliver Return Plan
- 19. Complete Solution for North America Manage receipt of imported goods Clear Customs Deconsolidate loads Transport goods to distribution points Store & manage inventory Basic to complex value-added services Manage outbound transportation Domestic Transborder Non-Resident Importer Maquiladora
- 20. Network Optimization Methodology Establish Baseline Analysis of What-Ifs Recommendation
- 21. Benefits of Multi-Client Warehousing Pay for only services, space & time needed Enter new markets without capital investment Outsource individual logistics operations as needed Optimize distribution network to multiple locations Manage changing distribution needs
- 22. Supply Logistics Manages flow of goods & information from suppliers into manufacturing Reduces cycle time & inventory Functional elements include: Automated replenishment of supply inventory Manufacturer & suppliers collaborate using Web tools Flow based on actual demand Inventory postponement Vendor Managed Inventory (VMI) program Value-added services to increase efficiency of I/B material flow Kitting, inspection, programming, etc.
- 23. Product Transformation / Value-added Services Transformation Kitting Subassembly Postponement Build-to-order Repacking / custom packing Value-added Inventory management Pick & pack Bundling, strapping, & wrapping Consolidation Export packing Climate control Barcode processing Pooled distribution Cross-dock services Customs bonded Literature fulfillment Cycle counts Customer system order processing EDI services
- 24. Transportation Management Multi-mode, non-asset-based Transportation Control Center for centralized: Carrier selection & management All modes freight management Freight audit & payment Risk management & claims Best-in-class transportation management system (TMS)
- 25. Advantages to Outsourcing Focus on core competencies (manufacturing, R&D, sales, etc) Utilize existing locations to increase manufacturing capacity or “shed the capital asset” Move from a fixed cost supply chain to a flexible, variable cost supply chain Gain access to supply chain specialists Lower overall landed cost of products
- 26. Kuehne + Nagel Overview Global provider of end-to-end supply-chain solutions 115 years of international experience 40,000 employees in 700+ offices across 96 countries Capabilities World’s Largest Ocean Freight Forwarder Manage 25M square feet warehouse space globally Manage 1.5M TEUs (containers) annually Top 5 in airfreight forwarding
- 27. MOVING FORWARD International Export and Import has become more complex but NOT impossible. Key to success is in the planning and selection of the right partners. Not every forwarder is best suited for all portions of the move. The financial possibilities are HUGE. Best of Luck! QUESTIONS?