International shippers have faced a perfect storm of unfortunate situations in recent months. From the longshoremen strike that brought West Coast-Asian shipping routes to a standstill, to news that China’s airports lead the world in late departures (Flights from Beijing have an 18% on-time departure rate; 28% for Shanghai), to the harsher-than-normal snowfall experienced in many regions of North America, luck has not been on the side of shippers trying to transport goods across the globe.
The good news though, is there are solutions for even the most dire of situations. Innovations throughout the logistics industry have dramatically changed the landscape for international shipments, resulting in more and better options.
Here in North America, for example, where e-commerce has fueled a spike in the number of small shipments traveling between the United States and Canada, businesses are able to offer customers guaranteed delivery times that would have been unthinkable as recently as five years ago. There are many reasons for this, including advances in route optimization, better insight into customs compliance, and efficiencies in warehouse operations.
Unfortunately though, too many shippers are unaware of these innovations. Business managers generally do not have the time necessary to keep pace with these changes, especially with regard to customs compliance and regulatory mandates. I do find though, that most managers like to have at least a cursory understanding. With that in mind, following is a brief overview of some of current “best practices” that could help improve efficiency, and possibly even reduce logistics costs.
Route Optimization. Just as the GPS in your car is able to help you move from Point A to Point B, technology is also affecting the way shipments are routed. It used to be that shipments followed very rigid transportation routes, with very little room for flexibility. As a result, shipments were sent on crazy routes that pulled them hundreds of miles off course, only to travel back until arriving at a final destination. We now see how unproductive past practices were, and thanks to route optimization technology, a shipment can travel in a much more direct route. Route optimization can allow shipments to shave days off their transportation routes, and can often eliminate the need for a distribution center stopover. Not every logistics provider has invested in this technology though, so it’s important to pay close attention and if your shipment’s route seems excessively long, you might want to ask a few questions.
International Distribution. Don’t assume that the logistics provider that does such a great job with your intra-US shipments, can replicate that same quality of service on an international basis. You’ll need to do some homework. How will your shipment be handled once it leaves the United States? Will your logistics provider maintain control/visibility, or will it be transferred to a local provider? You need to have full confidence that your shipment will arrive at its international destination on time, and in good condition.
Tariff Classification. Proper tariff classification can be a tremendous source of savings. Every product crossing an international border must bear a 10-digit classification code that is used, among other things, to determine duty liability. The code is rooted in a universally recognized “Harmonized System,” which lists codes and accompanying product descriptions. Differences between the product descriptions can be slight, but may trigger very different tariff rates. A rug that is “hand-loomed,” for example, is different from one that is “machine-loomed.” Make sure your logistics provider can ensure that your products are properly coded. Every business understands its obligation to pay duty, but there is no benefit to paying more duty than is necessary.
Trusted Trader Programs. With regard to US and Canada transactions, it is important to make certain that your logistics provider participates in government-authorized “trusted trader” programs. Both the U.S. and Canadian governments have programs in place that “reward” businesses that voluntarily agree to certify the safety of their supply chains, as well as they safety of their suppliers’ processes, and that pass a rigorous application process. These qualified businesses are known as “trusted traders,” and are entitled to significant trade incentives. In the U.S, the main program is called Customs-Trade Partnership Against Terrorism (C-TPAT), and Canada’s main program is called Partners in Protection (PIP). Membership in these programs has become standard for all top-tier logistics providers. Make sure that your logistics provider is a member. Not only will your shipment benefit from expedited customs processing, but you can also be assured that your logistics provider is highly regarded by the US and/or Canadian governments.
Expedited Services is increasingly an “option of choice,” for international shippers. A growing number of businesses are turning to expedited services for their “normal” shipping needs because of the tremendous efficiency the premium level of service affords. Expedited service offers guaranteed on-time delivery, high levels of customer service, and customized logistics solutions. In recent years, expedited service has become even more finessed at catering to international shippers:
• Customs courier. Some expeditors maintain networks of “on the ground” customs couriers who will meet a shipment at the airport, and physically transport it through the local customs process. A customs courier will be fluent in the local language, and will often be known to local customs agents. This personalized attention ensures that a shipment will not be unnecessarily delayed by any customs compliance issues.
• Charter services. International shippers are finding ways to circumvent known bottlenecks, by circumventing airports with notoriously inefficient on-time performance rates, or understaffed customs processing functions. Charter services are proving to be an efficient alternative, whereby a shipment moves through a less-busy airport, or via a destination with a less onerous customs process.
US manufacturers and retailers are truly benefiting from the “global marketplace,” with worldwide supplier networks, and growing international customer bases. Fortunately, U.S. businesses can look to their logistics providers for expertise and skillful management as they take advantage of these opportunities. Keep in mind though, logistics “best practices” seem to change every day. A good logistics partner will make sure your business is on track, with increasingly efficient processes in place.
John Costanzo, President of Purolator International, has more than 35 years of experience in the global supply chain industry. Since becoming President of Purolator International in 2001, Costanzo took the company from a small US freight forwarder to a leading provider of cross border services that offers expedited and economy Parcel and Freight Services, Transportation Management, Customs Brokerage, Warehouse and Returns Management, and more. Under his direction, Purolator International’s presence in the U.S. has grown to have operations in 30 markets in the US.
The good news though, is there are solutions for even the most dire of situations. Innovations throughout the logistics industry have dramatically changed the landscape for international shipments, resulting in more and better options.
Here in North America, for example, where e-commerce has fueled a spike in the number of small shipments traveling between the United States and Canada, businesses are able to offer customers guaranteed delivery times that would have been unthinkable as recently as five years ago. There are many reasons for this, including advances in route optimization, better insight into customs compliance, and efficiencies in warehouse operations.
Unfortunately though, too many shippers are unaware of these innovations. Business managers generally do not have the time necessary to keep pace with these changes, especially with regard to customs compliance and regulatory mandates. I do find though, that most managers like to have at least a cursory understanding. With that in mind, following is a brief overview of some of current “best practices” that could help improve efficiency, and possibly even reduce logistics costs.
Route Optimization. Just as the GPS in your car is able to help you move from Point A to Point B, technology is also affecting the way shipments are routed. It used to be that shipments followed very rigid transportation routes, with very little room for flexibility. As a result, shipments were sent on crazy routes that pulled them hundreds of miles off course, only to travel back until arriving at a final destination. We now see how unproductive past practices were, and thanks to route optimization technology, a shipment can travel in a much more direct route. Route optimization can allow shipments to shave days off their transportation routes, and can often eliminate the need for a distribution center stopover. Not every logistics provider has invested in this technology though, so it’s important to pay close attention and if your shipment’s route seems excessively long, you might want to ask a few questions.
International Distribution. Don’t assume that the logistics provider that does such a great job with your intra-US shipments, can replicate that same quality of service on an international basis. You’ll need to do some homework. How will your shipment be handled once it leaves the United States? Will your logistics provider maintain control/visibility, or will it be transferred to a local provider? You need to have full confidence that your shipment will arrive at its international destination on time, and in good condition.
Tariff Classification. Proper tariff classification can be a tremendous source of savings. Every product crossing an international border must bear a 10-digit classification code that is used, among other things, to determine duty liability. The code is rooted in a universally recognized “Harmonized System,” which lists codes and accompanying product descriptions. Differences between the product descriptions can be slight, but may trigger very different tariff rates. A rug that is “hand-loomed,” for example, is different from one that is “machine-loomed.” Make sure your logistics provider can ensure that your products are properly coded. Every business understands its obligation to pay duty, but there is no benefit to paying more duty than is necessary.
Trusted Trader Programs. With regard to US and Canada transactions, it is important to make certain that your logistics provider participates in government-authorized “trusted trader” programs. Both the U.S. and Canadian governments have programs in place that “reward” businesses that voluntarily agree to certify the safety of their supply chains, as well as they safety of their suppliers’ processes, and that pass a rigorous application process. These qualified businesses are known as “trusted traders,” and are entitled to significant trade incentives. In the U.S, the main program is called Customs-Trade Partnership Against Terrorism (C-TPAT), and Canada’s main program is called Partners in Protection (PIP). Membership in these programs has become standard for all top-tier logistics providers. Make sure that your logistics provider is a member. Not only will your shipment benefit from expedited customs processing, but you can also be assured that your logistics provider is highly regarded by the US and/or Canadian governments.
Expedited Services is increasingly an “option of choice,” for international shippers. A growing number of businesses are turning to expedited services for their “normal” shipping needs because of the tremendous efficiency the premium level of service affords. Expedited service offers guaranteed on-time delivery, high levels of customer service, and customized logistics solutions. In recent years, expedited service has become even more finessed at catering to international shippers:
• Customs courier. Some expeditors maintain networks of “on the ground” customs couriers who will meet a shipment at the airport, and physically transport it through the local customs process. A customs courier will be fluent in the local language, and will often be known to local customs agents. This personalized attention ensures that a shipment will not be unnecessarily delayed by any customs compliance issues.
• Charter services. International shippers are finding ways to circumvent known bottlenecks, by circumventing airports with notoriously inefficient on-time performance rates, or understaffed customs processing functions. Charter services are proving to be an efficient alternative, whereby a shipment moves through a less-busy airport, or via a destination with a less onerous customs process.
US manufacturers and retailers are truly benefiting from the “global marketplace,” with worldwide supplier networks, and growing international customer bases. Fortunately, U.S. businesses can look to their logistics providers for expertise and skillful management as they take advantage of these opportunities. Keep in mind though, logistics “best practices” seem to change every day. A good logistics partner will make sure your business is on track, with increasingly efficient processes in place.
John Costanzo, President of Purolator International, has more than 35 years of experience in the global supply chain industry. Since becoming President of Purolator International in 2001, Costanzo took the company from a small US freight forwarder to a leading provider of cross border services that offers expedited and economy Parcel and Freight Services, Transportation Management, Customs Brokerage, Warehouse and Returns Management, and more. Under his direction, Purolator International’s presence in the U.S. has grown to have operations in 30 markets in the US.
