Managing Service Providers:
Freight Forwarders, Customhouse
Brokers, and Carriers
Considerable time should be spent managing providers
and carriers. It is a critical function of the inbound supply
chain. The following points can assist with managing this
responsibility:
1. Treat them as partners.
2. Be transparent.
3. Set up systems to make sure they are fully aware of the
company’s needs and expectations.
4. Develop good relationships.
5. Gain access to senior management personnel.
6. Include technology solutions wherever possible.
7. Negotiate—pricing is relative, subjective, and variable.
8. Hold them to high standards.
9. Have them provide annual stewardship reports that
outline what they have accomplished in the past year
and an outline for the future.
10. Put the contracts out for bid every 2 to 4 years. Keep
them honest. If they are doing well, give them an ad-
vantage in the request for quote (RFQ) process, but
make sure they compete to keep the business.
11. Make sure compliance and security are built into the re-
lationship.
Lufthansa German Airlines Settles Charges Related to Unlicensed Exports
The U.S. Department of Commerce today announced that Lufthansa
German Airlines of Atlanta, GA, will pay an $18,000 civil penalty to settle
charges that it violated the Export Administration Regulations (EAR) in con-
12. Seek providers that can be more comprehensive in their
ability to handle the company’s inbound supply chain,
providing service for a wide range of needs. This will max-
imize the company’s clout for the best service and price.
This allows a con-
solidation of capa-
bilities, increasing
ease of handling
and communica-
tions and the abil-
ity to negotiate
competitive freight
pricing.
Although there is always concern about concentrating
too much in one area, in the past few years many companies
have gained certain efficiencies in this way.
nection with an unlicensed export and an attempted unlicensed export to
an entity in India on the Bureau of Industry and Security’s (BIS) Entity List.
BIS charged that between January 6 and January 15, 1999, Lufthansa
aided and abetted an unlicensed export and attempted export of Cobalt-
57, iron foil, and potassium ferrocyanide to the Department of Atomic
Energy in India, an organization on BIS’s Entity List, without the required
Department of Commerce licenses. BIS further charged that in connection
with the attempted export, Lufthansa stored the items with knowledge that
a violation of the EAR would occur.
The Entity List is a compilation of end-users that have been determined
to present an unacceptable risk of diversion to the development of weapons
of mass destruction or their means of delivery. Most exports to end-users on
the Entity List require licenses from the Department of Commerce.
“This case highlights the responsibility of international freight for-
warders and carriers to ensure they do not facilitate prohibited export
transactions for their clients,” said Wendy L. Wysong, Acting Assistant
Secretary of Commerce for Export Enforcement.
Acting Assistant Secretary Wysong commended the Boston Field Office
for its efforts in this investigation.
The Department of Commerce administers and enforces export controls
for reasons of national security, foreign policy, nonproliferation, anti-
terrorism, and short supply through the EAR. Criminal prosecution and
administrative sanctions can be imposed for violations of those regulations.
LANDED COSTS 55
CBP Working on Inbound Ocean Freight

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