Global Sourcing Logistics: How to Manage Risk and Gain Competitive Advantage in a Worldwide Marketplace

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