News

By Bob Willis, Bloomberg News

The trade deficit in the U.S. unexpectedly widened in June to the highest level since October 2008 as consumer goods imports rose to a record and exports declined.

The gap grew 19 percent to $49.9 billion in June, Commerce Department figures showed today in Washington. A $42.1 billion deficit was projected by economists, according to the median forecast in a Bloomberg News survey. Imports climbed 3 percent, while exports dropped 1.3 percent, the most since April 2009.

Increased business investment and consumers who are still spending are helping sustain the U.S. appetite for merchandise made abroad. At the same time, growth in emerging economies such as China may cool, limiting shipments abroad that have benefited companies such as Caterpillar Inc. The figures signal trade subtracted more from second-quarter gross domestic product than previously estimated.

“Consumer spending may be slow but it remains in full recovery so demand for imported goods is in the process of climbing back,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “The economic recovery remains on track.”

Estimates of 73 economists surveyed by Bloomberg ranged from deficits of $38 billion to $50 billion. The gap in May was $42 billion.

The June balance adjusted for inflation, which is the figure used to calculate gross domestic product, increased to $54.1 billion, the highest since February 2008, from $46 billion in May. The gap was larger than the average $42.3 billion a month in the first quarter.

Second-Quarter Revision

Economists at UBS Securities in New York said the Commerce Department, in estimating growth from April through June at a 2.4 percent annual rate, assumed a $3.2 billion widening of the adjusted trade deficit in June. Exports minus imports subtracted 2.8 percentage points from growth during the three months, the most since 1982, the Commerce Department said July 30.

Exports from the U.S. decreased to $150.5 billion from $152.4 billion, reflecting fewer shipments abroad of semiconductors, computers and steelmaking materials. Imports increased in June to $200.3 billion from $194.4 billion, led by telecommunications equipment, automobiles and consumer goods such as pharmaceutical preparations, televisions and furniture.

The quantity of imported petroleum increased, while the price per barrel fell to $72.44 from $76.93 the prior month, according to today’s report.

Sales of U.S.-made goods may get a boost from a drop in the value of the dollar. The dollar has declined 5 percent against a trade-weighted basket of currencies since a high this year on May 20. It’s down almost 1 percent in 2010.

Federal Reserve

Federal Reserve policy makers yesterday announced more steps to bolster an economy that it said is starting to weaken. The Fed’s Open Market Committee said in a statement that “the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”

The Fed said it will reinvest holdings of agency debt and mortgage-backed securities, the first attempt by the central bank since March 2009 to keep the economy from relapsing into recession.

Business investment is one of the U.S. economy’s bright spots. Purchases of equipment and software in the second quarter rose at a 22 percent annual rate, the biggest gain since 1997, according to figures from the Commerce Department. Consumer spending, which accounts for 70 percent of the economy, grew at a 1.6 percent pace from April through June after a 1.9 percent rate in the previous three months.

Asia, Europe

The outlook for exports may be tempered. European default concerns beginning in April sparked fears of financial contagion, while China and India, the world’s two fastest-growing major economies, are taking steps to prevent their expansions from overheating. Growth in Canada, the U.S.’s largest trading partner, is slowing.

The U.S. shortfall with China widened to $26.2 billion in June, the highest since October 2008, as imports from the Asian nation jumped, the Commerce Department said.

In a sign it was having some success in slowing domestic spending, China’s July trade surplus surged 44 percent to $28 billion, an 18-month high, as exports rose to a record and import gains slowed, the country’s customs bureau reported this week in Beijing.

U.S. Treasury Secretary Timothy F. Geithner said Aug. 4 he will “watch closely” how much the Chinese yuan is allowed to appreciate, after saying the previous month the currency was undervalued.

Obama and Trade

President Barack Obama has made export growth a key economic policy initiative. Obama is seeking to double U.S. exports during the next five years to about $3.1 trillion by 2015.

Obama on Aug. 5 announced a $250 million loan guarantee to finance Ford Motor Co. exports. It will finance $3.1 billion of shipments to Canada and Mexico of more than 200,000 U.S.-made vehicles, including Explorers, an administration official said.

Caterpillar, the world’s largest maker of earthmoving equipment, is among companies that have benefited from growth in emerging economies. Its sales to Latin America rose 116 percent to $621 million in the second quarter from a year earlier, the company announced on July 22.

“We’re seeing certainly a mixed story around the world, but for the most part positive,” Douglas Oberhelman, chief executive officer of Caterpillar said in a July 22 interview on Bloomberg Television. “We’re seeing virtually every strong-growth developing country, whether it’s Brazil, China or even India, growing pretty nicely.”

100% Air Cargo Screening: Path Forward

The Implementing Recommendations of the 9111 Commission Act of 2007 is a Congressional mandate requiringl0O percent of cargo transported on a passenger aircraft be screened beginning August 1, 2010 (45 days from today). Simply stated, all air cargo must be screened at the piece level prior to transport on a passenger aircraft for flights originating in the United States. On August 1, 2010, this mandate will be thoroughly enforced by the Transportation Security Administration (TSA), and our inspectors will be actively ensuring compliance.

US Origin Cargo |

The Certified Cargo Screening Program (CCSP) was established by TSA effective February 1, 2009, enabling Indirect Air Carriers (IAC’s), shippers and Independent Cargo Screening Facilities (ICSF’s) to screen cargo for flights originating in the US. Participants are fully regulated and inspected for compliance. To date, over 740 unique locations have been certified to screen and are currently contributing over 40 percent of the screened cargo volume (by weight).

Most shippers who have joined the CCSP to date have readily incorporated physical search into their packing/shipping operation at minimal cost without needing to invest in screening equipment. We are encouraged by industry participation and will continue to work through challenges with those shippers who produce commodities that are more difficult to screen. This population includes items such as perishables, pharmaceuticals, skids, drums, pre-configured aircraft containers, and chemicals that cannot be opened. If your company has not yet done so, we encourage you to contact your freight forwarders to determine if your cargo is transported on passenger aircraft in any markets and if they can assist in screening your cargo. We also encourage participation in the CCSP program by applying online at www.tsa.gov/CCSP.

International Origin Cargo |

TSA can only directly regulate carriers flying into the US (not countries), and cannot establish a supply chain (CCSPtype) approach in foreign countries to accomplish 100 percent for inbound cargo. Supply chain programs do exist in most countries where cargo is uplifted to the US, but they are established under a host country (national) program. To date, TSA has had limited access to foreign programs, which hinders our ability to determine if they provide a commensurate level of security.

To accomplish the mandate for inbound international cargo, TSA increased screening requirements for airlines effective May 1, 2010, and intends to continue to steadily increase screening these percentages.

What Lies Ahead |

The August 1 deadline stands firm, and TSA will not issue an extension for domestic or international outbound cargo. As we have stated publically throughout this process this process, screening 100 percent of cargo inbound to the US will not be attainable by industry by the August deadline, however TSA is committed to ensuring industry obtain that level of security as rapidly as possible.

As of August 1, 2010, cargo that is not screened will not be permitted to be transported on a passenger aircraft for flights originating in the US. Some airlines have indicated that cargo which they receive that is not screened in the CCSP program may be subject to delay, or earlier acceptance cut-off times, primarily at the major gateway airports.

NAFTA -
The North American Free Trade Agreement is an agreement signed by the governments of Canada, Mexico and the United States, creating a trilateral trade bloc in North America.

The Global Training Center in NYC and GRVR Attorneys are hosting a workshop on NAFTA Rules of Origin. NAFTA’s Rules of Origin require strict compliance. Failure to correctly apply NAFTA’s Rules of Origin can result in significantly higher duties, penalties, government audits, and lost of business.

The advantages and benefits of attending the Global Training Seminar in NYC:

- Comprehensive review of the NAFTA Agreement
- Step by step discussion on each rule of origin under NAFTA
- Completing the NAFTA certificate as Producer or Exporter
- Assist in understanding HTS number to qualify under NAFTA

The instructor, Ruth Rodriquez, is a leading international trade attorney.

Source: American Shipper     Date Posted: 7/22/2010 3:18:32 PM

Obtaining a U.S. license to do customs brokerage work isn’t easy.

By Chris Gillis

So, you want to be a licensed U.S. customs broker.
Then you’ll need to pass an exam administered by Customs and Border Protection, and – warning – you’d better be prepared because it won’t be easy. And just because you may already work for a broker or importer doesn’t mean you automatically pass the test.

“Study, study, read, read is the answer,” said Albert Saphir, a licensed broker and president of Weston, Fla.-based ABS Consulting, a firm specializing in customs broker and freight forwarder matters. “It is all about the regulations and quickly finding the right answers. The customs broker test has very little to do with day-to-day operations.” “I had a classmate in law school with no background in the industry. She studied for six weeks and passed it the first try,” recalled Don Luther, executive director of 19CFR Trade Consulting, who took the test nine years ago and passed. “I think some experienced people get tripped up by their practical understanding of day-to-day activities, and forget that what it says in the regulations is what matters on the exam.” In fact, some people may take the exam two, three or more times to pass it. The purpose of the exam, as authorized by Title 19 of the U.S. Code of Federal Regulations 111.13(a), is to determine an individual’s knowledge of customs and related laws, regulations and procedures, bookkeeping, accounting and other related matters. CBP has a vested interest in ensuring the test is sufficiently comprehensive, since a broker’s work is critical, detailed and complex.
The vast majority of people employed in today’s U.S. customs brokerage or import industry work under the supervision of a designated broker license holder for compliance purposes. CBP estimates the number of active broker licenses in the United States to be about 11,000.
The broker exam covers a wide array of interrelated import topics, including entry, classification, trade agreements, valuation, broker responsibilities, quotas, country of origin, protests, marking, prohibited and restricted merchandise, duty drawback, intellectual property rights, and other government agencies. It consists of 80 multiple choice questions, each with one correct answer.
The exam is considered “open book,” meaning every answer is available within the written materials permitted on site during the test. Recommended materials to have on hand during the test include:
• Latest versions of the Harmonized Tariff Schedule of the United States and 19 CFR.
• Customs and Trade Automated Interface Requirements (CATAIR), particularly the appendices for valid codes, metric conversions, valid entry numbers, common errors, Census warning messages, drawback errors and the glossary of terms.
• Instructions for preparing CBP Form 7501.
• Customs-Trade Partnership Against Terrorism (C-TPAT) minimum security criteria for customs brokers.
• Submission changes for supplemental information letters and post entry amendments.
• Remote location filing eligibility requirements.
• Directives covering monetary guidelines for setting bond amounts, amendments for certain merchandise subject to antidumping/countervailing duty cases, instructions for deriving manufacturer/shipper identification code, entry summary acceptance and rejection policy, ultimate consignee at time of entry or release, Census interface-processing procedures, and standard guidelines for the input of names and addresses into Automated Broker Interface files.
Laptops and other electronic devices are not allowed during the exam.

Related News • Meet the teacher • Sample customs broker license exam

Preparing for the test is intense. “I studied after work three to four hours on weekdays and another six to eight hours a day on the weekends for a total of 25 to 30 hours a week,” said Mark Wahl, a 22-year-old systems engineer with Honda Precision Parts of Georgia, who passed the broker exam his first time in April.
“I’m convinced that anyone who can read and write could pass this exam, given unlimited time,” Luther said. “However, the test is scheduled for four hours, no exceptions. This averages out to three minutes per question to complete it on time.”
With these time constraints, he said it’s essential to familiarize yourself with the written materials allowed during the test to know where to find the answers quickly. He also recommends using tabs on key tariff chapters and sections, and highlighting key text, such as how many days to file an entry, information on the broker triennial report, definitions of assist, and important tariff chapter notes. “But don’t over-tag or over-highlight. The point of this is to make certain a few things stand out,” he said.
CBP provides on its Web site previous broker exam questions and answers.
“Study all the old exams,” Luther said. “You’ll see questions repeated or recycled with small variations.
“Take them as practice tests,” he added. “Reverse-engineer them to determine what regulatory items are commonly used as answers and highlight these in your regulations. You can also learn what tricky chapter and section notes are often used in classification questions. Learn and highlight these rules.”

Where to begin

• Contact the National Customs Brokers and Forwarders Association of America (www.ncbfaa.org) and/or its regional affiliates for information about available customs broker license preparatory courses. • Access the U.S. Customs and Border Protection Web site (www.cbp.gov), or contact the agency’s Broker Management Branch in Washington, D.C., at (202) 863-6543, for details about taking the customs broker license exam. • Links for downloads of previous broker license exam questions and answers, and details about cancellations and revocation of broker licenses are available at www.AmericanShipper.com/links.

CBP told American Shipper in an e-mail it doesn’t seek a desired pass rate for the broker license exam. The pass rate for the April exam, for example, was 11 percent.
“CBP is more concerned that the exam is fair rather than target a specific pass rate,” the agency said. “Over the past 20 years, the pass rate is about 20 percent but has ranged from 3 percent to 65 percent. (There were two exams in one year that had over 60 percent pass rate because the previous exams were reused.) CBP plans on creating questions that deal with real-life situations and try to make them pertinent to broker-related functions.”
CBP estimates it issues about 500 broker licenses a year.

Sought After. The license has increasingly become an asset to customs brokers and importers alike.
How many licensed brokers should a customs brokerage firm have on staff depends on the scope of its business and types of import commodities it clears, Saphir said.
“I would encourage a broker to have one licensed broker for every three to four entry writers to provide good oversight and training,” he said. “Today, a lot also depends on the technology used by the broker, and again on the complexities and difficulties of the commodities. Some brokers specialize and only let licensed brokers with specific knowledge handle certain import accounts.”
Saphir said he’s noticed an increase in importers seeking to hire licensed brokers for their compliance operations. “The importers feel they are better trained and educated, and it is a competitive advantage to have the license,” he said.
Jonathan Fee, an attorney with law firm Alston & Bird LLP in Washington and a long-time instructor of classes catering to the customs broker license exam, said when he first started teaching in 1989, the most of his students worked for brokers. Today, half are importer employees seeking their broker licenses.
“It’s of the utmost importance to be knowledgeable about your products and the associated regulatory compliance issues,” said Timothy D. Brotzman Sr., manager of international transport and dangerous goods compliance with Sparks, Md.-based McCormick & Co.
The spice importer and manufacturer has a licensed broker on staff within its foreign trade group. “The license is a recognized credential for importers and regulators alike,” Brotzman said.
Luther warned that license holders should avoid situations where their license is used in operations they don’t adequately supervise. “That’s a good way to lose your license,” he said.
A broker’s license never expires; the license holder must file only a status report every three years (2009 was the last time it was due). If the license holder fails to file the report and pay the associated fee, CBP will suspend the license. The license is revoked if after notification about the suspension the license holder doesn’t submit the report within 60 days. Between people dying, failing to file the triennial status reports and voluntarily surrendering licenses, the number of license holders on record is “fairly consistent,” CBP said.

Now Wait. Passing the broker exam is the first of two significant steps in the process of obtaining a broker license. The second step is the background investigation.
“When you become a licensed customs broker, you’re sort of a deputy Customs official in some ways,” Luther said. “You’re potentially handling lots of money and sensitive information. A crooked broker could conceivably assist in a criminal enterprise, so they want to prevent that.”
CBP Commissioner Alan Bersin announced plans in May to release $1 million from his personal reserve account to significantly accelerate the process of issuing customs broker licenses. Daniel Baldwin, assistant commissioner for trade, said the agency eventually wants to shorten the processing time to 45 to 60 days, but in a follow-up correspondence a CBP spokesperson said 90 days is a more realistic initial target.
The improved turnaround is the result of an agreement between CBP and Immigration and Customs Enforcement (ICE) to streamline how background investigations are conducted. Delays presently are common because the administrative background investigations have a low priority with ICE and are compounded by the use of paper fingerprint cards that are forwarded to the FBI for criminal history checks.
The vetting function will now be the responsibility of CBP and most checks will simply involve an interview of the subject rather than contacting neighbors, friends and colleagues for reference checks as is typically done for government security clearances.
The funds from Bersin will be used to automate part of the vetting and fingerprinting process to allow these functions to be performed by CBP staff and speed issuance of the license. The Office of Global Enrollment, which handles fingerprinting and interviews of participants in trusted traveler programs, will manage the verification.
Bersin said correcting the broker license process demonstrates his commitment since taking office in March to quickly find solutions to long-festering problems affecting the trade community. Brokerage firms have complained that they have a hard time replacing or adding staff needed to maintain business with importers. The length of time it takes to obtain a license also prevents people from earning a livelihood, he said.

“All my customers, they’re having a terrible time,” said Steve L. Horton, principal at Horton Global Strategies, which negotiates freight contracts for companies. “With the increased cost and them not knowing if they’re even going to get the space or equipment, it’s a weekly battle.”

Retailers and suppliers like Mattel, Polo Ralph Lauren, Jones Apparel Group, Costco, and VF Corporation, Big Lots and Life-time Brands have reported being hit with higher prices and capacity shortages.

The fight for space means many retailers are expecting higher sales, which is a glimmer of good news. And air carriers are picking up some last-minute shipments from desperate retailers; FedEx reported on Monday that it expected increased earnings for its first quarter, ending next month.

But for most retailers and suppliers, the shipping problems are a huge headache at a time when retail sales are weak and consumer confidence is waning. “It’s made this key selling season even more complicated,” said Edward J. Yruma, an analyst with KeyBanc Capital Markets.

The shipping companies slowly added ships back into the system early this year, but they did so haltingly, not wanting to add to much supply and risk having their rates fall. (Major carriers largely hew to the rates set by carriers groups, which are allowed to discuss and set voluntary rates, under antitrust immunity.) Lifetime Brands, which makes and sells products under brand names like Cuisinart and KitchenAid, said it was now paying about double last year’s rates, and Costco said it was not back to 2007 rates.

Companies that lack contracts with shippers are paying even more. The cost of shipping a 40-foot container from Hong Kong to Los Angeles without a contract or the spot rate, was about $871 in July 2009, a five-year low. This month, that spot rate reached $2,624, a five-year high, according the the industry consultant Drewry Shipping Consultants, as reported by The Journal of Commerce. That exceeded even the cost before the recession, which was about $2,000.

Because of slow steaming, which takes containers out of the system for a longer period of time, and because places like Russia and India began to demand container space, finding something to ship goods in, much less space on a ship, has been problematic.

“There aren;t enough actual containers so therefore, even if the vessel capacity situation is easing up a little bit,” said Peter Tirschwell, senior vice president for strategy at The Journal of Commerce, “you now have equipment that people can’t get.”

(While container shipping has recovered from last year’s lower spot prices, commodity shipping, where companies ship raw goods like iron ore or petroleum, remains in a depression. This month, the Baltic Dry Index, which measures commodity shipping costs, fell for the longest number of consecutive days in almost nine years because of low demand for materials like steel.)

The problems in container shipping from Asia are the most pronounced, retailers say, but shipments from other continents, and via domestic trains and trucks, are difficult as well. The effects have been severe for some retailers suppliers.

To get products in on time, they need to spend a lot more. Cost Plus, for instance, has used air freight for some time-sensitive items, and that costs about 10 times what sea freight does, said Jeff Turner, who oversees supply chain and store operations. And for sea cargo, even though contracts with freight companies exempt Cost Plus from summer surcharges, known as peak-sea-son surcharges, the retailer is paying them.

“We have agreement that literally say we don’t have peak season surcharges for our business, but we’re treading completely new ground. Our carriers are coming to us and saying, ‘If you want to get on the vessels, we want to get on the vessels, we need to figure out how you guys pay peak-season surcharges,’” Mr. Turner said.

Mona Williams, vice president for buying at the Container Store said the company was telling manufacturers to book space well in advance, and that it was moving delivery dates earlier.

And for items that simply must arrive, well there are ways to do it. “Sometimes you can offer to pay a steamship company a larger amount of money, and they might take somebody else’s container and not put it on,” said Jeffrey Siegel, the chief executive of Lifetime Brands, but “in most cases, you just have to wait.”

To play it safe, Mr. Siegel has started scheduling items to arrive as long as three months before they need to be in stores. That means a higher cost for holding inventory than usual, but interest rates are relatively low, and he would rather have the goods in hand, he said.

The companies also risk losing sales if anything is late.

For instance, Cost Plus a home decor chain with more than 260 stores nationwide, had to quickly revise advertising and in-store arrangements when it learned grills would be late for Father’s Day, and beach chairs would arrive after a summer production ending. “You’re trying to convince your customers to take a rain check – ‘It’s coming’ – or explain why its not there,” Mr. Turner said. “Its not easy.”

For True Value, which had difficulty getting summer items like fan and grills on time, the worry was not about the retail customer, but about the stores it supplied.

“True Value stores can buy from other wholesale distributors, so they can look elsewhere,” said Don Deegan, vice president for logistics for True Value. The company has bought more expensive items when it knew it would miss a deadline, he said, to placate the stores.

Steve Walterscheid, the president of Zing Toys, which makes some summer toys, said that after his order kept getting bumped from ships, some retailers would not take the late deliveries. “Some will still accept it, some won’t,” he said. “In a short season, if you miss two weeks of a season that’s quite a bit.”

Logical Solution to attend Incoterms 2010 NYC seminar

Logical Solution Services Inc., has once again made the Inc. 5000 List of the fastest-growing, private companies in America. With this accomplishment, Logical Solution Services Inc., joins the rarified company of enterprises who have appeared on the list multiple times, many of which have grown to become national icons.

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See our advertisement placed on pg. 74, “Serving the Industry on a Silver Platter”.

See us in the Member’s Directory of Iamers Magazine.

American exports faltered in June even as imports hit a record high, the Commerce Department said Wednesday, pushing the United States trade deficit to its highest level in 20 months.

The Commerce Department said the trade deficit jumped 18.8 percent in June compared with May, widening to $49.9 billion. The wider deficit came as a surprise to economists who had forecast a smaller trade gap because of lower global oil prices.

American exports slipped 1.3 percent, to $150.5 billion. Sales of American farm products, computers and telecommunications equipment all declined. Imports rose 3 percent, to $200.3 billion. Imports of consumer goods, in particular, surged to a record high as shipments of cellphones, household appliances, televisions and clothing all increased.

The drop in exports represents a setback for manufacturers and for President Obama, who has made the doubling of exports in the next five years a priority, saying that the increase would support two million jobs.

The deficit in goods and services, the difference between what America sells abroad and what the country imports, rose to the highest level since October 2008, when it stood at $59.4 billion.

Through the first six months of this year, the trade deficit is running at an annual rate of $494.9 billion. That is up 32 percent from the $374.9 billion deficit for all of 2009 — a year when the deficit was cut nearly in half as a result of the recession. American manufacturers have enjoyed growing demand for their products in Asia. But they have faced weakness in Europe, where the economic rebound has been subdued by a debt crisis that erupted in the spring. Exports of electric generators, civilian aircraft and machine tools did buck the downward trend in June to post increases.

The wider deficit in June will most likely further depress overall American growth as measured by the gross domestic product in the April-to-June quarter. The Commerce Department initially estimated growth at 2.4 percent for the second quarter, but that figure will probably be revised lower now because of the wider trade deficit.

The prospects for exports have been hurt by a rise in value for the dollar against some foreign currencies. That includes the euro. And it is also affected by China’s refusal to heed the Obama administration’s demands that it allow its currency to rise in value against the dollar. A weaker dollar against China’s renminbi would bolster the competitiveness of American products in China while making Chinese goods more expensive in America.

For June, the trade deficit with China rose 17.4 percent, to $26.2 billion. Through the first six months of this year, it is running 15.9 percent higher than a year ago. That is certain to increase pressure on Congress to pass legislation that would impose stiff economic sanctions on China unless it moves more quickly to allow its currency to rise in value.

Victor Cruz attended the INC. Business Owner Council and met one on one with “Zappos” CEO Tony Hsieh.

The INC. Business Owner Council is Inc. magazine’s membership organization for top entrepreneurs and family business owners. The Council brings thought leaders together with Council Members to explore the best practices and develop insight that assists Council Members to make smarter business decisions.

CEO Tony Hsieh is the founder of “Zappos”, an online shoe and clothing store, which has amazing reviews.  The secret to Zappos success is that they use loyality business models and relationship marketing. The primary source of the company’s rapid growth has been repeat customers and numerous word of mouth recommendations.  In 2005, the chairman reported that 60% of customers were repeat buyers.

“Meeting Tony Hsieh was a great experience and inspired me to continue providing superior customer service!”   said Victor.

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See our advertisement placed on pg. 74, “Serving the Industry on a Silver Platter”.

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Logical Solution Services, Inc. hired BD Design Studios to redesign their website.BD Design Studios is a multimedia design company that emphasizes on branding companies to drastically improve identity and image, thus improving customer loyalty, and increasing overall sales.

It’s important to choose your logistic provider wisely, as not all logistics companies are experienced in the transportation and handling of medical equipment.” - Erik Cruz, Logical Solution Services, Inc.

Selecting the right logistics partner for your needs
5/1/2010 by: Matthew N. Skoufalos, MD Publishing

After all, the right logistics provider can help a dealer pass on greater savings to their clients, protect their uptime guarantees, and transmit parts and pieces without hiccups. The wrong fit will definitely be felt on the bottom line. Learning a bit about logistics can do more than help you get a handle on your budget – it can help you take a fresh look at the overall way in which you do business.

Logistics Defined
Logistics is a discrete field of business management, just as finance, human resources, communications, and production are. In the simplest terms, logistics defines the way things move from point “A” to point “B,” whether supplies to manufacturers or products to consumers. Logistics also deals with any of the variables that govern that journey and how they’re integrated. In the business world, this can include related concerns like supply storage, handling, and inventory.

To get a firmer grasp on the logistical needs of your business, below are a few of the most significant components of a comprehensive logistics management plan.

Single Point of Contact
David Woodhouse is vice president and general manager for Atlantic Relocation Systems’ Phoenix operations. Atlantic Relocation Systems is an agent for the national Atlas Van Lines chain. Headquartered in Atlanta, with 11 offices across the country, the company has been in business for nearly four decades; Woodhouse has been in the Phoenix metro area for about two years.

According to Woodhouse, the primary consideration in selecting a logistics company ought to be finding a partner who is willing to take ownership of your project and all its intermediate stages. “There’s plenty of logistics companies you can go to, and they in turn come to people like me,” he says. “A single point of contact sets us apart. We assign account managers to individual clients that handle the process from start to finish.”

Furthermore, Woodhouse says, “We try to customize our plan to the customer’s needs. If it needs to be a quick delivery, we make sure the time element is met. If it needs to be held for a period of time while the site is prepped for delivery, we can do that also. As far as putting a budget together, it all depends on the customer’s needs.”

Erik Cruz of Lakehurst, N.J.-based Logical Solution Services Inc., advocates the same philosophy. “We handle the entire shipping process, enabling our clients to concentrate on their core business strengths,” he says. “It’s important to choose your logistic provider wisely, as not all logistics companies are experienced in the transportation and handling of medical equipment.”

A single-point-of-contact vendor refers to a company that doesn’t outsource any of the intermediate steps in the transportation chain. The advantage of going with such a vendor is that there’s only one person to call for any questions about the process – “somebody who has the ability to control the activity from pickup to delivery,” as Woodhouse says. “One of the things that customers are looking for is somebody to take ownership of the project,” he maintains. “We’re an actual van line, so we can provide the actual van line service. There’s no middle person involved in between booking the delivery and the people who do the driving.”

As Cruz details, shipping is often far more involved than merely calling for a package pickup and then arranging a delivery date. “Typically, the first step in quoting a project is sending a surveyor onsite to photograph and document the equipment,” he says. “Once the product is de-installed from its location, we arrange delivery to an approved facility for professional packaging. We then determine delivery schedules, method of transport, and mode of transportation to the buyer’s facility.” After all, Cruz explains, “Goods may be transported by air, land, or sea, so we need to have the infrastructure to provide all required services to our customers.”

Shipping Strategies
Project cost calculation is determined by more than just method or mode of delivery, however. Most logistics companies will offer a choice of per-mile pricing by weight, from zip code to zip code. Single pieces of equipment are typically priced by weight or by the space they occupy on a truck. Above all, delivery time is the biggest price driver: The narrower the window, the higher the price.

For medical device dealers who have routine shipping needs – weekly or more often – logistics managers can often supply a preferred rate, especially if shipments follow regular routes. Woodhouse describes the Atlantic Relocation Systems in-house protocol for such services, Atlas Specialized Transportation Equipment Centers (ASTEC).

Within 24 hours of an order confirmation, shipments weighing less than 3,000 pounds are delivered in fewer than 48 hours through the ASTEC process. Delivery agents and long-haul drivers work in concert to get the shipment from its intermediate drop points to its final destination, where verbal and written confirmations are provided. The pricing advantage of such a system, according to Woodhouse, is that costs for shipments weighing less than 3,000 pounds are identical whether the truck is full or a single item is delivered.

“It used to be more cost-effective to ship full truckloads,” says Woodhouse. “But with ASTEC orders, I can ship a single piece as cost-effectively if it’s a regular run –weekly or two-to-three times per week,” he says. “It’s a lot different for a one- or two-machine scenario as opposed to shipping on a regular basis. I love truckload traffic, but a lot of what I see these days is LTL, or less-than-truckload shipments,” he says.

Tracking, Warehousing, and Invoicing
For longer-run deliveries, it’s a priority for logistics customers to know that their shipment is secure while in transit. Woodhouse and Cruz both recommend securing a vendor who is able to guarantee an airtight, seamless experience. That means being able to identify where a package is while en route and in whose hands. “All of our trailers are satellite-tracked, so we can tell our customers at any given moment where their shipment is located,” says Woodhouse.

Tracking is even more integral to the delivery process when international order fulfillment is on the table. When navigating customs and tariff law, Cruz says, it’s vital to have a logistics manager who is familiar with the legal requirements of international business. From the U.S. port of exit to the foreign port of entry, Logical Solution Services monitors its shipments to make sure they clear customs and reach the hands of their rightful recipients.

“We aren’t limited to handling business exported from the United States,” Cruz says. “We can accommodate shipments in all countries and facilitate transportation from any point to point in the world.”

Warehousing is another important component of logistics management. What happens when your shipment is received at the delivery docks? Does it just sit on a truck until the next leg of its trip? Will it be safe where it’s kept? What happens if the delivery is refused, or the recipient is unable to sign for it? These are all questions you need to ask your logistics provider.

Likewise, invoicing, which falls under generic advice like “get it in writing,” can make or break a delivery schedule, according to Woodhouse. “We have an obligation to provide the service at the agreed-upon pricing,” he says. “An accurate invoice means faster payment. When things are moved on a volume basis, if there are any issues involving invoicing, it holds up the entire process.”

Woodhouse continues, “Like in so many other businesses and industries, customers today demand things on a timely basis and with complete accuracy. There’s really no room for error in any aspect of our business because that will be the last time that we provide service for that customer.”

Specialization
Cruz says that with so many logistics management companies out there competing for business, pre-owned medical equipment providers should look for a company that boasts a specific knowledge of the field of medical equipment transportation. To that end, the Logical Solution Services management team is led by CEO Victor Cruz, who is an active member of the International Association of Medical Equipment Remarketers and Servicers.

“It’s imperative that the company has specific knowledge about the medical equipment being transported,” he says. “Minor things like hiring air-ride trucks, vacuum-packing, and using shock-absorbent material can make all the difference. Protecting the integrity of the product is our No.1 concern.”

Lilli Schaefer, director of specialized transportation at Eden Prairie, Minn.-based Barrett Moving and Storage, agrees. “At Barrett, we have strategically aligned our menu of transportation services to be a valuable tool for our clients who are responsible for the purchasing and procurement of medical equipment,” she says. “The type of service provided by Barrett is preferred by most shippers who expect professional handling and transport, along with very competitive rates.”

The bottom line? Logistics management companies know that the business is out there, and they’re ready to earn it. After all, Woodhouse says, “The quantity of used medical [devices] coming through has certainly increased in the last eight to 10 months.”

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PRESS RELEASE

(New York City -March 22nd 2010) IAMERS, a leading medical industry trade association, will begin the process of educating its members on achieving ISO (International Standards Organization) certification. Formed in 1993, IAMERS is comprised of companies that sell and service pre-owned diagnostic imaging equipment.

IAMERS’s mission is to promote and sustain professionalism and ethics among its members. While many IAMERS members are already ISO certified, the association will work towards 100% participation. Some members will choose ISO 13485, others may choose ISO 9001, depending on the nature of their business.

ISO 13485 represents the requirements for a comprehensive management system for the design and manufacture of medical devices. ISO 9001 is part of the ISO 9000 family of standards for quality management, which include checking output for defects and taking appropriate and corrective action.

IAMERS works with the FDA and other governmental agencies with the goal of educating and improving the membership. A strict code of ethics has distinguished IAMERS members since the inception of the association.

The organization believes ISO certification will give its customers an increased level of confidence in dealing with IAMERS members, and is in keeping with the IAMERS tradition of excellence.

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Logical Solution Services, Inc. , Attends the RSNA (Radiology Society of North America) 94th Annual Meeting at McCormick Place in Chicago. The purpose of the conference is to bring the radiology community together to witness the latest advances in imaging research and technology. More than 60,000 medical and science professionals attended the world’s largest medical meeting to witness the best and most recent developments in radiology scientific research and education.

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Logical Solution Services attends IAMERS meeting in Rome Italy.

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Logical Solution Services attends IAMERS meeting in the InterContinental Hotel at San Juan, PR.

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Logical Solution Services, Inc. , Attends the RSNA (Radiology Society of North America) 94th Annual Meeting at McCormick Place in Chicago. The purpose of the conference is to bring the radiology community together to witness the latest advances in imaging research and technology. More than 60,000 medical and science professionals attended the world’s largest medical meeting to witness the best and most recent developments in radiology scientific research and education.

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Logical Solution Services, Inc., has made the Inc. 5000 list of the fastest-growing, private companies in America.

“Surging U.S. exports on a range of goods including corn, soybeans and frozen pork are hitting a bottleneck in the nation’s overloaded ports, threatening to crimp profits for U.S. farmers and agricultural processors at a time when it is easier than ever for them to sell their goods abroad.

The problem can be traced to a shortage of once-plentiful shipping containers and other transportation equipment, along with a lack of space on outgoing ships. The shortage is affecting other industries, including exporters of manufactured goods and sellers of scrap metal and paper.

Exporters’ frustration is building even as U.S. agricultural exports have jumped 20% by weight in the six months ended Feb. 29, compared with the same period last year, according to the Department of Agriculture. Shipments of lentils and peas are being delayed by months. Cargo-ship operators are raising prices. Many cold-storage facilities are packed to near capacity with pork and other meat products waiting to be loaded into containers — rectangular boxes that are generally 20-feet or 40-feet long.

Peter Friedman, executive director of the Agricultural Transportation Coalition, estimated agricultural exporters could have shipped 20% to 30% more products in the past six months if more containers were available.

The port congestion comes as food prices are rising and grain stocks are dropping amid a surge in demand from fast-expanding nations such as India and China. Two other factors boosting food prices are the increasing use of grains in the production of biofuels and poor harvests in several big food-producing nations. The increased shipping costs could push grain prices higher still.

“My partner and I are pulling our hair out trying to figure out what to do,” said Larry Jansky, a senior trader in agricultural commodities for North Pacific Group Inc., which trades specialty grains and is based in Portland, Ore. Birdseed and other grain cargo he had scheduled to leave the country for the Far East and Caribbean in late February and early March now won’t ship until later this month, he said.

Finding enough containers for agricultural products used to be easy. The U.S.’s massive demand for imports meant shipping firms typically scoured the country for anyone willing to fill outgoing boxes. Often grains, scrap metal and paper fit the bill.

As shipping lines have shifted more of their fleet to lucrative routes in Asia and between Asia andEurope, there are fewer containers available to handle grains and other commodities in the vast agricultural heartlands of the U.S. and Canada.

Mr. Jansky said the shortage has forced him to pay truck drivers to camp overnight at rail yards to line up for empty containers to cart to agricultural loading points.

The container shortage also is complicating pricing, especially for refrigerated containers. Producers of products such as cheese, poultry and meat are accustomed to calling up a local shipping depot and getting a container sent over on short notice. Now, they sometimes have to pay for containers to be sent hundreds of miles. The prices producers quote when inking deals on big foreign sales sometimes don’t include or only partially reflect the added cost of getting a container to where it is needed.

“Before, the price would take into consideration that the empty container was sitting down the road inChicago or somewhere else close,” said Victor Cruz, of Lakehurst, N.J., who makes international delivery arrangements for shipping companies. “Now the container has to be hauled out from New Jersey, so [customers are] paying for a round trip.”

Adding to the problem is that shipping rates are steadily increasing, and shippers are boosting their fuel surcharges. In the past, rates were set for six months or even a year.

Some exporters, worried about availability, have resorted to ordering containers months before they need them, and sometimes they show up at the wrong time.

Some exporters “are calling up and making a booking for 100 containers for eight weeks out,” and then the customer shows up with enough goods to fill only 40 or 50 containers, said Bob Sappio,American President Lines Ltd.’s senior vice president for trans-Pacific trade. APL, which is a subsidiary of Neptune Orient Lines Ltd. of Singapore, last year swung five to 10 of its 120 ships world-wide away from U.S. ports, Mr. Sappio said.

Large agricultural companies such as Archer-Daniels-Midland Co. may not be as affected by the container shortage as smaller companies, said Jay O’Neil, a senior agricultural economist atKansas State University, as they have greater shipping resources.

Partly to address the problem, Mr. Friedman of the Agricultural Transportation Coalition held a conference call with 59 members in late April to discuss what to do. Participants talked about getting Congress — with the help of other industries — to repeal parts of a shipping law that allows carriers to discuss and fix transportation rates and service. By doing so, he believes carriers will respond more to supply and demand. They also considered pushing federal regulators to examine shipping companies’ pricing practices.

Mr. Friedman worries any possible solution will come too late to help with the container shortage.U.S. agricultural exporters currently worry their customers will start buying from other countries that produce grains, meat and other commodities.”

Logical Solution Services gets mentioned in an article on pg. 13.

Goin’ Mobile
Moving Medical Equipment by Land, Sea, and Air.
by Colby Coates, Dot Med

In retailing, everyone knows its location, location, and location. But in shipping, wether by land, sea of air it’s communication, communication, and communication.

Or as Russell Waterhouse of the American Companies, a full service frowarder based in Texas puts it, “details, details, and details.”

However one chooses to characterize the art of shipping sensitve and expensive medical equipment, especially such big ticket items as MRIs, CT Scanners or Mobile MRIs, it is complex, labor intensive and fraught with potential pitfalls. OFten what starts as a smallish, almost innocuous hiccup ends in a witch’s brew of trouble. So it’s obviously best to be as proactive and detail obsessive as possible when transportation the issue on the table.

“Communcation is absolutely essential so that all the parties know exactly what’s expected,” says Tood

In retailing, everyone knows its location, location, and location. But in shipping, whether by land, sea or air, it’s communication, communication, and communication.

Or as Russell Waterhouse of the American Companies, a full service freight forwarder based in Texas puts it, “details, details, and details.”

However one chooses to characterize the art of shipping sensitive and expensive medical equipment, especially such big ticket items as MRIs, CT Scanners or Mobile MRTs, it is complex, labor intensive and fraught with potential pitfalls. Often what starts as a smallish, almost innocuous hiccup ends in a witch’s brew of trouble. So it’s obviously best to be as proactive and detail obsessive as possible when transportation’s the issue on the table.
“Communication is absolutely essential so that all the parties know exactly what’s expected,” says Todd Partridge, a principal with the Iowa based logistics firm, the CTS Companies. How valuable is the shipment, any special packing and handling requirements, what is the physical situation at origin and destination, need a forklift, which company’s handling the rigging, any impediments to loading and unloading? That’s just a scant few of the countless number of questions that must be addressed at the outset. More important, all the answers should be spelled out and double-checked long before the de-installation, packing and crating process begins.
“Establishing clear cut guidelines, getting them all in writing and then following the instructions” makes the process of shipping much more customer friendly, Partridge says. Still as everyone who talked to DOTmed Business News readily admits, given the nature of transportation and the variety of “force majeure” factors the are inherent to it, there will always be an element of uncertainty.
“A trucker’s job is simple, transportation from point A to point B with no damage,” says JFK Trucking, Hudson, OH, principal Joseph Kilfoyle. “But you can’t control road conditions or if a tire blows.”
So until the truck pulls in to offload the shipment, no one breathes easy. And, in fact not even then. As Bob Ryan of Berger Transportation Solutions, Minneapolis, MN, reminds, “what happens when the truck pulls in but there’s no Masonite to lay down on the floors to roll the equipment over?” Or, perhaps, it’s time to calibrate an instrument before final lockdown and there’s no cadre of technicians around to do it. What then? The answer usually is charges keep mounting.

Moving any substantial or valuable amount of goods either domestically or internationally is a complex equation involving a buyer, a seller and an infrastructure of companies that actually execute the transit, unless, of course, buyer and seller decide to handle it themselves.

Certainly there are fairly straightforward occasions involving a single package, under one hundred pounds, that can easily be handled by one of the integrated shippers like FedEx, UPS or DHL. For somewhat larger crates up to the dimensions of 4′x 4′x 5′– an experienced motor carrier could probably truck it from New York to Los Angeles for something in the neighborhood of $500-750.
But for multiple piece shipments weighing tons, heavyweight and delicate MRIs or CTs, moving such expensive objects can be so intricate that “you could write an entire book about it,” says Erik Cruz of the New Jersey based logistics company, Logical Solution Services, Inc. And those very complexities are the main reason why logistics firms, full service companies that oversee all aspects of transportation, are thriving.

Growth has been spurred by the increasing globalization of the medical equipment business, and since transportation in the 21St century is beset with security, regulation, customs and tax challenges, the turnkey services provided by specialist logistics companies is an attractive alternative to coordinating the job in-house. Retaining logistics providers often makes as much sense on the domestic side too
Though it’s particularly difficult to arrive at accurate industry averages due to the nature of the business and all the interlocking parts.

Logical Solution Services, Inc. , Attends the RSNA (Radiology Society of North America) 94th Annual Meeting at McCormick Place in Chicago. The purpose of the conference is to bring the radiology community together to witness the latest advances in imaging research and technology. More than 60,000 medical and science professionals attended the world’s largest medical meeting to witness the best and most recent developments in radiology scientific research and education.

Logical Solution Services attends 2007 American Forest and Paper Conference in NYC, see advertisement on page 14.

Logical Solution Services Expands Into New Corporate Office

Logical Solution Services announced that it has purchased a commercial property in Lakehurst, New Jersey. According the the company the property which is currently under construction, willl be the locations of Logical Solutions new corporate headquarters.

Erik Cruz, customer services manager for Logical Solutions expects the renovation to be completed the summer of 2007.

“The new facility will host up to 15 employees. The future is looking very promising for our young energetic company,” Cruz said.

Logical Solution Services, Inc. , Attends the RSNA (Radiology Society of North America) 94th Annual Meeting at McCormick Place in Chicago. The purpose of the conference is to bring the radiology community together to witness the latest advances in imaging research and technology. More than 60,000 medical and science professionals attended the world’s largest medical meeting to witness the best and most recent developments in radiology scientific research and education.

Logical Solution Services attends 2006 American Forest and Paper Conference in NYC, see advertisement on page 18.

Logical Solution Services attends 2006 American Forest and Paper Conference in NYC, see advertisement on page 20.

Logical Solution Services attends 2005 American Forest and Paper Conference in NYC, see advertisement on page 20.

Logical Solution Services attends 2005 American Forest and Paper Conference in NYC, see advertisement on page 29.

Logical Solution Services attends Walden’s Convention in NYC, see our ad on page 11.

Logical Solution Services attends Walden’s Convention in NYC, see our ad on page 22.