Third-Party Logistics Management

1. Global Logistics & Transportation Solutions 2006 - Issue 3
SMART BUSINESS DECISION
Selecting a web portal that's right for your company
For many companies improving supply chain performance “Shippers want access to timely and reliable data and information views. “At the beginning you have an order or
is all about the data. Shippers want a clearer view of their events,” said Michael Loup, BDP CIO. “That requires three shipment moving on one or more modes of
shipments—faster, better, more up-to-date information, formats: track and trace; data mining, which are the transportation,” he said. “There is core information
when they want it and how they want it. metrics and reporting functions; and the supply chain associated with each order or shipment that is universal.
That’s a tall order but a necessary one. Inability to get event management (SCEM) function, which covers the We simplify it down to the information we consider to be
advance visibility of information can be costly. But with estimated and actual dates, and notification of events common among all shipments. Not the lowest common
the right web portal, shippers can move closer to end-to- that were supposed to happen, didn't happen, etc.”
end control of their supply chains. The right portal can Most companies today understand the need to utilize a
add value by freshening business practices and full-service portal, Loup added. “Certainly that is the case “We feel we can offer a unique
standardizing processes, which help reduce costs, for global organizations, which have to deal with multiple combination of visibility in all
resulting in increased profits. time zones and regions. They need tools and information three areas of tracking, data
mining, and event management.”
because human resources are either not available or
Michael Loup, BDP CIO
What to look for processes don’t exist. Helping to make the world a
It is important to know what to look for and what you smaller place is one of the goals of our new customer
should expect from your provider’s portal capabilities. service portal, BDPSmart.com,” Loup said. “It gives denominator but the common denominator. Information
Shippers should be cautious when selecting technology customers access to an entire global suite of trade from a customer’s ERP application can add to the value of
solutions and not cobble together a number of capabilities logistics business application tools. We feel we can offer this information.”
from various resources, hoping to get the visibility they a unique combination of visibility in all three areas of The challenge and the benefit of portal implementation
seek. Instead, look for a resource that offers many, if not tracking, data mining, and event management.” is that it forces shippers and providers to standardize data
all, of those capabilities in one system. and processes. “Because someone in Asia may handle a
Technology that makes logistics easier shipment differently than someone in the US, the data
The key benefit of a full-service portal is customer self has to look the same to the customer because, quite
I N T H I S I S S U E service, Loup pointed out. “The information customers rightly, they don’t care where the shipment originates,”
Smart business decision: Selecting a web need is all there,” he said. “Getting data in advance lets Loup said. “BDPSmart works for all of our customers
portal that’s right for your company shippers manage their own process, rather than having to globally in all regions.”
Centralized vs. Decentralized Compliance communicate with resources and vendors around the
world. It is not always convenient calling a service Track & Trace
It’s now or never - Why you need a trusted
resource for expedited shipments provider in the US if you are a customer in Hong Kong. Users—customers and BDP staff—can create their
Customers ultimately want self-service. Even if they prefer own dashboard configuration to meet their needs. Clients
Case Study:
Eastman Chemical Company – Asia Pacific to pick up the phone and call their local contact, that can access total shipments data or just specific shipments'
Strategic partnership helps Eastman improve contact person may not have the answer and has to details, e.g., shipments out of the US into a certain
service while keeping costs competitive contact someone else for the information. All of our region. A window of shipments can be viewed from an
Regulatory Watch - Extensive Changes to transactions that we execute around the world actually extensive historical database.
the Harmonized Tariff Schedule of the feed into BDPSmart.” A “my user” setup can be designed from a number of
United States
Loup explained that the portal application can be column data elements—shipper reference, country
Risk Management - Protecting your rights customized for users for certain aspects, such as authority destinations, ETA date, carrier, etc. By selecting a range of
to file a cargo claim
to subsets of the transactions and customization of (continued on page 3)

2. CENTRALIZED VS. DECENTRALIZED COMPLIANCE
By: Adrienne Graddy, BDP Director - Compliance Solutions
In determining whether to centralize or decentralize a
compliance program within your organization, the
assessment and design should ideally consider the
CENTRALIZED DECENTRALIZED
context, scope, and complexity of your business
activities and legal structure. Factors such as Single business unit “selling” compliance Ownership and loyalty belongs to the local
age/maturity of the corporation, corporate culture, services to other business units unit
structure and operating capabilities, as well as legal and Less local autonomy Risk assessment is bottom-up
compliance performance history must be given Risk assessment is top-down Roles can be clearly defined or muddy
thoughtful consideration. Any successful compliance Roles are clearly defined
program, whether centralized or decentralized is all
about accountability.
More likely to have a single compliance More likely to have a compliance
Internal resources and influences to officer with central, overarching authority committee, lead by the local compliance
consider: Should have access to company board of “expert”
Who has compliance information? directors May or may not be a central authority
How often are Customs surety bonds reviewed for May or may not report into the compliance
adequate coverage? officer
Who is responsible for new product sourcing? No access to board of directors
Who classifies your product, identifies potential
preferential treatment (free or reduced duty programs),
participating government agencies requirements (such Costs more easily controlled Costs more easy to monitor, but less easy
as FDA, EPA, etc.), country of origin marking, and Top-down risk assessment gives accurate to control
receiving/discrepancy reporting? reflection of risks at all levels of the Bottom-up risk assessment gives a more
corporation for prioritization & action in-depth analysis of the liability, in that
External resources also play a part: unit only
Customs, FDA, and other participating government
agencies Training is uniform throughout the Training is tailored to the specific needs of
Transportation Carriers corporation that unit
Customers, both internal and external Greater ease of communication to all levels Relies on local “experts”
Customhouse Brokers of the corporation Communication comes from local leaders,
In-house/outside Legal Counsel Able to set compliance policy or enforce not necessarily in line with overall
Manufacturing best practices company wide corporate goals
Overseas Suppliers
Surety Companies
Increasing regulatory preference Compliance staff embedded in separate
How do your external resources for centralized organizational structure units needs to be managed through a
function? coordinated program or person
Do your service providers work in a centralized or
decentralized environment?
Corporate “policing” Differing opinions
Does the service provider's environment mesh with
Overkill “Loose cannons”
yours?
Control issues Control issues
How much authority does the service provider have to
classify and adjust value?
At right is a comparison chart of centralized and Regardless of which model is more representative of For more information on this topic, contact Adrienne
decentralized models. Determination of the model is not your compliance program, or if you are in the process Graddy, BDP Director - Compliance Solutions, at
an “either/or” situation. Often companies do not have a of developing or revamping your compliance program, agraddy@bdpnet.com, or (847) 350-2156.
strictly centralized or decentralized compliance program. consistency, a good compliance manual, and
Companies have a hybrid of the two models. communication are the keys to your success.
www.bdpinternational.com 2

3. SMART BUSINESS DECISION
Selecting a web portal that’s right for your company
(continued from page 1) Just in case days after it happened, or if it has been missed two
weeks or months, the SmartTracking capability can Due to the critical nature of event management, days later and there is no actual event recorded.
show, for example, one month back and two months Loup believes SCEM will see the most growth because “We don’t want to flood customers or BDP users
forward. Users can select weight formats in pounds or it must take into account different modes of with emails,” Loup emphasized. “The event
kilograms, and different date/time formats. transportation, as well as different events for each management application will run in the background
Just about any information about the shipment mode. “Once you have all those events, it’s a question several times a day, and every shipment that meets
can be viewed: reference numbers, carrier, vessel of how do I want to manage them, or which events do these criteria will get one email, in which will appear
name, ports, plus details on the product and its I as a shipper or BDP user, want to see?” he said. these three alert categories. In each category there
weight. Data also shows confirmed sail date, when will be multiple shipments that meet each criterion,
documents were sent, how sent (including airway bill together with line item information. I can also select
BDPSmart’s data mining tool can
number), so that users located at the destination can those products for which I want event notifications, as
dig deep into shipments and
pick up the shipment documents. There is a hyperlink well as types of moves, country of destination.”
provide information sliced and
with the airway bill number, so if multiple packages
diced in a number of ways.
Made to measure
were sent out, they can be identified by their BDPSmart’s data mining tool can dig deep into
individual airway bill numbers. The system can also shipments and provide information sliced and diced in
hyperlink with the steamship lines’ systems by There are currently three categories of alerts: a number of ways. A customer may want to view a
linking via the container number. Pre-alert: When clients or BDP users want to be group of shipments. It will let them pick multiple areas
BDPSmart has a very robust document storage, alerted a certain number of days before an event and at a glance see everything shipped to and from
retrieval and printing system. Depending on the happens, e.g., notification one day before a sail date any and all locations. It is a dynamic list—every time
country destination and customer requirements, every that shows the shipment will be sailing the next day. a customer begins shipping to or from a new place, the
shipment requires a different set of documents. “The Plus or minus estimated: If an estimated date shipment is automatically included.
goal is to use electronic documents more often than changes by plus or minus a certain number of days, Users can select inventory graphs that actually
couriers,” Loup said. “Not only is there hyperlink then clients and BDP users may want to know and match the numerical data and mask it into individual
access to shipping documents, we also have many make adjustments. graphs, such as carrier usage by ocean freight, by TEU,
ways to receive documents associated with a shipment Actual dates: This can be a plus or minus in the shipments by month, and TEUs by month. There are
(pdf, scanned, etc.) and they are all viewable through actual number of days. Using plus/minus two days, data graphs for exports, imports, carrier metrics,
a single link on BDP’s SmartTracking.” users can ask when an actual event has happened-two supply chain, non-conformance metrics. Users can also
access the detail data for each graph, which allows
excellent drill-down reporting capabilities. The system
also will make metrics a default for a particular need
(e.g., shipments per month), so that every time a
user, who selects it and signs on, those metrics will run
automatically and will pop up on a screen.
The system’s standard inventory reports are also
being expanded. Data mining reports via a BDPSmart
user report capability is an ad hoc report development
tool that allows users to build their own customized
reports with export into MS Excel.
For more information on the BDPSmart portal
and its capabilities, contact Michael Loup, CIO,
at michael.loup@bdpinternational.com, or
(215) 574-7974.
3 www.bdpinternational.com

4. IT’S NOW OR NEVER
Why you need a trusted resource for expedited shipments
A hot shipment from Europe that requires a dedicated that has been specified in the purchase agreement, stated. “Let’s say you have a
surface move-in this case a truck waiting for freight to there could be hefty financial penalties, cancelled domestic US next flight out-
come off the airline in order to move it straight to the orders and the potential loss of that major customer.” perhaps a line-down
Kathy Blount –
customer’s door. A shipment of fire pumps to Alaska to Blount said that fitting the need with the right situation—a manufacturer BDP Global Air Freight
Product Executive
meet the last sail deadline of a vessel in Anchorage. product is what many shippers now demand for may need a machine part to
Ladies’ undergarments for a major US retailer, shipped expedited. “Carriers and providers are expected to get the production line up
from Indonesia and Hong Kong to arrive at a recommend the best fit, which can include a and running, or they ran out of raw goods and need to
distribution center within a very narrow window, in combination of air and ground. This requires flexibility expedite those goods to keep the line up. A good
order to be trucked to its final destination in on the part of the service providers.” Although truck resource should be tracking that plane, and monitor its
Mississippi. And a 36-hour, non-stop movement of transport is quite price-competitive compared with air, progress in real-time. If there is bad weather and they
cost is not generally the deciding have to take an alternative route and it adds time to
factor for shippers who need an the flight, then they can let the truck that's waiting at
“In the world of expedited shipments,
expedited service. Getting the the other end know, and inform the customer of the
there's no room for error…shippers look for
shipment from point A to point B is exact status so that contingency plans can be
providers who are going to communicate
what matters. implemented. A line down can cost thousands of
and deliver.”
Expedited shipments come in all dollars for each minute. It can literally stop a company
Kathy Blount – BDP Global Air Freight Product Executive
shapes and sizes. Each situation is in its tracks. While it is impossible to control all the
unique; no two are identical. “In variables in transportation, we can certainly track it,
cargo involving teams of truck drivers for oversized almost all cases, the cost of the heightened level of trace it, and report on it.”
freight that will not fit in an aircraft. service, the minute-by-minute tracking updates and Shippers also should look for providers with a
All these shipments have one common thread: communication far outweigh the cost of the product strong US presence and deep knowledge of the US
there is absolutely no room for error. No near-miss not getting there,” Blount emphasized. “That's the market, as well as experience in every facet of the
shipments. And certainly no excuses. bottom line. For example, in the construction industry highly specialized niche of expedited shipments. They
it is not uncommon for a product to have to be at a should have solid experience with transportation
Welcome to the world of expedited particular location at a specific, committed delivery procurement and logistics expertise, backed by
shipments time. Engineers and construction workers are planned information visibility and the infrastructure necessary
Every corporate procurement manager, materials on a very tight schedule and our customers do not to deliver that visibility—expert analysis, planning,
manager or plant manager, who has ever faced similar want them standing around waiting for a shipment to execution, including destinations, shipment status, and
demands, knows the value of a reliable expedited arrive. It’s the same with production machinery that corrective action. There should be an optimum range
shipping resource. The 865 pounds of fire pumps to technicians are waiting to install. If the freight doesn't of offerings: product categories, costs, and modes.
Alaska is a high visibility shipment for the customer— make it, or it is late, people are getting paid for down According to Blount, there are three primary
it has to make it. The customer needs to know that the time and the client could be staring at significant expedite services: next flight out, dedicated surface
freight is hand-held throughout. losses and budget overages.” moves (US domestic), and charters (US domestic and
Ditto for the charters from Indonesia and Hong international). BDP’s expedite products, known as
Kong. The freight will be available late December What should shippers look for in a BDP/now!, are a one-stop shop, Blount pointed out.
2006 and must arrive at a specific time. The move will provider of expedited products? “We can service the customer in just about any area
require two charter planes, as well as commercial air. To Blount it's simple. “Shippers look for providers of need. It is important that expedite providers
In this particular case, three months out, the client who are going to communicate and deliver,” she (continued on page 7)
knows it is going to be a challenging transportation
issue and is preplanning in order to be ready. They
know they are going to be in a pinch. BDP/now! expedited services
“When you get the request, you must meet the Next Flight Out: Counter to Counter – Under 70lbs per piece; Cargo - Over 70lbs.
retailer's deadline,” said Kathy Blount, BDP Global Air
Freight Product Executive. “The cost of not getting the Air Charter – BDP's charter experts offer multiple aircraft charter options to fit the size of each
freight to the destination far outweighs the possible shipment, when commercial airline schedules and capacity aren’t adequate.
penalty for that shipment not arriving on time. When Expedited Surface – Exclusive-use vehicles from cargo vans to 53 foot drop-center tractor
a big box retailer or a major department store runs an trailers, and everything in between. Equipment to fit any requirement.
ad and they don't receive the product by the deadline
www.bdpinternational.com 4

5. Case Study: Eastman Chemical Company – Asia Pacific
STRATEGIC PARTNERSHIP HELPS EASTMAN IMPROVE SERVICE
WHILE KEEPING COSTS COMPETITIVE
CHALLENGE SOLUTION
Eastman Chemical Company’s Asia Pacific organization Identify Logistics Providers who perform at
operates in a highly competitive market. To enable the a high level, are flexible, willing to listen
company to focus on its core competencies, Eastman and respond, and who work in partnership
demands high quality service and resourceful solutions—not to provide the right solutions and value for
just capabilities—from its Logistics Service Providers (LSP). Eastman and its end customers.
CHALLENGE Eastman Chemical Company is one of the top 10 coatings, adhesives and specialty plastics products, and
As manufacturers continually expand their operations, global suppliers of custom-manufactured fine chemicals is a major supplier of cellulose acetate fibers.
logistics service providers and freight forwarders must for pharmaceuticals, agriculture and other markets. In Asia Pacific, Eastman requires its logistics
scramble to keep pace. Due to its continual growth and Headquartered in Kingsport, Tennessee, U.S.A., the partners to help manage the complexity and scope of
customers’ demands, Eastman Chemical Asia Pacific company is the world's largest producer of PET its regional service offerings, and critical online
can’t afford to wait for its LSPs to play catch-up. polymers for packaging, provides key differentiated visibility of inventory.
SOLUTION standpoint. We utilize BDP’s expertise in Keeping product moving
Seeking a culture that goes documentation, freight forwarding, importing and “BDP is able to provide Eastman with
beyond capabilities exporting, customs clearance, warehousing, as well documentation on a global basis,” said Capt.
Located in Singapore, Eastman Chemical Asia as IT linkages to keep our processes flexible.” Raymond. “This enables us to keep shipments
Pacific Pte Ltd (ECAP) is the hub for Eastman “In essence, BDP allows us to focus Eastman moving throughout the region. We view BDP as an
Chemical Company's supply chain and logistics resources on manufacturing and distribution of information provider, keeping Eastman current with
management in the region. Eastman relies on BDP chemicals,” added Capt. Raymond Heman, Eastman’s our carriers, shipment confirmation and tracking. BDP
service for select outbound (since 1996) logistics Regional Logistics Manager. Morton added that, “As systems manage the data and provide us with reports
lanes from the U.S., and outbound/inbound/domestic our marketing of chemicals, plastics and fibers in the and oversight capabilities. This enables us to stay on
logistics in Malaysia, China, Thailand, Singapore, and region increased, BDP has played a strategic role in course and continue to get product to our customers
Hong Kong, including warehousing in Shanghai, helping to continuously improve Eastman service on a timely basis.”
Singapore and Hong Kong. levels while keeping costs competitive.” "Visibility is critical,” said Tharin Walker, BDP’s
ECAP’s Director of Asia Pacific Customer Supply At frequent planning sessions, Eastman and BDP Global Chemical Team Manager, Asia Pacific Region,
Chain Services, Tom Morton, is responsible for all partner to respond to specific issues on behalf of in Singapore. “Eastman can go online and view
supply chain and business operations support in the Eastman’s clients. These are meaningful, objective inventory levels at any of their storage locations
region. “Since we began working with BDP in Asia in discussions on how best to help Eastman help its in real time. We work closely with Eastman at
2000, we have seen fairly significant cost reductions clients. “We want BDP to be a part of that process,” many locations throughout Asia, so BDP staff at
and improvement from a service and reliability Morton said. Singapore can, for example, see the status of
import Customs clearance that BDP staff in
5 www.bdpinternational.com

6. Shanghai may be handling. We want to stay on “We have realized certain savings from our documentation and freight forwarding.”
top of everything that moves.” warehousing operations, where BDP has helped “Eastman says they do not want to build a
with benchmarking,” Capt. Raymond said. “In supplier-vendor relationship,” Walker adds. “Instead,
Stock and load addition to reduced costs with our LCL shipments, Eastman wants a partner. Morton and Capt. Raymond
“Freight forwarding and warehousing go hand-in- we are working with BDP to streamline some of want their own staff to look at BDP as an extension
hand in Asia,” said Walker, "which is why much of our business processes. This includes letters of of Eastman operations throughout the region. As
our business services include warehousing elements. credit documentation.” BDP is preparing to transfer Eastman executes its growth strategy, BDP is keeping
In Asia, countries are not linked by a common the documentation and preparation of letters of pace through delivery of ever evolving service values.
Customs zone, a common landmass. The ‘common’ credit from BDP’s York, Pennsylvania facility in the This is not a cookie cutter relationship.” Eastman
inter-country mode of transportation is ocean.” U.S. to Singapore. recently received a prestigious supplier-of-the-year
For Eastman, the benefits could be substantial: award from one of their major clients, following a
“In Asia, we look at BDP as Faster processing because the complete document joint plan with BDP to improve delivery performance
a lead logistics provider
set gets to the bank more quickly and ultimately and reliability for that client. “It’s another example of
(LLP), to manage other
freight forwarders and to the buyer faster the strength of partnering,” Walker added.
carriers as an extension of Eastman gets paid much earlier For Morton, it is also about trust and reliability.
Eastman’s logistics arm.” Savings in courier fees as the sales and the “In Asia, we look at BDP as a lead logistics provider
Tom Morton – Director of
Eastman Chemical Asia Pacific banking activities are now located in Asia (LLP), to manage other freight forwarders and
Customer Supply Chain Services Eastman can get answers to any document carriers as an extension of Eastman’s logistics arm.
questions they may have during the same There is no provider that has it all. However, BDP’s
“As Eastman’s warehousing relationship with BDP business day, instead of waiting until the next willingness to sit down and discuss options, listen to
expands, the twin issues of security and compliance business day due to the difference in time zones. feedback and to develop further capabilities to better
are important to us,” said Capt. Raymond. “In meet our needs and our customers’ requirements—
addition to Eastman’s in-depth corporate and No cookie cutters allowed really are differentiators.
security compliance processes, BDP provides an What does Eastman AP look for when selecting a
provider? “Eastman looks for a common corporate “In essence, BDP allows
additional check-step in the AP region to ensure that us to focus our staff
products moving in and out of Eastman warehouses culture that goes beyond just providing capabilities,”
and resources on
conform to the regulations for each of the countries. Morton pointed out. “Our partner should be willing manufacturing and
and have the ability to identify and recommend distribution of chemicals.”
We look to BDP to assist us in managing these
Capt. Raymond Heman -
critical processes.” creative solutions that fit our needs, where we can
Regional Logistics Manager
While many providers may have regulatory look at improvements together. We want local
compliance capabilities within the U.S., their knowledge for each country in which we do business, “It is that willingness to listen and to work in
expertise elsewhere is not as deep. “BDP is very up- plus quality freight forwarding and documentation partnership, to provide the right solutions and fill the
to-date on regulatory changes,” Capt. Raymond capabilities.” gaps where it makes sense—those really set BDP
emphasized, “which not only helps us to adhere to “Service from local BDP staff in the various apart. BDP looks for ways to be flexible in how
Eastman protocols but also with those of various countries has been very good,” Capt Raymond said. solutions can be provided, so that there is value for
countries in which we operate.” “We see a common culture within BDP’s local offices our end customers and for Eastman.”
that we want—they are very supportive and
Keeping costs down and service up proactive, and are very willing to explore ways of
Successful logistics management means minimizing improving processes and operations. In terms of skill
disruptions, reducing risks, and identifying solutions. sets, we have found that BDP hires people with local
It’s also about controlling and reducing costs. knowledge—a very sound knowledge of
www.bdpinternational.com 6

7. R E G U L AT O R Y W AT C H
PERIODIC UPDATES ON US CUSTOMS POLICIES AND OTHER REGULATORY ISSUES
E X T E N S I V E C H A N G E S T O T H E H A R M O N I Z E D TA R I F F
S C H E D U L E O F T H E U N I T E D S TAT E S
Effective January 1, 2007, the US tariff number more present subheadings, the new duty rate will be be aligned with the 2007 US Harmonized Tariff.
that applies to your imported product may very well derived from the existing subheading that accounts for Any changes to the US Harmonized Tariff will have
change to a different tariff number. In the amended a preponderance of the trade. to be approved by the US Congress before taking
2006 version of the US Harmonized Tariff that we ITC has published the proposed amendments— effect. However, we anticipate that if Congress does
use today, there are over 10,000 possible 10-digit publication 3851—to the Harmonized Tariff on their make a change to the proposed amendments it will
classification codes. In January about 1,000 of these website. You may find it helpful to review Appendix D be minimal. Be assured that BDP’s Import and Export
numbers will be changed, eliminated, or merged into of this document as it is a correlation table showing areas will stay on top of the proposed tariff and have
new headings and subheadings. Changes will occur in the current HTS number along with the proposed HTS our automated systems current and ready to go on
83 of the Harmonized Tariff’s 97 chapters. number. All ITC discussion and documentation is of January 1, 2007.
The International Trade Commission (ITC) has the legal text, i.e., the eight-digit level. As the HTS
advised that new classification subheadings will be number required on documentation is 10 digits, we Should you have any questions or need
revenue neutral, i.e., if you are paying a three percent will have to wait until a later date to learn the final assistance in reviewing your classifications, please
duty today, you will pay a three percent duty in 2007. two-digit Census statistical suffix. contact Adrienne Graddy, Director Compliance
However, our experience with previous “revenue As the Department of Commerce Shipper’s Export Solutions, at agraddy@bdpnet.com or (847) 350-
neutral” tariff changes has shown a neutral monetary Declaration (SED) Schedule B is derived from the 2156, or any member of the BDP Corporate
change for the government, but many times a positive Harmonized Tariff, the number used to describe your Regulatory Compliance Team.
or negative change for the importer. For example, export product will also be affected. No word from
where a new subheading is a combination of two or the DOC at this time as to when the Schedule B will
IT’S NOW OR NEVER RFID –
Where do we go from here?
(continued from page 4)
understand that a particular need or shipment requires extra attention, and fully
appreciate the sense of urgency. At BDP, we want to be sure that in our daily interaction When it comes to RFID compliance with Wal-Mart, suppliers have done
with customers that we are able to identify and service their special needs, perhaps even little more than slap the tags on their cases and pallets, receiving little
anticipate those needs, before they tell us they actually have that need. Our HazMat or no useful data in turn, according to a recent article in CIO magazine.
expertise is helpful, too.” It seems that many companies have not invested in the technology,
Blount explained that a “normal” shipment can suddenly become a candidate for let alone apply it to processes that can show payback. Many of those
expedited service because of changing circumstances. For example, a customer might miss that have are asking: “What do we do with the data now?”
a cut-off with a forwarder or integrator and they may elect to utilize a commercial flight, A Forrester Research survey of retailers stated that just 24 percent
usually the next flight out—if not, it’s not going to get there overnight. Then there is said they have identified RFID’s business value. And Aberdeen Group,
“frustrated” freight, which is freight that has moved but for some reason has become who surveyed 250 executives, said more than 50 percent of
detained. Anyone who has traveled by air with any regularity knows this story all too well:
respondents claimed the inability to show a value proposition for RFID
delays happen. Perhaps cargo had to be offloaded due to mechanical problem with the
was the single most difficult obstacle in gaining support for the
plane or the plane had to land at an alternate airport. “If the plane is going from Los
technology. However, 60 percent said RFID holds great potential value
Angeles to Seattle and cannot land due to weather, it could be forced to land in Portland,
for their companies, and two-thirds said RFID would help them create
Oregon. “That is a good four- hour drive by truck back to Seattle,” Blount explained. ”The
frustrated cargo may be recovered and loaded onto a dedicated truck and moved directly significant competitive differentiation in their business processes.
to the final destination if the circumstances surrounding the shipment warrant the While value identification may be elusive, so are the necessary
heightened service. In the world of expedited shipments, there is no room for error. skills to implement RFID. A Computing Technology Industry Association
Performance is king and everyday is the Superbowl in the world of expedited!” survey of high-tech companies showed that 75 percent said the RFID
For more information on expedited shipment services, contact Kathy Blount, Global Air technology talent pool is insufficient to meet their needs.
Freight Product Executive, at kblount@bdpnet.com, or (310) 259-9988.
7 www.bdpinternational.com

8. RISK MANAGEMENT
Protecting your rights to file a cargo claim
By Allan Kline, BDP Risk Manager - Transportation More Rules. As a claimant you are also Follow up is vital
required to hold the cargo so that the insurance The process does not end when the formal claim is filed
If you have ever had cargo claims denied because company or carrier representative can inspect the because there are other critical deadlines that can invalidate
you failed to put an air carrier on notice within 14 damaged goods. It is good practice to hold the the claim. In ocean transportation the claimant has one
days of delivery, or were forced to accept a less cargo and the packaging until the claim is settled. year to take legal action against the carrier. If the claim is
than adequate settlement offer from a carrier However, in practice, this is not always possible. not settled and legal action is indicated, suit must be filed
because you did not hold the damaged cargo for To protect the claim, the carrier and or the within one year from the date of delivery or scheduled
inspection, you are not alone. Economic pressures insurance company should be contacted (in delivery. For domestic transportation the time limit to file
on carriers and insurance companies are forcing writing) and a date set to inspect the cargo. In suit is two years after the first denial by the carrier.
adjusters, and claims administrators to look for many cases no inspection will be done, but if the For more information regarding this topic, BDP Risk
every possible way to avoid paying cargo claims. cargo is disposed of without the opportunity to Management is making available, while supplies last, the
So it becomes more important than ever to follow inspect, the claim may be denied. “Ocean Cargo Claims Handbook.” To obtain your copy send
the rules. an email to akline@bdpnet.com. Be sure to include your
To Survey or Not name and mailing address.
Rules? The question of hiring a surveyor is one that is
Every time cargo is shipped, domestically or often asked and is not easily answered. In the
internationally, the movement of that cargo is majority of claims a survey is requested only if the
subject to certain rules. Shippers and Consignees value of the damage or loss is over a certain dollar
alike should be familiar with those rules—or terms value. The trigger can vary from company to
and conditions of transit—which are usually found company but in many cases it is around $2,000 A quarterly publication for BDP International clients
on the back of the bill of lading. In some cases only USD. If the cargo is insured, survey is not an issue and trade partners. Send comments, suggestions,
plus name/address changes to:
a summarized version is found on the bill of lading; that the claimant needs to worry about; the Arnie Bornstein, Director Marketing & Corporate
Communications
for the full details it may be necessary to access the insurance company will make the decision and pay BDP International, Inc.
carrier’s website. If a contract exists that for the survey. World Headquarters
510 Walnut Street
supersedes the terms and conditions of the bill of If the cargo is uninsured, the survey becomes the Philadelphia, PA 19106, USA
215.629.8493 or abornstein@bdpnet.com
lading, both shipping and receiving personnel responsibility of the party making the claim, and if Editorial Advisor:
should be made aware of the terms. Understanding one is done the cost is paid by the party that hired Michael Ford – Regulatory Compliance and Quality.
Production: King’s Road Consulting &
the terms and condition of transit is the first step in the surveyor. The survey cost may or may not be Moss Design, Philadelphia.
protecting a claim. recoverable but it should be added to the value of Old York Road Publishing, Ivyland, Pa.
Notice of Intent to File a Claim. Virtually every the claim—it never hurts to ask.
mode of transit requires that, in the event of
damage or loss, the cargo owner, usually the Formal Claims
consignee, must note any exceptions on the bill of Filing a formal claim is done once the value of
BDP U.S. locations: Atlanta, Baltimore, Boston, Charleston, Charlotte,
lading or delivery document. But the right to make the loss is established. The formal claim must be in Chicago, Cincinnati, Dallas, Edison NJ, Grand Rapids, Harrisburg,
a claim is not secured by noting the exception on writing, and must provide some specific information Houston, Indianapolis, JFK/NY, Laredo, Los Angeles, Miami,
Milwaukee, Norfolk, Philadelphia, Philadelphia Airport, San
the delivery documents only; in most cases it is to the carrier, such as the shipping data, a Francisco, York PA.
also necessary to notify the carrier in writing of description of the damage or loss, the value of the Subsidiaries: BDP Asia Pacific, BDP Canada, BDP International N.V.
any visible damage as soon as possible and within goods damaged or lost, and some documents to (Belgium), BDP International S.A.S. (France), BDP International
GmbH (Germany), BDP International Srl (Italy), BDP Netherlands,
the requirements of the terms and conditions of support the claim such as the bill of lading and BDP Brazil.
transit. For example, a claim for damage can be delivery documents, photos or survey report, etc. Joint Ventures: BDP/Bernard, BDP Interamerica, JB Cargo Group,
denied by an air cargo carrier if the written notice While there is not a required form for a formal S.A. de C.V., Mexico. BDP International has Global Network Partners
in more than 113 countries.
of intent is not made within 14 days of delivery, if claim it should always be made in writing, or on the
moving on an IATA standard form Bill of Lading. carrier’s claim form if one is available.
Miss the deadline by one day and the claim will be
time barred.
www.bdpinternational.com