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Worried about trade wars’ impact on your supply chain? Here are three ways to manage risks.

Archives, Global Trade Daily, International Trade

Worried about trade wars’ impact on your supply chain? Here are three ways to manage risks.

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Companies live in a world now where a tweet about tariffs and trade wars can rattle markets, prompt uncertainty, and question whether supply chains and global operations are positioned to handle the speed, unpredictability, and interconnectedness of the global economy.  The prevalence and threat of trade wars generate pervasive uncertainty across the globe- carrying wide-reaching implications for overall global growth. Increased cost of goods sold from upstream suppliers are squeezing margins and forcing global supply chains to adapt and react mid-stream. Despite a robust US economy, and general stability across global markets, the escalating trade war is increasing prices and making raw materials harder to obtain – threatening the positive trajectory of domestic and international economic activity.

How is this playing out in real time? Let’s look at an example: An automaker may have its engine manufactured in Germany, its transmission in Mexico and its GPS from South Korea with final assembly in the US. Tariffs could force automakers to move production, reducing economies of scale and increasing prices for the end consumer. Processing the resulting number of variables, scenarios, and decision matrices brought on by the trade war is a daunting challenge, to say the least.

Despite these marketplace, competitor and regulatory challenges, digital technologies, such as data analysis, machine learning and artificial intelligence (AI) provides companies with the resources and insights to manage risk and anticipate events. Today’s leading supply chains run on data, monitoring for risk and opportunity, and blend human and digital strategies to make decisions in real time. This is called the cognitive supply chain. It is interconnected, self-learning, predictive, adaptive and intelligent, and it can help leaders react faster to risks outside of their control. As such, here are three approaches that can help leaders manage, anticipate, and address supply chain disruptions.

Leveraging predictive analytics

Data has always been at the center of the supply chain and helps leaders make decisions. With internet of things and the growing number of connected devices, organizations can be more proactive in how they use data to enable insights.

The expanse of datasets, and increasing ease to obtain them, allows proactive organizations to leverage data to help drive their decision structure. The resulting variety of perspectives creates an opportunity to align against broader company goals. For example, how does the planned production schedule of a Swiss supplier affect my organization’s market position in Asia this holiday season? What are the potential risks, and how can they be mitigated? Data availability opens the door to these solutions. Enablers from digital technology provide:

-Digital linkage – integrated sales, production and delivery processes which have seamless flow of information.

-Control tower –visibility of all processes across the internal and external supply chain.

-Centralized collaborative e-hub – a connected ecosystem where all partners interact seamlessly with improved flow of information.

-Integrated lean logistics – applying lean principles to eliminate waste, errors and defects, minimizes lead-time and materials impacted by tariffs.

-Virtual logistics – enable on the fly deployment decisions with new logistics models.

Creating the digital twin

Today’s supply chains have growing complexities with an international network of suppliers and service markets. Efforts to integrate with external partners has led to complicated systems and processes, overwhelming supply chain leaders with data and metrics. Add in the variability of demand, and a supply chain is pushed back on its heels, reacting to demand variability. One uniquely positioned solution is called a “digital twin”.

A digital twin is a model of the supply chain. The foundation is a transparent supply chain strategy, comprised of rules on how to absorb and refine costs, or pass through to customers downstream. A digital twin uses the multi-tier supply chain data to rely upon predictive outcomes and sensory response. Uncertainties such as pending tariffs can be run through “what if” scenarios to understand the service, cost, and risk implications of changes, decisions and unexpected market conditions.

These examples are not intended to be definitive outcomes; alternatively, they allow internal and external supply chain groups the opportunity to setup a plan of action which mitigates service risk while optimizing the collective cost. Organizations must learn the discipline of using “what if” scenarios for their analysis and guide the implementation of both short term and long-term strategies and events.

For example, what is the correct level of holiday inventory investment that should be imported into the United States from China, given the potential tariff increase in the coming months? Which alternatives provide lower risk? Successful organizations will use their digital twin to move up the supplier tiers of a supply chain, and anticipate disruption, and arrange alternative routes and suppliers.

Consider managed services

Continuous investment in technology and talent with the skill and knowledge to use it can be expensive. The process engineering required to maximize ROI, along with the associating change management inevitably strains an organization’s resources. As a result, many organizations have found relief in managed services of their supply chains. It enables companies to focus on their core competencies of products and services, while contracting out the outcome: the best customer service at the optimal cost.

The consolidation of supply chain expertise into a vendor eases the necessary people, process, and technology investment. It allows organizations to shed the strain of daily variability, while maintaining the ability to make decisions and focus on the long term growth of the company. With the increasing pressure on tariffs, organizations will look to these partners to leverage their digital tools and technologies to limit the downstream effect across the supply chain.

Creating a cognitive supply chain is essential for answering the threat trade wars present. International supply chains will continue to become more expensive to maintain and manage. Businesses that are successful in meeting these complexities and adopting digital capabilities will be best equipped for the uncertainty that lies ahead.

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Mike Landry is the supply chain service line leader at Genpact, a global professional services focused on delivering digital transformation.

tech
Archives, Global Trade Daily, Special Reports

How to Succeed in the Competitive Tech Industry

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Succeeding in any competitive environment requires having basic traits or advantages that your competitors do not have. The same premise applies to the global tech industry. There are plenty of people with ferocious work ethic, tremendous technical expertise, strong connections and a vision of what they want to accomplish. With such competition, how can you succeed? The key is to look at where most people fail.

One – Keep the Vision Simple

Start with simple challenges that need to be addressed by your technology.

People will typically start off with goals that are too grandiose or theoretical. That’s what investors ask for. Rather than focusing on simple things that users need, the goal is to create a platform that will disrupt, revolutionize, re-imagine or shake-up an entire industry. That’s also what’s most attractive. But it’s also a road that will lead to a high failure rate. It does not matter if your vision is sexy and attractive or not. What matters is if people have the problem that you can fix and if they are willing to pay for that.

Two – Take One Step at a Time

Again. Take the megalomania and tuck it away. Keep overhead low. Hire as little as possible and allow your product vision to mature naturally. Once it generates initial traction, the product will catapult revenues and allow you to make smart decisions around budget allocation. But don’t give in to the temptation of looking for things that reaffirm your abilities such as nice office space, and expensive advisors and consultants. Focus on having a product that works and that people know about which brings me to point three.

Three – Make sure people know about it

There is no use for great technology if people don’t know about it. How you will get people to know about it is an entirely different subject. But make sure you emphasize and understand digital marketing just as much as you understand product development. Start with a small but energetic and enthusiastic community and build from there. Just remember that from a budget and prioritization standpoint this is as important as the product itself.

Four – Even though the aim may be global, start local

Similar to the one step at a time point. Even though you may have an ultimate global end-game to your product development. Make sure you start by addressing a single market first. The region focused the better. Then roll out to other regions slowly and adjust accordingly prior to a big global roll-out. In my experience, different parts of the world, the country, the state and even a city may react very differently to the same concepts. Don’t push too much for a global approach. If the product has the fundamental qualities available, it will naturally become global.

Five – Be Hands On

Don’t rely too much on an incipient organization. Even if you have great people, be sure to be involved in key processes, to challenge people and introduce checks and balances throughout the organization. Make sure things are moving at your speed and insert yourself wherever you believe your presence is necessary. Don’t get hung up on organizational charts, roles and responsibilities. Just make things happen!

Six – Establish a Culture Early On

As a natural consequence of your engagement, your unique company culture will start to mold. Do you like solving things collectively or individually? Do you like abrasive or tender discussions, long or short meetings, laughter or just down to business. What are your values? And not from a theoretical perspective but from actual behavioral analysis. This lucidity is paramount towards building a successful organization.

Seven – Don’t stop innovating

The minute you have reached goal number one, rest-assured it’s already obsolete. Continue to establish new goals, new visions and new dreams. Continue to adjust according to market and user response. Continue to pivot based on insights and revelations. Don’t give in to the temptation of making it. There is no such thing. Making it is a daily achievement.

The common thread is that people get excessively hung up on business models, concepts and theory and rely little on their empirical data to make key business decisions. A no nonsense, down to earth approach towards these challenges and taking it one step at a time is pivotal in terms of building a global and successful tech organization.

USMCA
Archives, Global Trade Daily, International Trade, Stories

THESE COMPANIES KEEP CROSS-BORDER CARGO MOVING, EVEN WITH USMCA UP IN THE AIR

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Our trilateral trade bloc is in a sort of limbo, stuck between the North American Free Trade Agreement (NAFTA) that went into effect on Jan. 1, 1994, and the floundering United States Mexico Canada Agreement (USMCA), which the countries’ leaders signed on Nov. 30, 2018, but has only been ratified in Mexico.

According to the U.S. Chamber of Commerce, which has pushed for more ease of free trade among the three nations for years, about $1.7 billion worth of goods and services flow between the U.S. and Mexico borders every day. That’s about 2 percent of the GDP in America, where, according to the United Nations’ International Trade Center, Mexico and Canada are the two largest trading partners for U.S. manufacturers and shippers after China.

Despite these uncertain times, there are North American cross-border traders that continue to thrive. Consider the collection that follows. 

AVERITT EXPRESS

One of the nation’s leading freight transportation and supply chain management providers, Averitt is celebrating 50 years of service. The company cites customized, cross-border transportation solutions among its many, many specialties. Five years ago, Averitt slashed less-than-truckload (LTL) service times from the U.S. Midwest to Ontario, Canada, in recognition of the province’s rise as a manufacturing hub. Averitt’s strategically placed border service centers in Laredo, El Paso, Harlingen and Del Rio provide easy access to all points throughout Mexico, by rail, truck or expedited air. 

BNSF RAILWAY

One of North America’s leading freight transportation companies, BNSF boasts a.32,500 route-mile network covering 28 U.S. states and three Canadian provinces. The railway utilizes multiple strategies to make international shipments easier for customers. These include market experience, customs clearance know-how and participation in special North American rail service alliances. The BNSF network also includes five U.S.-Mexico gateways (San Diego, El Paso, Eagle Pass, Laredo and Brownsville) and operations in Fort Worth, Texas, and Mexico City, Guadalajara and Monterrey, Mexico. Service options include carload, transload and intermodal (Mexi-Modal) that allow for shipments of all major commodities into and out of Mexico.  

CG RAILWAY

Picture in your head a railroad line extending from the American South to southern Mexico. You can imagine the track snaking along the contour of the Gulf of Mexico, extending west from Alabama through Mississippi and Louisiana before reaching Texas and turning due south through the border and beyond. What you did not picture was a shift from rail at Alabama’s Port of Mobile to an ocean ferry making a direct route over water to Puerto Coatzacoalcos in Veracruz, Mexico. That’s what CG Railway (CGR) has been doing since 2000: providing a faster, more cost-effective route between the eastern U.S. and Canada to central and southern Mexico. CGR offers C-TPAT (Customs Trade Partnership Against Terrorism) certification, bilingual customer support, proactive port security, reduced mileage and wear and tear on equipment and direct interchanges with the CSX, Norfolk Southern, Canadian National and Kansas City Southern railroads, the Alabama & Gulf Coast Railway and Terminal Railway Alabama State Docks and their Mexican counterparts. 

CN NORTH AMERICA

Canadian National is based in Montreal, Quebec, and the Class I freight railway’s network is the largest in that country by physical size and revenue. Established in 1919 and formerly government-owned, Canada’s only transcontinental railway spans from the Atlantic coast in Nova Scotia to the Pacific coast in British Columbia, across about 20,400 route miles of track. But you’d be mistaken to think CN, as it has more commonly known since 1960, is strictly a Great White North concern. The railway also serves the U.S. South and Midwest and, having gone private in 1995, it now counts as its single largest shareholder Bill Gates. Through the ’90s and 2000s, CN North America has acquired multiple lines passing through several U.S. states.

CROWLEY

The private, Jacksonville, Florida-based corporation is the largest operator of tugboats and barges in the world. Crowley American Transport provides ocean liner cargo services between the U.S., Canada, Mexico, South America and the Caribbean. Its American Marine Transport unit delivers local, over-the-road, and commercial trucking services in the continental U.S. Crowley Marine Services provides worldwide contract and specialized marine transportation services, including petroleum product transportation and sales, tanker escort and ship assist, contract barge transportation and ocean towing, logistics and support services, marine salvage and emergency response services, spill-response services on the West Coast and all-terrain transportation services.

CSX TRANSPORTATION

The subsidiary of CSX Corp., a Fortune 500 company headquartered in Jacksonville, Florida, CSX Transportation is a Class I freight railroad operating in the eastern United States and the Canadian provinces of Ontario and Quebec. The railroad operates around 21,000 route miles of track. While its lines blanket the east coasts of Canada and the U.S., you don’t have to be located on railroad track for CSX to help you, as it has access to 70 ports and nationwide transloading and warehousing services.

DB SCHENKER 

The global logistics and supply chain management giant has 93 branches in every U.S. state, Mexico and Canada. Schenker of Canada Ltd. provides logistics services, airfreight, custom brokerage, custom consulting, sports events, land transport and courier services. DB Schenker Mexico celebrated its 40th anniversary in 2017, having begun down there with a single location and 40 associates and now boasting of 500 employees in its corporate office in Mexico City as well as in Guadalajara, Monterrey, Queretaro, Puebla, Cancun, Ciudad Juarez and various other branches. DB Schenker Mexico offers air freight, ocean freight, land freight, customs brokerage, over-dimensioned projects, warehousing and contract logistics.

KANSAS CITY SOUTHERN

The KCS North American rail holdings and strategic alliances are primary components of a NAFTA railway system linking the commercial and industrial centers of the U.S., Mexico and Canada. “KCS is just one interchange away from every major market in North America,” boasts the railroad. KC Southern de Mexico offers unique rail access to the Port of Lazaro Cardenas on Mexico’s Pacific coast, which is an ideal spot to avoid congestion in U.S. West Coast ports. KCS also has access to Gulf of Mexico ports, including Altamira, Tampico and Veracruz in Mexico and Brownsville, New Orleans, Corpus Christi, Houston, Gulfport, Lake Charles, Mobile and Port Arthur in the U.S. 

LIVINGSTON INTERNATIONAL

Billed as North America’s No. 1 company focused on customs brokerage and compliance, Livingston International also offers international trade consulting and freight forwarding across the continent and around the globe. Headquartered in Chicago, Livingston operates along the U.S.-Canada border, with regional air/sea hubs in Los Angeles, New York and Norfolk. Livingston employs more than 3,200 employees at more than 125 key border points, seaports, airports and other strategic locations in North America, Europe and the Far East. Livingston is a customs brokerage leader in Canada, and the company also promises to move goods seamlessly into Mexico.

LOGISTICS PLUS

Whether it is working as a 3PL or 4PL partner, the Erie, Pennsylvania-based company specializes in total logistics management, LTL and truckload transportation, rail and intermodal services, project cargo and project management, import/export services, air and ocean freight forwarding, warehousing and distribution, global trade compliance services and logistics and technology solutions. Logistics Plus serves small and large businesses throughout the Greater Toronto Area, with an office in the zone that has access to the Port of Toronto and expertise in shipping in and out of Canada though the St. Lawrence River and Lake Ontario. Bilingual logistics experts help customers with intra-Mexico, cross-border, or international shipping using air, ocean, ground or rail transportation. 

LYNDEN

Seattle-based Lynden not only delivers to, from and within Canada, the company does business there. Its long-established Canadian presence allows it to provide complete coverage for any transportation need. They can help with warehousing and distribution or 3PL in Canada, where Lynden boasts of knowing “the ins and outs of customs brokerage, duties and taxes, imports and exports.” From its offices in Edmonton and Calgary, Alberta, and Whitehorse, Yukon Territory, Lynden offers scheduled less-than-truckload (LTL) and truckload (TL) service to points in Alaska and the Lower 48.

LYNNCO

The Tulsa, Oklahoma-based company optimizes customers’ supply chains coast-to-coast in the U.S., Canada, and Mexico. LynnCo manages businesses and determines how and when ground, international air/ocean, spot/capacity, procurement and expedited services are the best options. For instance, LynnCo helped a U.S. manufacturer determine if shifting units to Mexico was profitable. The answer was no after factoring in the risks of moving, poor facilities, added shipping costs and product quality. 

POLARIS TRANSPORTATION GROUP

Billing itself as “an American company headquartered in Toronto,” Polaris has a quarter century of experience in scheduled LTL service between the U.S. and Canada. The company knows both countries’ customs rules and participates in every border security program, including C-TPAT, PIP (Partners in Protection), CSA (Customs Self- Assessment) and FAST (Free and Secure Trade). The company’s scheduled service connects Ontario and Quebec markets with the U.S. through a combination of its fleet and facilities along with those of its long-established partner carriers.

PUROLATOR INTERNATIONAL

The U.S. subsidiary of Canada’s leading provider of integrated freight and parcel delivery services, Jericho, New York-based Purolator International seamlessly transports shipments between the U.S. and Canada and manages the respective countries’ customs processes with aplomb. They pick up/drop off at every point in the U.S. and boast of a distribution network that extends to every Canadian province and territory. What truly takes Purolator International over the top is a commitment to continue improving, as evidenced by a recent $1 billion growth investment that includes two new hubs that will allow for faster fulfillment for both courier and e-commerce shipments from the U.S. throughout Canada, where consumers also will be seeing more access points, including upgraded retail pickup locations.

R+L GLOBAL

“Shipping to Mexico is facil,” according to Ocala, Florida-based R+L Global Logistics. Its qualified network of premium carriers in Mexico provide secure door-to-door Less than Truckload (LTL) and Full Truckload (FTL) services. They cover the entire Mexican territory and move cargo across all major U.S./Mexico border gateways. They also move intra-Mexico shipments. 

SCHNEIDER

The Green Bay, Wisconsin-based giant specializes in regional trucking, long-haul, bulk, intermodal, supply chain management, brokerage, warehousing, port logistics and transloading. Decades of cross-border freight experience means customer cargo moves without question or delay. Once goods move across the border, Schneider has the assets and personnel in place to deliver it safely and securely. “Here’s the simple fact: No one makes shipping to Canada and Mexico easier or more efficient than Schneider,” the company boasts. “By road or by rail, your freight is in the best hands possible.”

SENKO 

The Japanese logistics giant has offices in the U.S., where their own trucks and warehouses work with a network of vendors. The 3PL/4PL supply chain solutions provider uses its own IT technology developed in Japan to help arrange liquid tank transportation, flatbed, drayage, refrigerated, dry, expedited shipping and freight broker services. Senko Logistics Mexico is the company unit south of the border.

SUNSET TRANSPORTATION

The St. Louis-based company has offices and agents across the country, and customers whose shipments are moved around the globe. Sunset arranges freight for a wide range of industries, from wholesale food distribution to specialized construction equipment. “Cross-border solutions” include customs clearance for land, rail, air and ocean, LTL, TL, intermodal, rail, air, expedited and specialized freight, contracted lane and spot market, C-TPAT compliance, multimodal programs, a Laredo, Texas, warehouse and distribution facility and 24/7 bilingual, bicultural support.

SURGERE 

Headquartered in North Canton, Ohio, Surgere is a leader in linking OEMs, tier suppliers and logistics providers through an automotive data system that provides visibility on returnable containers at every stage of their movement between supplier and vehicle maker. The supply chain innovators, whose clients include Nissan and CEVA Logistics, recently opened Technologias Avanzadas Surgere de Mexico in Aguascalientes, Mexico, which has more than 1,300 suppliers and automotive plants within 200 kilometers of the location. “Central Mexico is the automotive hub for Latin America—making it a natural progression—and a welcomed challenge for us,” explained David Hampton, Surgere’s vice president for International Operations, in announcing the move. Surgere hopes to have the Mexico office fully staffed before the end of this year.

TQL

Cincinnati, Ohio-based Total Quality Logistics (TQL) was founded in 1997 and is now the second-largest freight brokerage firm in the nation, with more than 5,500 employees in 57 offices across the county. Known for combining industry-leading technology and unmatched customer service, TQL boasts of providing competitive pricing, continuous communication and “a commitment to do it right every time.” They move more than 1.6 million loads across the U.S., Canada and Mexico annually through a broad portfolio of logistics services and a network of more than 75,000 carriers.

USA TRUCK

The Van Buren, Arkansas-based company provides customized truckload, dedicated contract carriage, intermodal and third-party logistics freight management services throughout North America. USA Truck has nearly two decades of experience servicing Mexico, which has allowed the company to expand its presence south of the border and partner with many Mexican carriers. USA Truck’s Capacity Solutions coordinates transportation into and out of Mexico with a vast carrier network, and they service most major Mexican markets and consistently maintain C-TPAT certification. USA Truck also has a select fleet of third-party carriers providing service into the provinces of Ontario and Quebec, Canada.

UTXL

Launched in 1997 by four founders with more than 100 years of combined asset-based trucking experience, UTXL started with this goal: to be the safest, most reliable and cost effective niche capacity resource to customers in support of their core carrier programs. UTXL has served thousands of shippers across the U.S., Canada and Mexico, including some of the largest shippers in the world. One of their mottos is: “Any point in the U.S., Canada or Mexico … any length of haul.”

WERNER ENTERPRISES

“We keep America moving” is the motto of this Omaha, Nebraska-based company that has one of the largest transportation services to and from Mexico and is a premiere long-haul carrier to and from Canada and throughout North America. Werner has offices in Mexico and Canada as well as experienced and knowledgeable staff engineer solutions. PAR documentation allows for quicker access through customs into Canada, and their network of alliance carriers can manage entire supply chains within Canada and Mexico regardless of equipment needs.

WW SOLUTIONS

The unit of Wallenius Wilhelmsen Logistics participates in Mexico’s automotive industry not only as a carrier and logistics provider. WW Solutions specializes in processing solutions at ports and at OEM plants, providing services that include pre-delivery inspections, accessory fittings, repairs, storage, washing, vehicle preparation, quality control, inventory management and the procurement of technical services.

YRC FREIGHT

Yellow Transportation (founded in 1924 in Oklahoma City, Oklahoma) merged with Roadway (founded in 1930 in Akron, Ohio) to create YRC Freight, which is the largest subsidiary of YRC Worldwide Inc. based in Overland Park, Kansas. A leading transporter of industrial, commercial and retail goods, YRC Freight offers solutions for businesses across North America and is the only carrier with on-site, bilingual representatives at border crossing points in Mexico to expedite customs clearance.

freight invoicing
Archives, Global Trade Daily, Special Reports

How to Tackle the Freight Invoice Management Obstacles

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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.

Globe Tracker
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Globe Tracker & SeaCube for One Network Express IoT Gensets

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One Network Express (ONE) confirmed an IoT-focused partnership with SeaCube Containers and Globe Tracker to develop a genset solution through utilizing Global Tracker’s layered technology capabilities. This along with other market solutions continue the reported increase in maritime logistics IoT demand overall.

“The growing demand for greater tracking, transparency, security, diagnostics and asset fleet management using smart technology will continue to be a key driver for leased solutions. By partnering with Globe Tracker, we will continue to enhance our leading-edge technology solutions and expand our commitment to the intermodal industry by providing smart asset technology leased products,” said Greg Tuthill, Chief Commercial Officer at SeaCube.
At the center of the development of the solution remains increasing visibility with smarter tracking abilities, specifically impacting reefer fleets. The anticipated kickoff of full operations is currently scheduled for mid-September through the end of 2019.
“We are extremely pleased to be working with SeaCube in providing this best-in-class genset solution to ONE. In genset telematics, we are the only provider integrated into the micro-controller of 2 out of the 3 leading brands in North America. This provides ONE with the most robust amount of data and assists in setting maintenance intervals, reducing maintenance costs, extending asset life, monitoring fuel consumption and having full operational visibility of their genset assets,” notes John Harnett, Senior Director Marine and Intermodal at Globe Tracker.
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THIS TINY CHIP IS PLAYING A BIG ROLE IN THE TRADE WAR

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Small and mighty

In one of the most successful branding campaigns, “Intel Inside” helped us all become aware that semiconductors are the brains behind modern consumer electronics in our computers, in our mobile phones, in our televisions and in our cars. It’s wondrous such power begins life as grains of sand (and other pure elements). The silicon in sand is purified and melted into solid cylinders that get sliced into one-millimeter thick wafer discs. The discs are polished, printed with circuit designs, and cut into the tiny individual semiconductor chips that get embedded into our devices.

The next generation of smarter and more powerful machines will rely on even more sophisticated semiconductors to achieve new capabilities. The pace of change is dizzying. Pressure is on to “win” in the global chip race, which is why efforts to protect innovations in chipmaking are front and center in the current trade war – for better and for worse.

Strength in numbers

The American semiconductor industry dominates the field with close to half of the global market share. Some industry leaders thrive by maintaining a high degree of vertical integration, but most have achieved a competitive edge by developing reliable value chains that leverage industry clusters located in different regions, while also tapping into the expertise of thousands of small, niche firms inside and outside the United States.

Some firms focus on supplying raw materials or manufacturing equipment, others create “intellectual property cores” or the building blocks for chips, or cultivate skilled engineers who lay out the circuitry of chips. Closer to the end users are companies that have achieved efficiencies in manufacturing, assembling, testing, packaging and distributing semiconductors.

According to the Semiconductor Industry Association (SIA), Canada, European countries and the United States are leaders in semiconductor design and high-end manufacturing. Japan, the United States and some European countries are main sources for equipment and raw materials. China, Taiwan, Malaysia and others in the Asia-Pacific tend to concentrate in the manufacturing, assembling, testing and packaging segment of the industry. R&D hubs are spread across the world.

One American company might have over 7,000 suppliers across almost every state and also have another 8,500 suppliers outside the United States. In creating strategic value chains, American companies can invest in R&D to advance the science while keeping production costs down.

Top traders in semiconductors

China’s growing chip army

The Trump administration approaches trade with China through the lens of national security as well as economic preeminence. As the Economist rightly points out, in this clash of economic titans, “the chip industry is where America’s industrial leadership and China’s superpower ambitions clash most directly.”

China currently spends as much on imported semiconductors every year as it does imports of crude oil. Importing semiconductors was crucial to China’s ascendance as an assembler of telecommunications equipment, computers, displays, monitors and a variety of electronic components that China exports around the world.

But it’s high-end semiconductor development and manufacturing that China has its eye on now as the foundation for sustained economic growth and military might. Under its “Made in China 2025” strategy, the Chinese government set a goal to supply 40 percent of its own semiconductor needs by 2020, increasing to 70 percent by 2025.

China purchases of semiconductors

Enlisting the big guns

U.S. firms spend twice as much on R&D as their Chinese counterparts – 17.4 percent of sales versus 8.4 percent. How to counter? Pull out some big funding guns. China’s Ministry of Science & Technology orchestrated the $800 million Hou An Innovation Fund to acquire technologies to help its industry semiconductor industry leapfrog. The fund purchased a controlling stake in the world’s leading developer of semiconductor IP blocks. The Ministry of Industry and Information Technology also built a $31.7 billion war chest, even opening its China Integrated Circuit Industry Investment Fund to foreign investors.

According to Price Waterhouse Coopers, China has gone from 16 integrated circuit design firms in 1990 to 664 in 2014. Chinese wafer production firms tripled over a similar span, and the number of testing and packaging firms has increased by 50 percent. E-commerce giant, Alibaba, acquired in-house capacity to design semiconductors tailored for artificial intelligence in a bid to compete with Microsoft and Google. Baidu, Huawei and other major Chinese firms are also enlisted soldiers in the fight.

Secret Weapons

Powerful chips are critical for any industry that relies on collecting, managing and computing with data – and that includes the defense industry. Our most sophisticated defense weapons depend on them. The U.S. Department of Defense has a strategy for “Microelectronics Innovation for National Security and Economic Competitiveness.” The U.S. government has imposed billions in tariffs on imports from China to generate leverage in negotiating an agreement to crackdown on forced technology transfers and theft of intellectual property. But it is also deploying other tools to control U.S. exports of critical technologies, another avenue for China to access U.S. innovation.

The U.S. government has proposed expanding its list of “emerging and foundational technologies” (microprocessors for example) deemed essential to national security that would be subject to licensing under the Export Administration Regulations before U.S. companies could export them. Also under review is the Commerce Control List (CCL) to assess any changes that should be made to controls on items to embargoed destinations, which may include China.

The Commerce and Justice Departments have visibly stepped up enforcement and applied existing authorities in novel ways against Chinese companies that might steal technology. In November last year, the Department of Justice announced it would proactively investigate and prosecute Chinese companies for alleged trade secret theft and economic espionage. The announcement was swiftly followed by an indictment of Fujian Jinhua Integrated Circuit Company, Ltd., a state-owned Chinese semiconductor manufacturer, for alleged crimes related to a conspiracy to possess and convey the stolen trade secrets of Micron Technology, Inc., an American semiconductor company. The Commerce Department added Fujian Jinhua to the list of entities to which U.S. companies cannot sell without obtaining a license.

The United States is not alone in applying policies designed to prevent technology transfer to Chinese companies either through export or acquisition. Taiwan and South Korea have done the same. Foreign firms are also wary of violating U.S. laws. According to Reuters, Japan’s Tokyo Electron, the world’s third-largest supplier of semiconductor manufacturing equipment, announced in June it would not supply to Chinese firms on a U.S. list.

Global Semi Market Share

On the front lines

The Administration’s tariff war is leaving almost no industry or product untouched, affecting semiconductors, semiconductor manufacturing equipment, raw materials, printed circuit boards, and a variety of other products in the industry’s supply chain. American semiconductors often criss-cross the globe during production, so U.S. firms might end up paying this import tax on its own product — not to mention the higher costs of tariffs on the consumer products that run on semiconductors.

While supportive of the administration’s goals, the U.S. semiconductor industry has urged a balanced approach that will protect its intellectual assets from theft and preserve U.S. national security while not unduly hamstringing innovation and growth that is in part derived from international collaboration.

Current technologies and methods of fabrication proprietary to incumbent firms keep them in the lead, for now. But in the near future, chips will run on light rather than electricity. Artificial intelligence and quantum computing will be applied to gain computing speed. Breakthroughs like these will determine who are the future industry leaders, and China has an opportunity to gain entry on the ground floor of those frontiers.

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Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fourteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

 

This article originally appeared on TradeVistas.org. Republished with permission.

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Google and Facebook Victim of $100 Million in Accounts Payable Fraud: How It Could Have Been Prevented

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By now you may have heard about Evaldas Rimasauskas, the Lithuanian man who pled guilty in March of this year to scamming Facebook and Google out of more than $100 million. Impersonating a company with whom both tech giants do business, Rimasauskas sent fake phishing emails containing forged invoices and convinced the companies to wire funds to bank accounts he controlled.

Business email compromise scheme

The U.S. Department of Justice portrayed the crime as a fraudulent business email compromise (BEC) attack, but it’s worth noting that the victims aren’t small mom-and-pop businesses—they’re sophisticated, well-established companies with mature business processes and state-of-the-art procurement and ERP systems. So why did they fall for this scheme?

Let’s take a look at how the criminals took advantage of common “best-in-class” accounts payable (AP) processes and practices. And more importantly, let’s look at how you can avoid falling victim to a similar hoax.

A sophisticated phishing scam

From 2013 to 2015, Rimasauskas orchestrated a combined phishing and invoice scheme targeting Google and Facebook, who confirmed to NPR that they were the companies referred to by the DOJ as “a multinational technology company” and “a multinational online social media company.”

According to the 2016 indictment filed in the U.S. attorney’s office, Rimasauskas registered and incorporated a company with the same name as Taiwan-based electronics manufacturer Quanta Computer, which supplies computer hardware to major tech companies. He then proceeded to open bank accounts in the company’s name in Cyprus and Latvia.

Next, he sent fake emails and invoices to Facebook and Google and directed unsuspecting employees to wire payments to the fraudulent bank accounts that he controlled. And from those bank accounts in Latvia and Cyprus, Rimasauskas laundered the funds by quickly wiring the money into accounts not only in Latvia and Cyprus, but in Slovakia, Lithuania, Hungary and Hong Kong.

How were the employees fooled by the fake invoices?

Using a fairly common phishing practice, Rimasauskas and his co-conspirators sent spoofed emails—emails designed to look like they came from Quanta accounts—to the companies’ AP departments. Many companies only require vendors to email their invoices to an accounts payable  email address; there aren’t any checks in place to ensure that those invoices are coming from a legitimate vendor.

But shouldn’t a human have approved the payment?

As a part of their internal financial controls, most companies require business users to approve invoices. In this case, the approvers were most likely familiar with Quanta and the types of purchases they usually made from them, so they probably had no reason to question the invoices.

Weren’t there purchase orders that the invoices should have matched before they were approved and released for payment?

Yes. It’s not clear from the indictment or news reports how the criminals knew valid P.O. numbers, SKU numbers, pricing, terms, invoice formats or other information for not one but two major companies. One assumption we could make is that they had insider information of some sort from Quanta and therefore could produce invoices with the right PO and line-item information on them.

Why didn’t Facebook and Google realize that the bank accounts to which they were asked to wire money weren’t the same as the Asia-based Quanta accounts on record?

The scammers used correspondent banks in New York and other cities, no doubt realizing that a request to wire funds to Latvia might have aroused suspicion.

How were the companies fooled into transferring such large sums of money?

As some observers have pointed out, the idea that Rimasauskas “just asked the companies for money” sells short the scheme’s high level of sophistication. In addition to being a talented forger, he clearly had in-depth knowledge of big companies’ internal finance operations. Companies like Facebook and Google use advanced invoice and contract management software and follow industry-standard practices such as the three-way match, which verifies price and unit numbers across purchases, invoices, and receipts.

The fact that Rimasauskas was able to skirt these controls indicates that standards like the three-way match may no longer be enough to reconcile documents and prevent overpayments—or outright fraud.  

How your organization can prevent invoice fraud

If the sophistication of Rimasauskas’ scheme was able to defeat the best-in-class procurement system and AP process of a Facebook or Google, what hope do companies have for detecting and stopping overpayments? Here are a few strategies that can work.

Use true electronic invoicing with B2B integration

The problem with emailed invoices is that they must either be keyed in manually by AP staff or entered into invoice automation software, leaving you exposed to errors or scams. When it comes to preventing phishing scams, electronic invoicing through electronic exchange like XML is a much better option than invoices that are emailed as attachments or even sent by snail mail. You may not be able to control what vendors send to you; however, by putting the right controls and technology in place, you can quickly detect fraudulent invoices before they’re paid.

Add controls to verify bank account activity

‍A vendor request to add or change a bank account should always require a confirmation phone call or other human verification. Solutions like AppZen use AI and data augmentation techniques to detect suspicious activity even when such requests are made electronically.

Require more than a P.O. number; verify work activity or product fulfillment

‍Purchase orders serve an important function—they verify that approved funding is in place—but they don’t confirm whether goods or services are actually received. For inventory items, a good receipt in the warehouse works as part of the P.O. matching process, but for non-inventory items such as services, procurement systems rely on human requestors to perform a goods receipt or provide approval to fulfill the control of a three-way match.

The problem is that in large organizations (or even smaller ones), it’s impossible for business approvers to accurately determine if every product or service was received as ordered or contracted. As a result, they often rely on their familiarity with the product or service or their knowledge that it’s in the budget, and they end up approving invoices as a matter of routine. Unfortunately, this leaves the process open to error or fraud.

Instead of depending entirely on humans, consider a solution with AI auditing technology that can confirm that receipt of products or services. For example, AppZen can look at unstructured data like ticketing systems, badge data, network logins, and tracking numbers. AI can easily verify whether a product was indeed part of a new shipment and not referenced in previous invoices or already received. Our AI can spot discrepancies and duplicate transactions and to recognize invoice patterns that humans can’t easily see, alerting business approvers if it detects a risk so they can make informed decisions.

Scammer now behind bars—but more are out there

Rimasauskas was eventually caught and extradited to the United States in 2017, where he was charged with wire fraud, money laundering, and identity theft, although he’s only pleaded guilty to wire fraud. He now faces up to 30 years in prison.

“Rimasauskas thought he could hide behind a computer screen halfway across the world while he conducted his fraudulent scheme,” said U.S. Attorney Geoffrey Berman in a statement, “but as he has learned, the arms of American justice are long, and he now faces significant time in a U.S. prison.”

But even though the indictment mentions co-conspirators, Rimasauskas is the only person who has been charged with in connection the crime, meaning he’s potentially part of a larger organization lurking in cyberspace. The risk from similar swindles is growing exponentially: The FBI’s Internet Crime Complaint Center warns that BEC scams are up by 1,300% since 2015 and estimates that companies have been defrauded of more than $3 billion.

Reviewing every invoice you receive is critical if you want to protect your company from falling victim to scams like the one that targeted Facebook and Google. With AppZen’s AI platform, you can audit 100% of your invoices before you pay them, flagging only high-risk spend like errors or fraud for manual review.

Anant Kale is the Co-Founder and CEO of AppZen where he’s passionate about helping companies audit every dollar of spend with artificial intelligence.  As CEO he is responsible for the product vision and execution of the company’s broad mission. Previously he was the VP of Applications at Fujitsu America from 2009-2012, responsible for product management, and delivery of Fujitsu’s applications and infrastructure for enterprise. He has 15+ years of experience in software development. He has an MBA and a BS in Finance and Engineering from Mumbai University.

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Transplace Earns Challenger Position by Gartner Inc.

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Gartner Inc. confirmed the inclusion of leading logistics solutions provider, Transplace as a Challenger for the 2019 “Magic Quadrant for Transportation Management Systems.” The company’s robust portfolio offers top grade technology solutions for companies both large and small, creating streamlined operations with a strategic approach.

“Companies are constantly seeking new ways to improve supply chain performance and reduce costs while maintaining high levels of service to increasingly demanding customers, and today’s technology solutions that give them greater visibility, predictability and control over their logistics operations than ever before,” said Jim French, CTO, Transplace.

“We believe our positioning in the Challengers quadrant by Gartner continues to validate Transplace’s commitment to provide innovative transportation management solutions that enable shippers to better manage their transportation networks, improve financial performance and deliver outstanding service to their customers.”

Transplace’s transportation management services are credited for supporting businesses in manufacturing, retail, automotive, chemical, distribution and more, ultimately increasing visibility while improving efficiencies.

“As the supply chain continues to become faster and more complex, shippers need technology and logistics platforms that enable them to more effectively plan and execute a strategic, data-driven logistics strategy,”
Transplace CEO Frank McGuigan said. “Transplace continues to invest in its logistics solutions and services, including integrating machine learning, artificial intelligence (AI) and predictive analytics, to achieve greater supply chain automation, optimization, predictability and visibility.”


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ProMat Day Three Combines Education, Awards, and Comedy

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Thought leaders, exhibitors, and attendees kept the momentum going on day three of this year’s massive ProMat Trade Show in Chicago, despite chilly temperatures. Wednesday’s education seminars continued addressing some of the biggest industry challenges while identifying key differentiators that foster optimal results and competitive advantage.

One of the most talked about themes at this year’s conference is the major issue of labor shortages. Employee recruitment and retention are among the biggest concerns for industry players. As automation continues reducing unnecessary manpower, human involvement has become a complex role to balance. Topic leaders across multiple sectors have already made it very clear that humans in the workplace continue to be a critical component. Even so, some companies continue expressing uncertainty in how to approach tapping into the labor market.

OPEX Corporation’s John Sauer addressed these concerns head-on in a presentation on Wednesday. Sauer is the Senior Business Development Manager for OPEX and boasts 8 years of front line material handling management experience. In his presentation, Sauer confirmed some of the biggest issues among employees in warehouses are factors some might consider to be small – such as climate control, physical demands, consistent hours, and work independence. At the end of the day, employees nowadays are looking for more than just a salary – they want to feel some importance and pride in what they do.

In today’s technology-centric environment, these factors can be addressed through strategic implementation of the technology at-hand. By utilizing technology for optimizations in operations and creating an environment that supports a positive work environment for employees, retention and recruitment challenges can be alleviated.

MHI Industry Night

Wednesday concluded with a special networking event featuring comedian and actor Craig Ferguson following the announcement and recognition of leading companies for “Best Innovations” and Young Professional Awards. There were 108 submissions for the awards and only four finalists were selected for each category. Among the winners included:

Best New Innovations:

Fetch Robotics for CartConnect

Locus Robotics for Gamification

Attachments for Forklift Safety Device (FLSD)

CMC srl for Pick2Pack

Best Innovation of an Existing Product:

ProGlove for Mark 2 Smartglove

RightHand Robotics Inc. for RightPick: The Piece Picking Solution

Artitalia Group Inc. for Versatile Nesting Cart

Swisslog Logistics Automation for ItemPiQ

Best IT Innovation:

Yard Management Solutions for Eagle Eye Yard Management Software

LogistiVIEW for Vision Pick and Put Wall

Schaefer Systems for WAMAS Lighthouse

KNAPP Inc. for redPILOT

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ProMat Day Two: Disruptive Technology and Game-Changing Strategies

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Day two of this year’s ProMat Trade Show kicked-off with exhibitors showcasing the industry’s top innovative solutions and another full day of keynote speakers and education seminars – many of which were at full capacity.

Among today’s featured speakers included Raymond Corporation‘s Stacey Patch, Dale Dunn, and Derrick Miller speaking on the importance of optimization efforts before implementing automation into operations. In order for a company to fully grasp the benefits of automation, a deep understanding of potential efficiency must come first. The process of automation should start with a focal point on optimization before investment. Additionally, the company made it clear that before fully replacing, tech and automation will maximize human activity and support operations.

Swisslog Logistics Automation’s made an appearance on stage as well, informing attendees of ways to creating a competitive weapon out of supply chain. John Dillon Vice President, E-Commerce/Retail and David Schwebel Vice President, Business Development and Market Intelligence identified the industry’s biggest challenge of risk and how to navigate through it with strategic, forward-thinking approaches, as seen with their container-based warehousing system providing increased efficiencies and flexibility.

Day three will continue exploring the world of leading logistics initiatives, product innovations, and industry education on topics including removing barriers for improvement, addressing the labor shortage, and smarter packaging technology options.