introducing ait worldwide logistics · ait worldwide logistics presented by andrew poll, director...
TRANSCRIPT
INTRODUCING
AIT WORLDWIDE LOGISTICSPresented by Andrew Poll, Director of Sales USA, Central Region
Freight Forwarding 101 Topics
▪What is the role of a Freight Forwarder?
▪Overview of Modes Domestic and
International
▪ International Documentation Overview
▪Customs Brokerage Overview
▪ Incoterms Overview and Considerations
▪Q&A
What do Freight Forwarders Do?
The International Federation of Freight Forwarders
Association, or the FIATA, describes a Freight
Forwarder as the "Architect of Transport,”
describing the commercial position of the forwarder
in relation to its client.
Freight Forwarding Services Overview
International Air and Ocean
▪ Import and Export
▪ Expedited / Consolidated
▪ Ocean FCL / LCL
▪ Exclusive Charters
▪ Breakbulk / Project Cargo
Customs Clearance
▪ Compliance with FDA, USDA,
▪ DOT, TSA, and C-TPAT
▪ Licensed Brokers In-House
▪ Bonded Warehouse Locations
▪ Remote Location Filing (RLF)
▪ Importer Security Filing (ISF)
Transborder Service
▪ Canada: Pre-Arrival Release Systems
(PARS)
▪ Mexico: Maquiladora Expertise
Domestic Air Freight
▪ Next Flight Out / Same Day
▪ Next Day / 2-Day
▪ Weekend / Holiday
▪ Air Charters
Ground Transportation
▪ Expedited
▪ Three-Five Days Deferred
▪ FTL and LTL
▪ Hot Shot
Value Added Services
▪ Inside Pick Up and Delivery
▪ Technology-Reporting-PO Management
▪ Special Packing
▪ Skid and Band
▪ Merge In-Transit
▪ Warehouse
▪ White Glove
Domestic Services
• Same day/next flight out• Next day• 2nd day• 3 to 5 day deferred
• Truckload Brokerage/Intermodal
• Charter services
• Residential Delivery/Special services
• LTL Management
• 3PL/Warehousing
• Local Cartage
• Deconsolidation and Distribution
• Expansive US cartage footprint with our 43 stations and experienced provider network covering pickups and final mile delivery including special services
• Extensive service capacity through utilization of our growing truck network with a flexible hub and spoke strategy
• Service speed to market with deconsolidation of import product through our strategic gateways and truck network hubs designed to reduce cycle times.
• Established capacity with our strategic Airline partners for expedited air services.
• Quality Management System that defines, measures, and continuously improves the quality of service we provide
• QSI- Quality Satisfaction Initiative which drives continuous improvement and corrective action.
• Creating operating efficiencies through work flow processes and IT enhancements
• The implementation of our final mile mobile app solutions creating instant customer facing of POD’s
Leveraging A NetworkProduct Driving Quality Service
Performance
Local Pickup and Delivery
▪ Wide Variety of Services Offered
▪ Asset recovery
▪ White glove pickup/delivery
▪ Residential services
▪ Local cartage
▪ Service in All Major Metro Destination Markets in the USA
▪ 44 stations covering all 50 states
▪ Strong agent relationships in satellite markets to provide coverage beyond metro
areas
▪ Centrally-managed Agent Service Center ensures status updates and information
about your freight is readily available
▪ Robust process for vetting partners/agents to ensure security compliance with
corporate policies
▪ Quality measurements to ensure timeliness and accuracy of KPI’s
Customer Experience Cycle
Special Services – End-to-End
Final Mile
▪ Threshold
▪ Room of choice
▪ White Glove – unpack, dunnage removal
▪ White Glove Ultimate – unpack, assembly or
set-up and dunnage removal
▪ Customized assembly program solutions
Customer Service
▪ Dedicated customer service action team
▪ Bilingual online chat service
▪ Customizable SOPs, tracking and tracing
along with dedicated Control Towers
▪ Internal facing with customer
▪ External facing with consignee
▪ SharePoint blog, document management
Onboarding
▪ Operations, IT, Customer Service, Loss
Prevention
▪ Defined process, ongoing weekly internal and
external co-management
Account Management
▪ Defined metrics and goals
▪ Performance measurement
▪ QBR process – balanced scorecard
AIT Worldwide Logistics Slide 9
Domestic Air Freight
▪ Same Day/Next Flight Out
▪ Next Day
▪ Second Day
▪ Time Definite Delivery
▪ Charter Services (Domestic and
International Services)
International Air Freight
▪ Elite/NFO
▪ 24-48 hours airport-to-
airport service. Charter
▪ Heavyweight Air Express
▪ Door-to-door, time
definite
▪ Premier
▪ 48-72 hours airport-to-
airport service
▪ Scheduled departure and
arrival times
▪ Economy
▪ 5-7 days
▪ Scheduled departure and
arrival times
INTERNATIONAL AIR FREIGHT
Air Freight Product
Speed to Market service capacity
with deconsolidation of import
product through our strategic
gateways and flexible truck network
hubs, designed to reduce cycle
times.
Consolidation Services
Regional Opportunities to p/u and
move consolidated shipments from
Gateway to Gateway Markets,
gaining price and service
efficiencies.
Expansive U.S. Cartage Footprint
across the nation for pickups, final
mile delivery and special services.
Established Capacity with our
strategic airline partners to support
expedited air services as a top 5
national account with all major U.S.
airlines.
Network Leverage
Quality Management System that
defines, measures and continuously
improves the quality of service
provided.
Quality Satisfaction Initiative (QSI)
drives continuous improvement and
corrective action.
Creating Operations Efficiencies
through workflow processes and
technology enhancements.
Performance Quality
AIT Worldwide Logistics Slide 10
Quality Management System that
defines, measures and continuously
improves the quality of service
provided.
Quality Satisfaction Initiative (QSI)
drives continuous improvement and
corrective action.
Creating Operations Efficiencies
through workflow processes and
technology enhancements.
INTERNATIONAL OCEAN FREIGHT
Ocean Product Network Leverage
Unified Global Operating System
enhances efficiency and visibility of
freight in transit.
Flexible, Nimble Network capacity
and cost influence with end-to-end
reliability with the ability to optimize
capacity in all modes of
transportation.
Providing Solutions product
leaders with diverse experience that
provide customers with options
based from market intelligence.
Strategic Partnerships offer a
carrier network focused on long-term
growth with established multi-faceted
relationships throughout the
transportation industry.
Performance Quality
Seamless Transportation
▪ Import and Export
▪ Country-to-Country
▪ FCL / LCL
▪ Ocean Express Service
▪ Project Cargo
Ocean Freight
▪ Foreign Banking
▪ Sight Drafts
▪ Letter of Credits
▪ Legalization
▪ Certificate of Origins
▪ AES Direct Filing
▪ Breakbulk
▪ Out of Gauge Freight
Value Added Services
▪ End-to-End Visibility
▪ P.O. Management
▪ Landed Costing
AIT Worldwide Logistics Slide 11
International Documentation
What you need to know
AIT Worldwide Logistics Slide 12
TOPICS OF DISCUSSION
• Minimum document requirements
• Export Power of Attorney (POA) vs. Shipper’s Letter of Instruction (SLI)
• Automated Export System (AES)
• Shipper Documents: Commercial Invoice & Packing List
• Forwarder Documents: HAWB, HBL, MAWB, & MBL
• Additional Documentation
• Wood Packing Requirements
AIT Worldwide Logistics Slide 13
Minimum Documentation
Document
• SLI (Shipper’s Letter of
Instruction)
• Commercial Invoice
• Packing List
• Bill of Lading
➢ HAWB / HBL
➢ MAWB / MBL
• Customs Manifest
Prepared By
Shipper
Shipper
Shipper
Forwarder
Forwarder
AIT Worldwide Logistics Slide 14
Export Power of Attorney (POA)
• The Export POA authorizes the forwarder to
1. File AES on behalf of the USPPI
2. Issue additional export documentation on behalf of the shipper
➢ Certificate of Origin (C/O)
➢ Proforma Invoice
• Never expires unless revoked in writing.
AIT Worldwide Logistics Slide 15
Shipper’s Letter of Instruction
(SLI)
• A document that includes the shipping instructions for a particular shipment.
• Required for shipments with a value of $2500 or greater for a single Schedule B/ HTS number,
• Acts as a single shipment authorization
• Must be signed
• Recommended for all exports
AIT Worldwide Logistics Slide 16
Automated Export System
(AES)
• A joint venture between U.S. Customs & Border Protection (CBP), the Census Bureau, the Bureau of Industry & Security (BIS) the Directorate of Defense Trade Controls (DDTC), other Federal agencies, and the export trade community
• Required for any commodity code (Schedule B/HTS #) GREATER than $2,500
• Central point through which export data is submitted for review by U.S. CBP.
• Export information is collected electronically and reviewed immediately
• AES is a nationwide system operational at all ports and for all methods of transportation (Air, Ocean, Ground)
AIT Worldwide Logistics Slide 17
Commercial Invoice
1. Full exporter information
2. Full importer / consignee
Information
3. Date of export
4. Invoice number
5. P.O. number / Invoice number
6. Term of Payment (NET 30 / Wire
Transfer etc.)
7. Term of Sales (Incoterms® 2010)
8. Description of goods (units,
Schedule B/HTS code, country of
origin, unit price, & total
9. Signed BLUE ink
AIT Worldwide Logistics Slide 18
Commercial Invoice
Destination Control Statement
(DCS)
“These commodities, technology, or software
were exported from the United States in
accordance with the Export Administration
Regulations. Diversion contrary to U.S. law is
prohibited.”
• Required if items are subject to the Export
Administration Regulations (EAR)
• Excludes items classified as EAR99
• Required on invoice, bill of lading, air waybill, etc.
AIT Worldwide Logistics Slide 19
Packing List
• Details the shipment’s contents
• Required by local customs authorities if the content information is not detailed on the commercial invoice.
• Should be easily matched to the cargo
• No pricing required
AIT Worldwide Logistics Slide 20
Bill of Lading (Airway Bill)
An Airway Bill (AWB) is the document that covers all transport by air. It is issued by the carrier as a non-negotiable document serving as a receipt to the consignee for the goods. The AWB contains all the conditions of transport. House Airway Bill (HAWB) HAWB issued by a TSA freight handler who is acting as a carrier. Master Airway Bill (MAWB) MAWB is issued on airline's stationery to the TSA freight handler for all of the goods covered by one or more House AWBs. Direct Airway Bill (DAWB) A DAWB is a service where freight is transported on the airline DAWB without a HAWB. Direct shipments are generally used when freight and service needs are immediate. Freight is not consolidated with other cargo.
AIT Worldwide Logistics Slide 21
Bill of Lading (Airway Bill)
House Air Waybill (HAWB)Issued by forwarder to identify
shipper and consignee
Master Air Waybill (MAWB)Produced by forwarder to the
airline to tender a shipment or
consolidation to an airline
AIT Worldwide Logistics Slide 22
Bill of Lading (AIR Export Airway Bill)
HAWB STL
JB MFG
MAWB ORD TO AMS
Chicago to Amsterdam
HAWB MSP
Z Fashion
HAWB IND
XWZ Steel
HAWB MCI
AC Telecom
HAWB CVG
B Aerospace
AIT Worldwide Logistics Slide 23
Bill of Lading (Ocean)
House Bill of Lading (HBL)
• Issued by NVOCC to identify shipper &
consignee
• Issued in 2 ways
➢ Original
o Holder of original HBL is the
“owner” of the goods
o Must present the original in
order to receive the shipment
➢ Express Release
o No originals are required to
prove ownership of goods
AIT Worldwide Logistics Slide 24
Bill of Lading (Ocean)
Master Bill of Lading (MBL)
• Produced by steamship line
based on instructions from
NVOCC
• Issued in 2 ways
➢ Original
➢ Express Release
AIT Worldwide Logistics Slide 25
Express Release v. Original BOL
An original Negotiable HB/L is issued:
• An original HB/L is issued upon shipper request. The shipper will ask for an original to be issued usually
when he expects to be paid by the buyer for the value of the goods while the freight is in transit. (This
agreement is usually made because the transit time for ocean is so long that it allows both parties to meet
halfway: the shipper releases the freight before being paid and the buyer doesn’t have to pay out for the
goods 30 days or more in advance).
• The original HB/L is a negotiable document and always issued in 3 copies only.
• The original HB/L is issued at the port of origin by the forwarder and released to the shipper only after the
freight has departed.
• Once the shipper receives payment from the consignee, he will send the original to the buyer.
• The buyer (consignee) in turn must surrender the original HB/L to us (the destination forwarder). The only
possibility for a buyer to have an original HB/L is when he has paid for the goods and received the original
from the shipper. This is the guarantee for the shipper to get his money.
HB/L issued on “Express release”:
• It releases us the forwarder from any liability for the value of the goods.
• The goods can be released to the consignee without any further documents; a photocopy of the HB/L is
enough.
• The “express release” is a fairly new procedure (5‐6 years) that was put in place to make the procedure
less cumbersome when the buyer had already paid for the goods in advance and no further money
exchange between shipper and buyer is necessary.
AIT Worldwide Logistics Slide 26
Additional International Documentation
• Certificates of Origin
• Export Licenses & U.S. Government Lists
• Carnet
• Legalization
• Chamber of Commerce Notarization
➢AIT can help with all of the above document requirements too.
AIT Worldwide Logistics Slide 27
Export Licenses
I. U.S. Department of Commerce, Bureau of Industry & Security (BIS)
• Regulates the export of goods & related technology identified on the Commodity Control List (CCL)
• Regulates the export of commercial items with a “dual use” function
➢ Commercial
➢ Military
• Verification lists that fall under Dept. of Commerce control
➢Denied Parties List (DPL): Individuals & entities denied export privileges
➢Unverified List: End users that BIS has been unable to verify prior transactions
➢Entity List: Parties whose presence in the transaction can trigger a license requirement.
AIT Worldwide Logistics Slide 28
Export Licenses
II. U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC)
• Enforces economic & trade sanctions based on US foreign policy & national security
• License Types:
➢OFAC Specific Export License (T10)
➢OFAC General Export License (T11)
➢Kimberly Process Certificate (T12)
• Verification Lists that fall under U.S. Treasury Dept. control
➢Special Designated Nationals List: Parties who may be prohibited from export under OFAC.
➢Foreign Sanctions Evaders List: Foreign individuals & entities determined to have violated, attempted to violate U.S. Sanctions on Syria & Iran
➢Sectoral Sanctions Identification (SSI) List: Directed at Russia
AIT Worldwide Logistics Slide 29
Export Licenses
III.U.S. Department of State, Directorate of Defense Trade Controls (DDTC)
• Regulates the export of defense items & services covered by the U.S. Munitions List (USML).
• License Types:
➢ DSP-5: Permanent Export Defense Articles & Services (S05)
➢ DSP-61: Temporary Import of Unclassified Articles (S61)
➢ DSP-73: Temporary Export of Unclassified Articles (S73)
➢ DSP-85: Temporary/Permanent Import/Export of Classified Articles (S85) - Pilot is not registered to handle
➢ DSP-94: Foreign Military Sales (S94)
AIT Worldwide Logistics Slide 30
Export Licenses
III.U.S. Department of State, Directorate of Defense Trade Controls (DDTC) – Cont.
• Verification list that fall under Dept. of State control
➢AECA Debarred List: Entities & individuals prohibited in the export of defense articles, services, and technical data
• Export Control Statement (ECS): Required on all export documents (invoice & AWB)
AIT Worldwide Logistics Slide 31
Carnets
• Defined as a “merchandise passport”
• Benefits
➢ Unlimited exits / entries into the U.S. and foreign countries (valid for 1
year)
➢ Accepted in 75+ countries.
➢ Eliminate value-added taxes (VAT), duties, and the posting of temporary
import
➢ Simplifies customs procedures
➢ Facilitates re-entry into the U.S. by eliminating the need to register the
goods with U.S. Customs & Border Protection (U.S. CBP)
• Tectro/AIT carnets are required for shipments between Taiwan
& U.S.
AIT Worldwide Logistics Slide 32
Carnets
AIT Worldwide Logistics Slide 33
• International standard for wood packing material (WPM)
• Goal is to prevent the spread of plant & pest diseases
• International Plant Protection Convention (IPPC) & participating countries
maintain the requirements
• Heat Treated (HT)
• Methyl Bromide (MB) – Phasing out
Wood Packing Requirements (ISPM-15)
AIT Worldwide Logistics Slide 34
RECAP
• Check consistency between export paperwork and bills of lading
• Is AES required and who is responsible for filing
• Is the shipment a dangerous good or could it be perceived as a
dangerous good?
• Is a license, license exception, or license exemption needed?
• What additional documents are needed based on the country-specific
requirements
➢ Certificate of Origin (C/O)
➢ Chamber of Commerce (Chamberized)
➢ Legalization
➢ Wood-Packing Requirements
➢ Company Stamp / Sign in Blue Ink
AIT Worldwide Logistics Slide 35
When goods are imported into the Customs territory of the US
they are subject to certain formalities and procedures. The
goods are required to be “entered” or declared to the Customs
service, and must be in compliance with all of the rules and
regulations enforced by Customs and Border Protection (CBP).
The “entry” must contain all of the required documentation or
information, and can be sent to customs or transmitted to them
electronically.
What is Customs Brokerage?
AIT Worldwide Logistics Slide 36
Reasonable Care
• Defined as that degree of care that a person of
ordinary prudence would exercise in the same
or similar circumstances.
• Legal responsibility of the importer and his agent
(customs broker) to use in entering
merchandise.
• Mandated by the Customs Modernization Act on
December 8, 1993.
AIT Worldwide Logistics Slide 37
Who is responsible?
As part of the entry process goods must be “classified” to see
where they fall in the harmonized tariff schedule (HTS) and a
value must be determined. Per the Customs Modernization Act,
it is the responsibility of the importer of record to use
“reasonable care” to enter, classify, value and provide all
information applicable, so that CBP can: assess the correct
duty, ensure that regulations for the goods were adhered to and
get the proper statistics.
AIT Worldwide Logistics Slide 38
Reasonable Care- Importer Standards
• Consult with qualified specialists such as Customs brokers, consultants
and attorneys specializing in Customs law.
• Seek guidance from Customs through the formal binding ruling program
and then follow any binding rulings received.
• If using a broker, must provide the broker with full and complete
information sufficient enough for the broker to make proper entry or for
the broker to provide advice as how to make entry.
• Obtain analysis from accredited labs to determine the technical qualities
of imported merchandise. (Can be in-house)
• Using in-house employees who have experience and knowledge of
Customs regulations and procedures.
• Ensure that the products are legally marked with the country of origin to
indicate to the ultimate purchaser the origin of imported goods.
• Notify CBP when receiving different treatment for the same products in
different ports.
• Examine entries prepared by the broker to for accuracy in classification
and valuation.
AIT Worldwide Logistics Slide 39
Reasonable Care- Broker Standards
• Give competent advice
• Must exercise due diligence to ascertain the correctness of
information which he/she imparts to a client
• Shall not knowingly impart false information to a client
relative to Customs business.
• Shall not withhold information from a client who is entitled
to that information
• Establish internal procedures to limit advise being given, to
only those qualified licensed individuals
• Obtain and receive directly from importer, complete and
accurate information sufficient to make entry, or provide
proper advice.
AIT Worldwide Logistics Slide 40
Reasonable Care- Penalties
Penalty for importers failing to meet Reasonable Care Standards:
*Domestic value or twice the duty, whichever is less
* If duty free the penalty is calculated at 20% of the value
Penalty for brokers not meeting Responsible Care Standards:
*$30,000.00 per violation as provided for in 19 USC 1641
AIT Worldwide Logistics Slide 41
Receive Valid POA
Ma
nif
est
q
ue
ry a
nd
IS
F
RELEASE
Query the AWB/BL and confirm AMS info. File ISF 24 hours prior to loading
Do we have the EIN#? Proper signature?
Can clear if they have a continuous bond. Single entry MIGHTgo to local broker
Exam or OGA hold?
Prior notice if requiredAir: Wheels upOcean: 5 days prior to arrival
Need Commercial invoice, Packing List, BL’s or AWB’s, ISF form if ocean, OGA info, certificates if required
Verify all required info is on the commercial invoice, match pcs/wt. to packing list and transportation documents
Check for 1C in AMS. All docs to station for dispatch
Customs Brokerage Process
AIT Worldwide Logistics Slide 42
Power of attorneyWho can sign a power of attorney?
Corporations: An officer of the corporation (President, Vice President,
Corporate Secretary, Treasurer, CEO, COO, CFO, Chairman, General
Counsel). Other titles are acceptable if accompanied by Articles of
Incorporation, a resolution of the Board of Directors, or a letter from the
Corporate Secretary authorizing the named officer to sign.
Partnerships: Any partner.
Sole Proprietor: Owner, Sole Signing Officer
Individual: Self
LLC: Members, Directors, Officers unless a letter from the company is
provided authorizing another title to sign.
Foreign Company: Must complete the “Corporate Certification” establishing
the authority of the signatory to execute the Power of Attorney .
AIT Worldwide Logistics Slide 43
Customs Bonds
What is a customs bond?
A customs bond is essentially a contract between the importer and
CBP, under which CBP grants the importer the privilege to clear goods
through CBP and the importer agrees to meet certain conditions such
as producing required documentation and paying duties, taxes, and
fees where applicable, etc. The bond amount is based on risk
guidelines set by CBP.
When is it required?
A bond is required when importing goods into the US that are valued
over $2500.00 or if the commodity is subject to other government
agency requirements to secure potential duties, taxes, and fees owed
to CBP related to the imported goods per 19 CFR 113.40.
AIT Worldwide Logistics Slide 44
Customs Bonds
Types of Bonds:
Continuous:
• Valid for unlimited number of entries in a 12 month period
• Valid for entries cleared in any port in the USA
• A continuous bond is valid for the 12 month period. The minimum
amount is $50,000.00
Single Entry:
• Valid for one transaction only
• Some entries cannot be cleared remotely must be cleared by
broker in the port of entry.
• The single entry bond is drawn on the total value of the shipment
plus the duty and taxes unless there are other agencies involved.
AIT Worldwide Logistics Slide 45
Customs Bonds
Questions to help the importer determine what type of bond they
should get…
1. How often so you import? – What is the value ?
2. Do you import into multiple ports in the US?
3. Is your commodity subject to other government agency requirements? • The following are examples of categories where customs required the bond to be three times
the value: Food and Drug Administration
Environmental Protection Agency
Bureau of Alcohol Tobacco and Firearms
Consumer Products Safety Commission Toys and Fireworks
Agriculture Marketing Service
Federal Communication Commission
Toxic Substance Control Act
All merchandise subject to Quota or Visa
Shipments under Fish and Wildlife
4. Is the import shipping ocean? (Would need an ISF bond plus an entry bond
if not a continuous holder)
AIT Worldwide Logistics Slide 46
Compliance Concerns
Top 4 non-compliance issues
• Incorrect Harmonized Tariff code/classification
**Binding ruling services available
• Inaccurate or unclear commercial invoices
• Valuation
** Not correct according to Incoterms
** Non-dutiable charges not declared (Freight, Insurance, inland freight..)
** Make market value charges not declared (assists, packaging…)
• Recordkeeping
AIT Worldwide Logistics Slide 47
Invoices
Types of Invoices for Customs Purposes
• Commercial
A document prepared by the overseas shipper or seller that contains
pertinent information related to the transaction of sale between the buyer and
seller of imported merchandise.
• Proforma
A document prepared by the importer of record that contains pertinent
information related to the transaction of sale between the buyer and seller of
imported merchandise
AIT Worldwide Logistics Slide 48
Invoice Requirements
Requirements as per Customs Federal Regulations 141.86
• Port of entry to which the merchandise is destined.
• Name and address of importer of record.
• Name and address of the ultimate consignee if different than the importer.
• Name and address of manufacturer/shipper.
• Detailed description of the merchandise, including the name by which each item is known in the
country of sale.
• Unit price of the merchandise in the country of sale.
• Total value of the merchandise indicating the terms of sale associated with the actual purchase.
(CPT, EXW, FOB, DAP etc).
• Country of origin of the merchandise.
• Statement of use in the US
• Any rebates offered on imported merchandise between buyer and seller.
• Any discounts from price.
• Any values of assist, such as dies, molds, tools, and engineering work provided to the
manufacturer to assist in the production of the imported merchandise.
• Packing list (itemizing each net packed item).
• Must be in English
• Must be endorsed by the person or party who prepared the invoice.
AIT Worldwide Logistics Slide 49
Recordkeeping
Who must keep records?
Rules require owners, importers, consignees, importers of record,
declaration filers, entry filers, or other parties (or their agents) to
maintain records if they:
• Import merchandise into the Customs territory of the United States.
• File a drawback claim.
• Transport or store merchandise carried or held under bond
• Knowingly cause the import, transport, or storage of merchandise carried or held
under bond into or from the Customs territory of the United States.
AIT Worldwide Logistics Slide 50
Recordkeeping
What records must be kept?
• Businesses must keep records (referred to as the "(a)(1)(A) list") that they
have to prepare for the entry of merchandise.
***Complete (a)(1)(A) list is at www.ecfr.gov. Use the drop down to go to title
19 and then to “Appendix to Part 163”.
• Others required are those business, financial, and accounting records
ordinarily maintained for normal business transactions.
AIT Worldwide Logistics Slide 51
How long must records be kept?
Unless otherwise stated, record keepers must keep them for…
• Five years from date of entry, or
• Five years from the date of the activity which required the maintenance of
the records (Ex. Warehouse entries_
Recordkeeping
AIT Worldwide Logistics Slide 52
Penalties?
• Failure to maintain or produce "(a)(1)(A) list" records:
Willful: not to exceed $100,000 per release or 75% of the appraised
value, whichever is lower.
Negligence: not to exceed $10,000 per release or 40% of the appraised
value, whichever is lower.
• In addition, if these records relate to goods eligible for reduced or free
duty rates, the merchandise shall be liquidated at the full column one rate
Recordkeeping
AIT Worldwide Logistics Slide 53
Acronyms commonly used in brokerage
ABI-automated broker interface
ACE- automated commercial environment
AMS-automated manifest system
AWB-Air Waybill
B/B- Breakbulk
BOL- Bill of lading
CAN-Customs assigned number
CBP-Customs and Border Protection
CEF-Customs exam facility
CES- Customs exam site
CTB- Continuous bond
C/O-Country of origin
D/O-Delivery order
ETA-Estimated time of arrival
ETD-Estimated time of departure
ETES-stimated time of sailing
FCC-Federal Communications
Commission
GRI-General rules of interpretation
HTS-Harmonized Tariff Schedule
ISF-Importer Security Filing
IOR- Importer of Record
LCL-Less than container load
MAWB-Master air waybill
NAFTA-North American Free Trade
Agreement
OBL-Original Bill of Lading
OGA- Other government agency
PAPS-Pre arrival processing system
PARS-Pre arrival release system
POA-Power of Attorney
SEB-Single entry bond
SPI-Special Program Indicator
TEU-twenty foot equivalent unit
TSCA-Toxic Substances Control Act
USDA-US Department of Agriculture
AIT Worldwide Logistics Slide 54
What are Incoterms?
• Incoterms are an internationally accepted
convention, protocol, framework
• When properly cited in a contract, the rules and
their provisions are accorded legal standing
internationally
• Define the terms of sale (i.e. what qualifies as
the ‘delivery’ of goods) and in doing so define
the obligations, risks, and costs of seller and
buyer in respect to ‘delivery’ of goods
AIT Worldwide Logistics Slide 55
What Incoterms Do
AIT Worldwide Logistics Slide 56
INCOTERMS 2020
INCO = International Commercial
Published by the International Chamber of
Commerce-2020
https://iccwbo.org/resources-for-
business/incoterms-rules/incoterms-
2020/
AIT Worldwide Logistics Slide 57
• They are not terms of payment
• They do not specify forms of payment
• They do not specify or grant credit terms
• Incoterms do not speak to transfer of ownership
or title to goods.
• They are not US or international LAW
What Incoterms Are Not
AIT Worldwide Logistics Slide 58
Classes of Rules for 2010
All Modes of Transportation
• EXW – Ex-works
• FCA – Free Carrier
• CPT – Carriage Paid To
• CIP – Carriage Insurance Paid To
• DAP – Delivered at Place
• DAT – Delivered at Terminal
• DDP – Delivered Duty Paid
Sea or Waterway ONLY
•CFR – Cost & Freight
•CIF – Cost, Insurance, & Freight
•FAS – Free Alongside Ship
•FOB – Free On-Board
AIT Worldwide Logistics Slide 59
Incoterms in Use
• Incoterms are always cited using their accepted three character
abbreviation
(i.e. EXW, CIF, DAT, etc.)• An Incoterms code is always followed by a ‘Named Place’.
Example – FCA Hong Kong Airport, DAP 2900 Walnut St or CPT
FRA, etc.
• You must have a place (or port/airport) at which the
transition between seller & buyer occurs
AIT Worldwide Logistics Slide 60
Rules for Any Mode of Transport
AIT Worldwide Logistics Slide 61
EXW Ex-Works…(named place)
• Seller fulfills all obligations when:
➢Goods are made available at the agreed place
& time
➢Not loaded upon a collecting conveyance
➢Not cleared for export
-Shipper is still responsible for export
compliance concerning licensing or AES
• Buyer bears all costs & risks in taking the
goods to the designated destination.
EXW – EX WORKS
AIT Worldwide Logistics Slide 62
FCA Free Carrier…(named place)
• Seller fulfills obligations when:➢ Goods are handed off to buyer’s designated carrier/ agent
at named place within the seller’s country
➢ Named place could be:
Seller’s premises
(FCA Seller Warehouse – Seller bears risk & cost of loading)
Any other place/ port/ terminal/ within origin country
(‘Place’ is often defined as the freight forwarder’s or Gov’t warehouse – seller may have to pay and
arrange local trucking)
• Buyer bears all costs and risk from time goods
are handed off to designated carrier/ agent
through to the desired destination.
FCA – FREE CARRIER
AIT Worldwide Logistics Slide 63
CPT Carriage Paid To…
(named place of destination)
Seller:➢ Arranges & pays for pre & main carriage to the agreed
place, including off-loading at carrier.
➢ Clears the goods for export (when required)
➢ Bares the risk of loss TO THE POINT OF FIRST
CARRIER ACCEPTANCE at origin.
Buyer:➢Arranges and pays for on-carriage at destination
➢Arranges & pays for import clearance, inspections etc
➢Bares the risk of loss DURING MAIN CARRIAGE
CPT – CARRIAGE PAID TO
AIT Worldwide Logistics Slide 64
CIP Carriage & Insurance Paid To… (named place of destination)
Seller:➢ Arranges & pays for pre & main carriage to the agreed
place including off-loading of the goods
➢ Clear the goods for export (when required)
➢ Bares the risk of loss TO THE POINT OF CARRIER
ACCEPTANCE at origin
➢ Arranges & pays for insurance for the Buyer benefit
(the 110% rule)
Buyer:➢Arranges and pays for on-carriage at destination
➢Arranges & pays for import clearance, inspections etc
➢Bares the risk of loss DURING MAIN CARRIAGE
CIP – CARRIAGE & INSURANCE PAID
AIT Worldwide Logistics Slide 65
DAT Delivered at Terminal…(named terminal of destination)
Seller:➢ Arranges & pays for all carriage to deliver the goods to
named terminal at, or within, destination country.
➢ Responsible for off-loading the goods at terminal
➢ Clear the goods for export (when required)
➢ Bares risk of loss to the point of delivery at terminal
(difference vs CIP/CPT)
Buyer:➢Arranges and pays for on-carriage at destination
➢Arranges & pays for import clearance
➢Arranges & pays for import formalities as necessary
(duty/ tax)
DAT - DELIVERED AT TERMINAL
AIT Worldwide Logistics Slide 66
DAP Delivered at Place…
(named place of destination)
Seller:➢ Arranges & pays for all carriage to deliver the goods to
named place at, or within, destination country.
➢ Is NOT responsible for off-loading of the goods at Buyer(Typically the buyer/ ultimate consignee’s premises)
➢ Clear the goods for export (when required)
➢ Bares risk of loss to the point of delivery at named place
Buyer:➢Arranges & pays for import clearance
➢Arranges & pays import formalities as necessary (duty/ tax)
➢ Pays for any customs inspections
➢ Storage charges – sticky – not clear
DAP- DELIVERED AT PLACE
AIT Worldwide Logistics Slide 67
DDP Delivered Duty Paid…(named place of destination)
Seller:➢Arranges & pays for all carriage to deliver the goods to
named place at, or within, destination country.
➢Is NOT responsible for off-loading of the goods at Buyer(Typically the buyer/ ultimate consignee’s premises)
➢Clear the goods for export (when required) & IMPORT
➢Pays all Duty, VAT, Storage, Inspections
➢Bares risk of loss to the point of delivery at named place
Buyer:➢Buyer has no responsibility for costs or liability
➢Not allowed in some countries; complicated in others
DDP – DELIVERED DUTY PAID
AIT Worldwide Logistics Slide 68
FOB Free On-Board…(named PORT of shipment)
Seller:➢Fulfills obligations when goods:
1. Are loaded onto the vessel (as selected by the buyer) at
the named port (could be inland CY)
2. Cleared for export (when necessary)
➢Bares risk until goods are loaded onto the vessel.
Buyer:➢ Arranges & pays for all carriage after the FOB point.
➢ Responsible for all costs of unloading at arrival terminal.
➢ Arranges & pays for import clearance
➢ Bares risk from time goods are placed onto vessel at origin
(named FOB point)
FOB – FREE ON-BOARD
AIT Worldwide Logistics Slide 69
CFR Cost and Freight…
(named port of destination)
Seller:➢ Arranges and pays for pre& main carriage to the agreed upon
destination port.
➢ Responsible for loading.
➢ Pays and arranges Export customs clearance (when necessary)
➢ Bares risk to the point at which goods are loaded at the origin
port
Buyer:➢Arranges & pays for on-carriage at destination
➢Responsible for cost of off-loading at destination port
➢Arranges & pays for import clearance
➢Bares risk during main and on-carriage
CFR – COST & FREIGHT
AIT Worldwide Logistics Slide 70
CIF Cost, Insurance, & Freight…
(named port of destination)
Seller:➢ Arranges and pays for pre& main carriage to the agreed upon
destination port
➢ Responsible for loading
➢ Arranges and Pays Export customs clearance (when necessary)
➢ Arranges & pays for insurance ➢ Bares risk to the point at which goods are loaded at the origin port
Buyer:➢Arranges & pays for on-carriage at destination
➢Responsible for cost of off-loading at destination port
➢Arranges & pays for import clearance
➢Bares risk during main and on-carriageCIF – COST, INSURANCE, & FREIGHT
AIT Worldwide Logistics Slide 71
Choosing an Incoterm
➢ Determine what your company’s desire/
tolerance is to assuming obligations, risk, &
related costs
➢ How accurately can you anticipate, or build-in,
costs?
➢ What is the benefit of controlling the movement
of merchandise vs. assumption of cost/ risk?
Customer Portal
▪ Web-based portal delivers timely tracking and document
information
▪ Booking
▪ Quote requests
▪ EDI Integration
▪ Inventory tracking
▪ PO management
▪ Block Chain-The Future of International Trade
▪ Customization and Reporting
▪ Customizable shipment information displays
▪ Exportable data
▪ Email alerts
▪ Status triggers
▪ Critical shipment movements
Technology-Closing the Loop
Technology-Examples
Improving the Customer
Experience with Technology
• Near real-time capture and delivery of
status updates
• Digital capture of Proof-of-Delivery and
related documents
• Capture photos and notes on delivery
exceptions
• Barcode scanning available to reduce
exceptions (Future version)
• Surveys for immediate customer feedback
on service quality
• Simple interface supports process and
continuous improvement
Q&A