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Ecommerce Expert Explains How to Develop an International Supply Chain

international supply chain

Ecommerce Expert Explains How to Develop an International Supply Chain

When selling products, you may need to import them from other countries and have them delivered to a warehouse or home. There are different ways to do this whether by air, train, or by sea. During this process, there are fees and regulations you should be aware of.  I will be explaining how to develop an international supply chain with three key elements: the type of shipping, selecting and booking your freight, and post-delivery supply chain.

Types of Shipping

There are several well-known types of shipping, such as Free Carrier, Free Alongside Ship, Cost and Freight, Cost/Insurance and Freight, Cost Paid To, Carrier and Insurance Paid To, and Delivery at Place, among others. In my experience, I have found three types that are used more than the others: Ex Work, Free on Board, and Delivery Duty Paid.

Ex Work means your goods are at the manufacture’s warehouse and you are responsible for shipping the product to your destination. In this case, you will have to pay for customs, customs bonds, taxes, and any charges that may come up during the process.

Free on Board (FOB) is when your product will be delivered to the port or ship. What does this mean? The manufacturer will get your product on the boat, but you will be in charge of getting it off the ship, through customs, and delivered to you. What I do not like about this type of shipping is that when the manufacturer drops the product off, it is unsupervised, and my insurance does not kick in until the next step. There is an uninsured moment, so I recommend avoiding FOB shipments.

Delivery Duty Paid (DDP) is one I deal with all the time and I also call it Door to Door. The goods are shipped to you and delivered to your warehouse or your house location. Whoever you negotiate with will pay all deliberate duties, and it is a good way to avoid unseen costs.

These three terms are extremely important when negotiating with manufacturers. I usually quote Ex Work or DDP, because, throughout the entire process, there is someone in charge of the shipment.

Select Freight

A freight forwarder is a person or company that deals with the shipment of goods from the manufacturer to a customer, market, or point of distribution. You have traditional ones, like DHL and FedEx, which more commonly do air shipping. DHL is usually the most expensive option, but the fastest large provider and can take two to ten days to deliver. FedEx can take up to two weeks, depending on the shipping type.

You can tell your freight forwarder where to pick up your product and where to deliver them to. The forwarder will handle the rest. They help you in handling customs, bonds, and taxes. There are plenty of companies that do this and can help you with all forms of transportation. I use freight marketplaces, which work like Expedia, giving you options and quotes from several freight forwarding companies. I regularly use Freightos and have had a good experience. Pro-tip: make sure to insure the full shipment, and don’t fudge your invoices.

Domestic Supply Chain

Once you have chosen your type of shipping and selected a freight forwarder, you need to find a place to store and ship your goods. What you will select depends on your business model. Some common solutions are Amazon FBA, delivering it to your warehouse, or use a third-party logistics or fulfillment center (3PL).

The ideal supply chain would be choosing Ex Work, using a freight forwarder, and ensuring shipment the entire way. You will have to pay for the cost of freight, taxes, and tariffs. The quickest route would be shipping to California, and from there, to your 3PL or warehouse. You can put everything in one location and distribute to the rest of the country.

Mastering these three key elements will guarantee the successful shipment of your goods and the success of your commerce. Having a good partner or a 3PL will add value to your business. It is important you do your research before you start importing products.

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Scott Bartnick is a strong professional leader with a degree in industrial and systems engineering, specializing in public relations. Bartnick is a serial entrepreneur, published author, and successful business owner. He has extensive and diverse experience with eCommerce consulting, operational excellence, public relations, sales, and marketing. You can reach Scott at The Five Day Startup.

shipments

Best Ways to Keep Track of Your Freight Shipments

When shipments are late, so much becomes inconvenienced. Production stops, work gets backed up, further shipments are delayed. Then, the phone calls arrive with customers wanting to know the status. If you have ever had to ask “Where is my freight?” then, it’s time to learn about the best ways to keep track of it.

Fortunately, there are plenty of options that are helpful for tracking freight from the moment it leaves the original location all the way to the final destination. Many of them are under your control. If you follow best practices and meet the needs of shipping company regulations, you shouldn’t have to worry too much about where your freight is, as it should arrive on time.

Tip #1: Accuracy Matters with Time and Cost

When you ship freight, the accuracy of the information improves your shipping speed. Your shipments need to have accurate measurements of length, width, height, and weight. If you have fractions, they should be rounded up.

When your measurements are inaccurate, the shipping company has to make adjustments which can be costly in both time and money. Shipping companies do not set their own freight weight regulations; the Department of Transportation does. Companies have to comply with the DOT rules. If you give the shipping company inaccurate dimensions, they have to make adjustments that could cause your shipment to be delayed.

Tip #2: Package Properly for Pallets

Another reason your items could be delayed is another one that is under your control. When you ship freight, you should expect that it will sit on a typical 40” x 48” pallet. Your best bet for timely shipping is to package your freight to fit on a standard pallet. If you cannot do that, then you should take time to talk to your freight company for the best advice. If the freight company has to take care of poorly packaged items, they are slowed.

Tip #3: Learn About AEI Tags

Shipping companies of all types rely on Automatic Equipment Identification (AEI) tags. These passive tags help shipping companies see where their rail cars and semi-trucks are when they are in transit. With various types of AEI readers, real-time information about the location of the freight cars and the items they are carrying can be shared with shipping companies and their customers. AEI tags can help you not only see where your freight is in real-time, but they can also provide you with alerts when the shipment is expected to be delayed.

Tip #4: Use a Transportation Management System

Freight or transportation management systems help you keep track of what you are shipping, where it is, and when it arrived. They are designed to create helpful reports in real-time, and they can help you manage all of your freight to optimize your business. Some systems can be connected with AEI readers to create timelines for arrivals and to show what is happening when shipments are delayed.

Tip #5: Put Your Smartphone to Use

Along with a transportation management system, mobile apps can help you track your freight. Businesses rely on apps that provide GPS tracking and confirmation. Delivery logs are helpful, too. Some freight companies offer their own branded, specific apps to follow shipments. Some apps even get down to fuel efficiency and how to save money that way. When you are able to see all the data regarding your freight and shipping, you will be able to save more money in the long run.

Tip #6: Know Where Your Freight is Going

Sometimes, when things go too well, it can be too good to be true. Imagine the freight that is packaged perfectly and arrives on time to the destination without any hitches along the way. But, once the freight arrives, no one is there to meet it and assist in unpacking. Then, there’s no loading dock. It is just as important to know where your freight is going, so there aren’t any unexpected delays at the arrival end.

Tip #7: Watch the Road Conditions

There are times and places where road conditions become impossible to maneuver. When the weather is bad or traffic is at a stand-still, freight companies cannot do anything about it. But, when they use apps or tracking software, you can find out where your freight is and realize the problem.

If you require shipments to arrive on time and weather could affect your production, then you should do what you can to plan your shipments in advance. For example, it can be tough to trust the road conditions in the northern United States in the middle of January. So, planning for delays should be part of your production design.

freight invoicing

How to Tackle the Freight Invoice Management Obstacles

A freight invoice is a detailed bill which includes information regarding the transportation of a company’s goods from one place to the other, along with the inclusion of the amount of charges, its weight, due dates, complete goods’ description, contact information, and names of both the receiver and the shipper, etc.

On the other hand, logistics is defined as the process of planning, implementing, and controlling the storage and movement of services and goods from the point of origin to the point of consumption within a supply chain, explains a top provider of Invoice Processing Services. The companies which deal with these processes become a part of the logistics industry and handle a few or all of the functions of supply chains as per the logistic requirements of the client.

Past Examples of Invoice Issues

-In recent times, an IT company was overbilled throughout 14 days by an amount of $935,578 owing to the incorrect weight applied by a parcel carrier.

-Auditing helped a national level entertainment retailer in saving around $35,000 from a wrong monthly invoice charge

-A worldwide renowned LED manufacturer had to pay $93,147 more due to incorrect billing currency, but the amount was recovered after the fault was discovered during the auditing process.

Top Freight Invoice Management Obstacles

Multiple Challenges

Managing invoices is extremely hard as a lot of challenges like reconciling contract terms with Bill Of Lading (BOL), invoices’ rating for correct rate selection, decisions about the acceptance of differences in charges, getting invoices resubmitted after making the carriers do corrections, etc. have to be dealt with extreme care. When these challenges are not addressed properly, they lead to errors, which further lead to overcharging, eventually adding to the overall Invoice Processing complexity.

Tedious Information Processing

The processing of information for the invoices is really tiring and tedious in nature. This is the reason employees who process the information for billing, weight, ledgers, data entry, and more commit multiple mistakes and make the final outcome inaccurate and hard to understand.

Bill Entry Issues

The very first concern which the logistics industry has to deal with during invoice management is the efficient functionality of the billing entry process which is defined below:

-Shortage of non-standardized processes and control due to operations which are not centralized for billing entry

-Multiple systems integration

-Due to missing BOL information, incomplete billable items are captured

-Multiple formats for BOL 

-Lost information regarding a customer or local-specific procedures for billing

Refund Management Issues

There are a lot of instances where the goods and services do not land safely at the doorstep of the receivers. In such cases, goods and services are returned back to the suppliers, which involves going through all the invoice processing steps again, which is extremely time-consuming for the owners of the logistics company.

Best Practices to Tackle Invoice Management Obstacles

Must-Include Invoice Listings

-Consignee and consignor names

-Shipment date

-Packages number

-Freight description

-Volume, weight, and measurement of freight

-Total outstanding charges

-Each carrier name engaging in transportation and movement route

-Shipment’s transfer point

-Issuer’s business address and remittance address

Freight Management Controls

It is important to incorporate internal controls which are powerful into the management structure of the freight. An authorization system, duty separations, and internal audits on a periodical basis are one of the most important tasks for managing risks like favoritism and fraud, which have the potential to bring down the overall profitability. 

The main objective is to make sure none of the employees have any chance for concealing and committing any illegal or unethical activity. For example, an employee who has been given the responsibility of getting the estimates should never be made the in charge of making the final freight invoice payment or selection.

Proficient Auditing System

According to a report by ReconLOgistics.com, wrong freight bills appear in about 5-6% of the entire invoices, which can raise the expenses of transportation to a great extent. With a proficient auditing system in place, along with a thorough recalculation and review can save you from overpaying due to inaccuracies in the freight bills. 

Apart from this, normal dealing procedures for lost shipment or damaged dealing, and timely claims reconciliation are an imperative part of a cost-saving management program for the freight.

Outsourcing Payment and Freight Audit

When it comes to finding the best solutions for streamlining the freight invoice management process, Outsource Invoice Processing remains a top favorite amongst the businesses due to its cost-cutting feature, along with the following benefits provided by it:

-Paper routing, filing, and handling elimination

-Centralized system for entire processing functions of the freight invoice

-Eliminating multiple systems and non-uniform processes

-Real-time insights into the invoices

-Latest technology use like artificial intelligence and automation

-Invoices’ long-term archival in the electronic form

-Carrier queries

-Increase cash flow to the maximum levels with timely invoice payments

-Receive correct and detailed accrual files and cost allocation straight into your system

-Gain visibility into operational metrics, invoice status, and payment information

Invoice Automation

Most of the industries have already incorporated the use of automation in a majority of their work processes, and have reaped great benefits in the following forms:

-Faster processing of invoices

-Elimination of costly human errors

-Invoice costs reduction by 80%

-Preventing payments duplicity and maximizing initial incentives for payments

-Enabling enhanced cash flow control and visibility

-Achieving 100% accuracy for invoice entry

Freight Software

Businesses who are trying to manage their freight invoices by themselves can ease their management workload with some of the top freight software mentioned below:

The Magaya Cargo System

This user-friendly software helps in eliminating duplicity of data entry, streamlining shipment workflows, generating Bill Of Lading, etc., along with a fully-integrated system for Invoice Accounting.

A1 Tracker

This software meets the unique business demands of the present scenario, make the working of the logistics systems smooth, and bring the required value to your business.

Freightos

The online platform for global trade management and freight booking, along with providing logistics owners with digital sales tools.

Excalibur WMS

This is a software which is fully integrated for warehouse management, accounting system, and third-party logistics (3PL) service billing.

CargoWise One

A central software system platform for worldwide providers giving logistics services.

Managing the freight invoices is definitely challenging owing to the various complexities in the form of inaccuracies and irregularities in the data and work processes, respectively. These complexities can be brought down greatly with the use of automation, outsourcing, audit systems, etc., eventually streamlining the process of freight invoice management at large, along with saving time and money at the same time.

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Gia Glad holds the position of Business Content Writer at Cogneesol – an outsourcing firm offering finance and accounting services along with other value-added services to the small and mid-sized businesses globally.

Schneider Transportation Increases Visibility with Trucker Tools

Trucker Tools’ carrier management and shipment tracking software services has been officially selected by Schneider Transportation Management to provide additional support one of the industry’s largest freight brokerage operations.

The company will implement Load Track and Smart Capacity – two of Trucker Tool’s cloud-based software applications to support and improve operational processes while providing increased visibility to its carriers.

“We are growing our capabilities with Trucker Tools to deliver a better experience for carriers and easier access to the high-quality loads they expect from Schneider,” said Erin Van Zeeland, Schneider’s senior vice president and general manager of Logistics Services. “With Load Track, our carriers have an easy-to-use platform for delivering quality information on the progress and status of loads in transit as well as visibility to available loads.

“This allows us to more efficiently connect the right loads with the right carriers while enhancing the visibility shippers want. Trucker Tools is also a big selling point, especially with the small and micro-carriers, because of the popularity of its mobile app,” Van Zeeland added.

Additionally, the company announced the implementation of a predictive freight-matching tool for brokers called the Smart Capacity platform.

“We are honored to be selected by one of America’s most respected transportation companies to help them drive further efficiencies and quality improvements into its brokerage operations,” said Prasad Gollapalli,” founder and CEO of Trucker Tools. “Our goal is to enable our broker customers to leverage next-generation technology to improve their competitiveness and increase their ‘stickiness’ with carriers. Through Smart Capacity, Load Track and our mobile driver app, we’re giving them unprecedented, trusted visibility into where and when those trucks are available – today, tomorrow and into next week.”

 

Source: Trucker Tools