CONTROL POINTS FOR YOUR LOGISTICS FLOW

by Mike Weiner 

How do you control your logistics flow? Do you allow your customers to dictate shipping terms? Do you understand the most economical and easy way to move your goods? Here’s a tip from a guy who’s seen money thrown away on a daily basis. Look and review where you can control your logistics flow. Whether you import or export there are a few “control points” for every transaction, work with your customer to make sure savings are realized at these possible points.

At origin, look to take control of your buying power, consolidate your buying power to leverage the best rates and services available.

If purchasing “out-of-country” ask your supplier for rates to compare. Compare against the same service and carrier – not all services are the same. Review trans-shipment points, transit times and bottleneck areas which could delay your shipment.

At destination, look to take control of the customs clearance and delivery to your site. Manage the clearance with the broker, know the documentary requirements, work with the supplier to ensure documents are in order before goods are shipped.

For drop-shipments have a good relationship with your supplier – know their production schedule, shipping schedule, how they pack goods, export formalities. Work with reliable service provider as the purchaser to control this process.

For capital projects work with very experienced niche logistics providers who have key contacts from origin factory to destination site and who you have extensively vetted via an RFI/RFQ process.

I see logistics staff ship goods on a daily basis not knowing what documents are required. For EXW terms I see exporters release their goods without questions to ABC Trucker for careless export ~ terms are EXW meaning exporters risk transfers once picked up but if product is damaged or “lost” how does this reflect on their bottom line, reputation etc… I see no communication between buyers and sellers regarding documentation on what documentation is needed for shipping and customs clearance ~ what issues does this cause? I see exporters and forwarders sending goods out with unreviewed documentation knowing full well there will be clearance issues.

For goods exported from Canada there is a publication that freight forwarders use call the “MIGRA GUIDE” ~ Why are exporters puzzled when I ask if they pay 600 CAD to invest in this valuable resource? Products are exported and imported millions of times a day globally – I would like to think all exporters or importers function at a very high level of logistics knowledge.

Unfortunately from my contact with some this is not the case. I call on the manufacturing sector to review shipping practices, develop systems to review holes and establish “logistics relationships, processes and standard procedures” with their actual customers.

Include logistics in the negotiation process. Include logistics knowledge in the sales process. Include logistics understanding in the contract process. It’s really not that difficult to set guidelines to your customer, identify proper shipping terms, review documentation and ease the pain.

I know logistics is a dirty word for many companies which think about logistics after their sale has been made. Involve logistics and customs review very early and often. Control and review your flow and control your future!

Know your INCOTERMS and the obligations, risks and cost transfer and work to combat against decreased risk and increased visibility of your cost! Know your INCOTERMS!!

-share info, build relationships-

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