About this blog

A web portal for logistics professionals

 

 

 

Greetings Freight Enthusiasts,

 

 

I am an International Freight Forwarder in Vancouver, BC Canada.  I work for a medium sized, Canadian owned company that specializes in project logistics for the mining / oil & gas industries.  Being the helpful guy that I am, my intention is to make this blog a fun and informative place for you to visit whenever you have any questions about the movement of goods and documents.

 

People that may find this blog of interest include (but not limited to):

 

· North American Manufacturers

· Exporters / Importers

· Purchasers

· Logistics Coordinators

· Consulting Engineers

· Project Managers involved with Mining / Oil & Gas

 

This blog is just getting started and is a work in progress.  Updated and new articles will appear to the side under ‘Categories’.  Please do come back to see the updates.  Even better – subscribe to the RSS feed  to make sure you get the updates as they are published.  (it’s free)

 

“What’s an RSS feed?” you ask … click here for the best explanation I’ve seen yet. 

 

The nice thing about RSS is: NO SPAM.  I’m not keeping a data base of anyone’s email address.  You won’t be hearing from me unless you subscribe. (Or ask me to contact you because I’m obviously a knowledgeable & friendly guy and you want me to babysit your freight for you.) 

 

In the meantime … please don’t hesitate to post a comment or ask questions – you don’t have to wait until I’ve addressed your particular point of concern to find what you’re looking for.  Drop me a line if I haven’t yet posted something on your topic of interest … I work with a team of extremely knowledgeable logistics professionals who will be more than happy to help me help you.

 

 

 

freightblog@gmail.com

 

We live in a 3 dimensional (at least) world

Ok … rant time again.

When calculating freight charges – 3 dimensions AND weight are required.

Too often people will ask me for a freight rate and tell me: “1 piece 10 feet long and one piece 17 feet long … “  and that’s it.  Of course, because I’m a friendly and helpful guy, I don’t just give them my ‘Rainman’ response  ” it’s a hundred dollars, definately a hundred dollars” … although it’s tempting.

PLEASE,  remember that L (length) x W (width) x H(height) & weight are required when calculating shipping charges.

How To Negotiate Freight Rates …

One quick point I’d like to bring up on negotiating rates.

If you are a purchaser or logistics coordinator for a company that imports or exports and part of your job is negotiating with freight forwarders or other logistics service providers … remember that I/We are on your side. 

Whenever I quote on business and all the feedback someone gives me is “this isn’t the best rate I’ve seen, I hope you can do better”, I can’t properly go back and negotiate with the carriers on your behalf.  

If a logistics service provider quotes on something for you and you really are interested in getting the cheapest rate you can – it’s in your best interest to provide a target figure for them to hit. 

In the very recent past, I was able to negotiate some silly rates on behalf of a client because they gave me an actual dollar amount per container I had to beat.  Armed with that information I was able to approach some different steamship lines and ask them if it was worth it for them to match or beat that rate.   To my surprise, I was able to secure pricing that would have been totally inconceivable only 6 months ago. 

All it took was a token amount of trust and respect between my client and I and I was able to come through. 

Help me help you. 

PLAN AHEAD

I’ve said it before and I’m saying it again:

If you have a crucial deadline and your life/contract/marriage/happiness/success depends on something getting somewhere by a specific time … Please.  Please.  Please – Plan ahead.

Don’t leave shipping something until the last minute.  Whenever I quote a client a transit time I always mention ‘approx’, or ‘if everything goes as planned’.

Some key points to keep in mind when shipping the vital components of your business around the world:

• Customs – Customs, in any country, have the authority to do whatever they want.  Always factor in that there could be a delay due to a customs inspection
• Phyto Sanitary Issues – Wonder why you are always asked if you have been on a farm, or are travelling with the remains of any animals whenever you pass through customs while travelling?  Insects, pests, bacteria, parasites, viruses, aliens … all these can live in/on you, your clothes, your cargo, the dunnage used to pack containers.  Always take it upon yourself (as a shipper and/or importer) to educate yourself in the current laws and restrictions concerning phyto sanitary issues for each and every jurisdiction your cargo is planning on passing through for it’s trip from point A to point B.
• Time Zones – If someone in the country you are dealing with is a day and a half ahead of you, it could take 2 or 3 days to get a simple question answered if you are relying on email.  What if the consignee in the foreign country you are dealing with has no experience in international commerce?  What if they don’t already have an account set up with a customs broker?  What if they don’t even realize they need an account with a customs broker if they want to import goods into the country in question?
• International Payments – figure out ahead of time what INCOTERM you are going to use.  If it’s DDU – make sure your client understands that Customs and Duties will need to be paid at destination before delivery can be made (unless they have an account already in place with a customs broker and that customs broker is willing to extend them credit and protect any charges for detention). 

Any of the above mentioned factors can contribute to the delay of a time sensitive shipment.  Of course, if time is not an issue, there will be no delays whatsoever – Murphy’s Law.

The moral of the story?

Don’t leave anything until the last minute.   Ship things a week before you think you will need them there.  Yes – you may end up paying for a bit of storage at destination.  But that is almost always less expensive than losing a contract – or repeat business – due to poor performance.  Your client will blame you, you will blame me, I’ll blame customs/the steamship line/air line/trucker/the Queen … The end result is the same – everyone is running around with their hair on fire, everyone loses and nobody wins.  Don’t be cheap, factor in a bit of storage time and sleep peacefully knowing that you have planned ahead.

Choosing a Logistics Provider

Choosing a Logistics Service Provider

These guys have fleets of sales people knocking on doors and handing out doughnuts (I’m one of them)  .  They’re all fairly presentable, nice folks, and their rates tend to be more or less in the same ballpark.  How do you choose one over another?

First of all – What are your needs?  It’s great that the rep you are talking to has great rates from wherever you are to points in the mid-west and has on-line tracking and tracing etc.  But you only have business that runs up and down the I-5.  What’s more important to you: cheap rates / great service?  The odds are you can’t have both at the same time – sometimes you get lucky, but you usually have to pick one.  

Ok … you’ve figured out what kind of person you are:

1. You don’t sweat the small stuff and don’t care that your freight shows up a couple of days after it was supposed to (it had to cross the border at a different point because the trucking company you hired has an interline agreement with a small independent company they didn’t tell you about) because the rates are soooo cheap.
2. (I don’t want to say you’re cheap but …) You sweat the small stuff, yet still insist on getting 10 freight quotes for every single pallet sized shipment you have – usually at the last minute.  You get red-faced mad whenever anything goes wrong and it’s always your trucker’s / freight forwarder’s / Customs Broker’s fault and wonder why you can’t get any follow up/troubleshooting customer service when you need it. 
3. Your supply chain is modeled after a ‘JIT’ (Just In Time) inventory system and you absolutely have to have your product when you ask for it.  You’re willing to pay a bit extra for the asset based supplier/integrator because you know that it’s their own company employees doing: the pick up and delivery in company trucks,  the on-line tracking and tracing , monthly and quarterly inventory in their automated pick and pack warehouse.  You like the snappy, pseudo-military look of the uniforms their employees wear.
4. Your supply chain is modeled after a ‘JIT’ (Just In Time) inventory system and you absolutely have to have your product when you ask for it.  You have a realistic appraisal of the world of supply chain management and know that often times a 3Pl will have the flexibility to create a fully customized supply chain model for you – often below the cost of an asset-based provider.  You understand that even though a 3PL gets their flexibility from having no regular fixed costs, they still have to make a living.  Yes, you can always find someone cheaper.  But, your experience tells you that often times the cheapest service provider isn’t necessarily going to be looking out for your best interests.  

So let’s talk about what separates the 3PLs from the asset based folks:

Asset-based carriers/integrators vs 3PL

For legal reasons I’m not going to name drop, but an asset-based carrier is a company that uses their own equipment, has their own warehousing facilities, their own pick up and delivery drivers etc.  An integrator is an asset based carrier that will integrate all solutions using their own trucks, warehouses, planes, software etc … If you still don’t know what I’m talking about – watch “Cast Away” starring Tom Hanks.  Historically these kinds of companies are ideal for small packages (less than 100kg airfreight / less than pallet size for ground) and it’s good to have an account set up with one or two.  Now days, these folks are also offering rates for pallet size shipments and up, warehousing, pick and pack, on-line inventory monitoring etc, customs brokerage … but generally are not the most cost effective option.

Asset-based companies and 3Pls are now at the point where they are offering the same types of services.   Again, it comes down to: What kind of person are you?  Do you feel secure with the military style uniforms?  Or the transparency that comes from knowing there is no ‘unknown’ party handling your product?  Some people buy into the image some of these companies have created (at no small cost).  It’s understandable – some of these trucks are so common place that they don’t even stand out as ‘product placement’ if you see them in a movie.   

A 3PL is a ‘third party logistics’ provider.  Even in this realm there is an enormous range of service providers.  There are multi-national companies that can service all your freight forwarding, warehousing, inventory monitoring and customs brokerage needs on a global scale all with their own corporate offices.  Again, you have the feeling of security knowing that your product is all within one global, in-house system.   This Global, Multi-National ‘entity’ is perfect if you have huge volumes of inventory moving through their system.  I.E. you are a supplier to a ‘big box’ store.  However, if your business falls within the SME (Small to Medium-sized Enterprise), good luck getting someone on the phone if there is a problem with one of your shipments.  These are the big kids and they don’t let you forget it. 

If you fall into the SME category, or you have a lot of business and want personalized customer service … call me -  The mid-sized 3PL.  We (and companies in our league) have independent agents all over the world that can facilitate the movement of goods and documents, warehousing, inventory control – oh wait, that’s starting to sound like what all the big kids are doing.  Hmmm?   The only difference is: you will never have a problem getting ahold of whoever is handling your freight. 

Our new phone system …

Everyone gets chain email … this is one I received recently.  An oldie but a goodie:

 

 

Thank you for calling *insert name here* Co. Please listen carefully as our options have changed.

 

 

- If you MUST submit a proposal to your client within 20 minutes, but have neglected to obtain a transportation rate,

 

even though this has been on your desk for six months, please press 1.

 

 

- If your shipment required an inside, two-man delivery to the eighth floor of an office building which had no freight elevator,

 

and you do not understand why you were billed extra for this service, please press 2.

 

 

- If you would like us to contact US Customs on your behalf and tell them they do not have the right to impede your business by

 

holding your freight for examination, please press 3.

 

 

- If you work at Dunkin Donuts and you would like to explore the possibility of importing small plastic toys from China which

 

you can in turn sell on e-Bay, please press 4.

 

 

- If you require a quotation, please have your pieces, weight, dimensions, commodity, origin and destination available

 

before speaking with a representative. Please be more specific than “Europe” or “Asia” when referring to origins and

 

destinations. Please note that a “bunch” of “parts” does not constitute quantities and commodities.

 

 

- If you are exporting more than half a million dollars’ worth of merchandise to your client in Germany, and have never heard

 

of a commercial invoice, please press 5.

 

 

- If you have been advised by our export personnel that your shipment of hand grenades is not only hazardous material, but

 

also requires an export license, and you would like to speak to a manager about the fact that in ten years of shipping hand

 

grenades (otherwise known as a “bunch of parts”) you’ve never had to do that before, please press 6.

 

 

- To question the legitimacy of “dimensional weight”, please press 7.

 

- If you would like to know the Customs regulations for every port in the world, please press 8.

 

 

- If you can tell us absolutely nothing about your commodity and would like us to properly classify it because “that’s what

 

you hired US for”, please press 9.

 

 

- If you’ve hired your South American customer’s cousin in Miami to ship your goods, and would like us to call him and

 

offer free advice on how to do this, please press 10.

 

 

- If your letter of credit expires at noon tomorrow, and you’re still waiting for some of the product to arrive at your office,

 

please press 11.

 

 

- To claim that another airline can ship your product for half of what we quoted and try to get us to lower our price because

 

you really want to use us, please press 12.

 

 

- If you wish to scream and curse at our personnel because a carrier bumped your freight, please press 13 to curse at import

 

personnel, 14 to curse at export personnel.

 

 

- If you ship 50 to 75 kilos of freight with us per year and you’d like us to DROP EVERYTHING to give your shipment top priority,

 

please press 15.

 

 

- If you told us your shipment weighs 150 lbs, and would like to dispute the reweight of your 12 pallets of hammers, please

 

press 16.

 

 

- If your shipment was damaged and you refused insurance in writing prior to departure, please press 17 to declare that

 

you’re going to sue us.

 

 

- If Customs has had your shipment on hold for two weeks and you’d like to go “talk some sense into them”, please press 18

 

for directions to their facility.

 

 

- If you have a very urgent shipment that must be cleared right away, but do not have any documentation, nor any Master Bill

 

or House Bill tracking information, please press 19.

 

 

- If you are a truck driver seeking directions to our warehouse, and you have already called three times, please hang up and

 

go buy a map.

 

 

- If you are just in a foul mood and need to yell at SOMEBODY, please press zero, for “Big Mike”, our receptionist.

 

 

Thank you again for calling *insert name here* Co. and have a pleasant day.

Not all customers are created equal :)

This posting is in response to a recent comment regarding customer service and dealing with troubled customers.

In terms of dealing with troubled or disappointed customers … I always say that a problem is an opportunity for customer service.  In business, like life in general – things go wrong.  How you deal with the problem is how your customer is going to judge you.

However, keep in mind that not all customers are created equal.  I’m sure most of you have already heard of the 80/20 rule or Pareto’s law.  Basically it states that 20% of your customers account for 80% of your revenue.  Obviously you want to keep that 20% happy – but not at all costs.  Tim Ferris goes into further detail on how to manage your client portfolio to ensure you’re holding onto the right clients in his book “The 4 Hour Work Week.”

Once you’ve sifted through your client list and you’re dealing with that precious 20% … make them happy.  You will obviously have to judge how to do that on a case to case basis.  If something went wrong and it’s your fault – apologize and fix it.  If something went wrong and your client is at least partially responsible – own up to your part of the problem and politely invite them to own up to their end.  Remember … you’ve decided that this client is now in your 20% and is there because you’ve decided she is worth holding onto.  One of the reasons this client has made it to the ‘keep’ list is because they are adult and reasonable.  Why would you want to do business with someone that makes all their problems your problems? 

Rave – Customer Service

Below is something I borrowed from here … X 

Just a little something to make you go “hmmm”.      

Tips on Great Customer Service

How would you react if…

… you got a call from your car dealer service manager a week after having some repairs done just to make sure everything is okay? You got a call from your doctor the evening after treatment just to check up on you. You got a questionnaire in the mail from a restaurant you dined at soliciting your comments and suggestions.

Some business people tell me that’s looking for trouble. I disagree. I think it’s looking for rapport, loyalty, satisfaction and repeat business. If follow-up turns up a lot of dissatisfaction, you need to make some changes. The dissatisfaction is there whether you discover it or not.

How would you react if you got a thank you note a few days after buying a new suit from a clothing store, you got a birthday card from your insurance agent, you got a free dinner gift certificate as a thank you from a hotel chain, you got a personalized luggage tag in the mail as a gift from your travel agent?

Recognition and appreciation can be very powerful and very inexpensive as a marketing strategy. It is true that comprehensive follow-up and follow-through may reveal some inadequacies in your business operation and that’s good if you use those discoveries as impetus for improvement.

Of course every business, no matter how well managed, will have to deal with dissatisfied even angry customers from time to time. Sometimes the customer is justified in his complaints other times he is not, but the handling of the dissatisfied customer can have far reaching impact on a business.

International Trade Resources – 10+ ‘must have’ links for your favorites list …

Helpful links for anyone conducting international business

 

Shipping/Logistics

Ocean Containers

Hapag Lloyd has a good page describing the different types of containers and their payloads, dimensions etc …

HS Codes

Tired of guessing what HS codes you should be using? Go here.

Incoterms 2000

This is an excellent resource for Incoterms.  You can save the PDF file and/or print it off for a wallchart.

International Sailing Schedules

I almost feel bad for giving this little gem away … Pay particular attention to the point to point search on this site.  It shows what shipping lines will service what ports around the world.

Airport / Airline Codes

Here is a site for when you need to decipher international Airline/Airport codes.

Customs / Phtyo-Sanitary Compliance

Here is a professional paid subscription site.  It provides customs + documentation requirements for 180 countries around the world.

Here is a site letting you know what the packaging/crating restrictions are for most countries around the world.

Metric Conversion Calculator

Here is a good metric conversion calculator.  Weight, dims, volume etc …

 

General Interest

Currency Converter

I’m sure you already know about this one … but figured I’d put it in here anyway.

CIA World Factbook

This is a great place to get current information on political, economical issues around the world.  A good place to check if you are going to be travelling or thinking about doing business in a new part of the world.

Price of Gold

If you’re involved in mining, I’m sure you already have your favorite place to visit for current Gold prices.  Here’s a good one if you don’t.

Journal of Commerce

This is a great site for International Trade news.

Time Zones

Here is a totally user-friendly site for world time zones.

World Maps

Google Earth is by far the slickest ‘where is it?’ software.  Although … if you don’t want to / don’t have time to download it MSN Encarta is an excellent runner up.

Rant – “Lack of planning … “

“Lack of planning on your part does not constitute an emergency on my part.” - anon

I’m not sure where this quote originated – but I’ve been thinking about it a fair amount lately – Especially as it pertains to freight forwarding.

“ETA” – Estimated Time of Arrival

 

The way most people say ETA is that they put an emphasis on the ‘A’ – as in “What’s the ETA?”

When it comes to meeting contractual deadlines that involve having to send an ocean container somewhere … I’d like to suggest that we all start thinking it as ‘ETA’. As a freight forwarder, I wish I had ultimate control over the variables involved with international shipping: last minute routing changes, equipment failure, bumped bookings, delayed sailings, etc … Sadly this is not the case.

Here’s something to think about: Some of today’s Ocean Vessels can carry in excess of 4000 TEU per sailing. Now, think about all the different people involved with making a booking and getting it onboard a ship: shipper, forwarder sales rep, forwarder operations person, steamship line booking person, dray company dispatch, dray company driver, rail company booking, rail yard receivers, rail operators, dock workers, customs brokers, customs officials, port security people, ocean vessel crew, overseas customs brokers, overseas customs officials, overseas dray dispatch … I’m hoping you get the point by now.

The moral of the story is: there are many variables beyond any one person’s control. Your container is important to you. If you’re my client – your container is important to me. However … once I’ve surrendered it to the rail and/or steamship company – it’s in the hands of the almighty. That’s why I sell insurance on every booking.

Let me put it another way … Let’s say you knew you had to get yourself to an important meeting/interview. Would you take the bus to get there? If you didn’t have a car – wouldn’t it be wiser to take a cab? If you didn’t have the money for a cab and had no choice but to take the bus … And you knew that under the best circumstances it was going to take you an hour and a half and would require 3 transfers to get there… Would you sleep in to the last minute and take the latest possible bus? Let’s say you did and you were late for the interview/appointment – would you blame the bus driver?

This brings me to another point …

 

Planning ahead

 

So often, shippers are deciding which service provider to go with based on the cheapest possible price. If this is the way you are going to do business – you need to plan far in advance to avoid any delays. When you are pricing out your options and you know you are going to be faced with a deadline – please ask questions like:

• “What is the transit time?”
• “How much free time do I get at the destination port?”
• “Are there any trans-shipments with this routing?”
• If so … Where are they, and what is the frequency of sailings from those ports if we miss the first connection?” (Sorry to say this but – a vessel with 4000 TEU is not going to wait a week for your one container.)
• “Is there any port congestion at these trans-shipment points?” “If so … What is the current delay time?”

With ocean shipping – a 2 week window of delay is not unheard of. If you’re facing a contractual deadline and your forwarder gives you a transit time and sailing schedule – please don’t choose an ETA that arrives sooner than 2 weeks before your deadline because you are hoping to avoid any destination demurrage charges.

Instead, find out how much free time is available from the steamship line and from the port at destination. The port wants the container off the dock, and the steamship line wants their container back after a certain point. However … the cost of steamship line demurrage and temporary storage in a trucking company’s yard will be far less costly than losing a contract because you were trying to cheap out on the transportation.

Factor the extra charges into your initial bid and make arrangements to ship a little in advance. Please don’t leave everything to the last minute – if you do … I suggest air freight instead.