The Trade Bridge Blog

Where Will I Get The Olives?

Edward Donnelly has some valuable comments about the vulnerabilities of having a single supplier for a key product. What if that supplier goes belly up like the olive supplier in Donnelly's story?

Customs Brokers as Consultants

Here's a Q & A on LinkedIn that piqued my interest. Will customs brokers start charging by the hour anytime soon?

2.0 Kudos to Global California

Wikis, podcasts, desktop sharing....what's a person to do? Global California had many of the answers at their annual conference in Sacramento recently. This conference was an abundance of useful and practical information for importers and exporters, not just in California, but all over the US. I went as an exhibitor for Trade Bridge and spent most my time listening to an A-list line up of experts and service providers assembled by Tony Livoti and his team at the Monterey Bay International Trade Association. Highlights of the topics covered include using Web 2.0 tools to collaborate on product development with overseas partners, practical suggestions for marketing on the web, translation/interpretation/localization, sourcing and researching online, new developments in online security that can be applied to international collaboration, and an eCommerce source for pre-shipment funding. Just listening to these folks talk about the internet resources available to importers and exporters had me want to start exporting something!

C-TPAT Kicking and Screaming?

I've met a new SME ally through this blog, Philip Spayd of Global Trade Systems and formerly of Customs. Phil makes a very good point about SMEs and their importance in the supply chain and its security:

"Our clients at GTS—all predominately SMEs...have for the most part approached C-TPAT as an obligation to be fulfilled.  Often they are pressured to join by customers or other business partners who are C-TPAT certified. They did not initially approach C-TPAT from a strategic interest in improving supply chain management or in recognizing risk within the supply chain. They wanted to take the basic actions to achieve certification.  We help our clients fulfill these needs, but also help them to see the benefits they can achieve in recognizing other risks in their supply chain, and laying the foundation for being able to respond to disruptions.

A point that I believe is important for SMEs to understand is that C-TPAT and SAFE, together with the initiates such as pending product safety and legislation, the TSA air cargo screening initiative (Certified Cargo Screening Program), and efforts to demonstrate environmental responsibility within the supply chain, will create entire classes of firms that are known entities that meet basic international security (and safety and environmental) standards, and that many business relationships will be built on this status.  The risks of doing business with companies outside the network of authorized economic operators (or known parties, or whatever we decide to call them) will be too high.

So, my advice to SMEs would be to find a practical way to approach C-TPAT, and to use it not only to achieve C-TAPT certification, but as a platform to recognize other risks within their supply chains, and to move into the realm of being a known, responsible, stable and secure member of the supply chains of which they are a part."  Well said, Phil.

What is 10+2 Going to Cost Us?

Kudos to Jennifer Baxter, Gail Coad and Christopher Chan at Industrial Economics for digging deep to research what 10+2 is going to cost SMEs. They were retained last year by CBP to do an economic impact analysis of 10+2. On Mike Laden's recommendation, we had a lively, in-depth discussion today as they further researched how 10+2 might impact SMEs. It breaks down into these categories of cost: IT, research, changes in terms of sale, transmitting the security filing. And these costs depend upon the complexity of the supply chain, the level of automation, business style, degree of business process change and the costs charged by the broker or ABI service provider. I'll be putting all this information together into a presentation for the American Association of Importers and Exporters on June 3. Look for my upcoming SME importer survey results and the subsequent detailed analysis on the Trade Bridge web site as well.

Prepare for 10+2 NOW

To help importers prepare for 10+2 I found a great document online. Prepare for 10+2 by understanding how importers need to design and build their databases to accomodate CBP's Security Filing. Global Data Mining presented the step-by-step process at the recent National Customs Brokers and Forwarders Association of America (NCBFAA) convention. The best thing about this document is that it gives you enough direction to work with your IT Department or consultant to estimate this part of the cost of complying with the new rule.

We Are Making a Difference

I'm jazzed to report that Trade Bridge is making an impact. We are providing the WCO with some very welcome and much needed feedback from our members, U.S. SMEs. I was in Brussels in December speaking to a SAFE conference about SME views on C-TPAT. TBI Chairman Bruce Wilson goes to Brussels next week to attend the 2nd SAFE Working Group meeting. As an Observer, TBI can provide input and the SME perspective at an international level.

The Canadian SME community, through their trade associations, are also interested in providing the Canadian perspective for Trade Bridge to represent to the WCO. This would be a valuable addition to the Trade Bridge cause which I will be pursuing in the coming months.

Keep your fingers crossed as CBP reviews my application to COAC. If I am appointed, Trade Bridge and its 7000 SME importer-exporter members, will have a direct line of communication to Congress. Is there any question that this is a movement whose time has come?

To C-TPAT or Not to C-TPAT, that is the Question

To view the results of the survey conducted by TBI, Download C-TPAT_Survey_12-07.pdf. Most recently these results have been presented to the CBP annual C-TPAT conference. While the results are more anecdotal than scientific, the sense is that C-TPAT is not a program whose time has come with SMEs. Alternately, most importer SMEs polled reported making improvements in their supply chain security since 9/11 regardless of participation in C-TPAT. These results were also presented to the World Customs Organization in Brussels at the December 2007 SAFE conference by TBI. Initially, I was amazed at the positive and interested response I received from the SAFE conference attendees. However, after sitting through one too many canned presentations of “County X, Y & Z’s security programs” I realized that real information from real companies was a breath of fresh air for the SAFE conference attendees. FYI, to our importer-exporter members, SurveyMonkey and its competitor Zoomerang are a great way to get feedback you’re your customers on how they rate your product/service and how you can improve your product/service. TBI will be using this tool going forward to keep in touch with the attitudes, opinions and needs of SME importers/exporters.

Getting an A+ on Your AES Compliance Review

Jerry Greenwell, Ombudsman for the Census Foreign Trade Division, delivered an informative and entertaining session at the ICPA annual gathering recently. A few key points...

• Don't get confused by the lack of coordination between Incoterms and export regs etc. The only thing to understand is whether the export is buyer or seller-controlled.
• New on his presentation agenda...AES Compliance Review Program...help to avoid costly penalties and being sent to the principal's office, Office of Export Enforcement (ital added for emphasis).
• Best Practices to get an A+ on your compliance review...(I love this one), "Keep your contact data at the Census Foreign Trade Division up-to-date." Duh!
• Voluntary Self-Disclosure is also new...need to report a violation or potential violation? Score brownie points by self-disclosing.
• Routed export transactions (where the overseas buyer controls the movement of the cargo) are not good business practice.
• Option 4, post-departure filing is still under moratorium, "...and probabaly will not re-open..." (This is Jerry opinion.)

Jerry knows his stuff and is available for trainings for the cost of travel and a per diem. If you want to contact him directly call 301-763-6975 or e-mail him.

Compliance Professionals Unite!

This association is a boon not only to compliance professionals but to all US SME companies and employees engaged in international trade. Membership is cheap for individuals and their renowned bulletin board for members only is a treasure trove of information for managers and employees charged with overseeing and managing the company’s import and export compliance. I recently got back from their annual conference (in San Antonio this year) and having sampled their educational sessions found the quality of their professional education to be top notch. If you haven’t taken a look at what is available to your import/export operations from ICPA I strongly suggest you go to their web site and check it out.

10 + 2 Becoming a Reality - Get Prepared

10 + 2 is bearing down on us. The rule is now a Notice of Proposed Rule Making (NPRM) and in less than 60 days it is likely to be inevitable. For information on how to prepare your company for this change see Customs web site, the American Association of Exporters and Importers Alert, Trade Innovations' write-up, and any of the Trade Bridge International FAQs on 10+2: October 18th, 2007 webinar, June 7th, 2008 webinar. If you are considering direct-filing of your customs entries with TRG Direct you may automatically be prepared to comply with this new security rule. Contact the direct-filing experts for details.

Trade Bridge at the World Customs Organization

Next week Trade Bridge makes its debut at the WCO in Brussels. I'll be presenting an update on C-TPAT from the perspective of SMEs. Thanks to all of you who completed the survey. Your views will be made known at the WCO SAFE Framework of Standards conference on December 11th. Check www.TradeBridgeInternational.com for the results of the C-TPAT Survey.

SME's & Emerging Markets Overseas

If you are interested in exporting to emerging markets, check out the joint initiative by the Small Business Association (SBA) and the Overseas Private Investment Corporation (OPIC): OPIC Small Business Center. Our friend, the respected U.S. Rep. Donald Manzullo (R-Illinois 16th) helped put this one together. Thanks again, Don, for your relentless support of U.S. small business.

AAEI, IPSC, WCO and other Acronyms to Chew On

What's going on at Trade Bridge...we are in conversation with the American Association of Exporters and Importers to see if there is a way we can work together to the benefit of our collective members. You'll find our sponsor, TRG Direct, at the next AAEI Western Conference in Newport Beach, CA on January 20-22, 2008.

Meanwhile back in Brussels yours truly will be representing US SME importers and exporters at the upcoming WCO Forum 2007 on December 11-12, 2007. I'll be participating on a panel titled C-TPAT five years on: A review from the trade. Mike Laden of Trade Innovations, Trusted Trade Alliance and TBI Brokers will be chairing that panel so it promises to be informative. Trade Bridge and its sponsors are conducting a survey to collect information from US SMEs about C-TPAT to report back to the WCO conference. Please help us by completing the brief, 10 question survey whether you have participated in C-TPAT or not. SURVEY

And for those with big investments in imported consumer products the dozens of pending intiatives and legistlative proposals loom large. IPSC, the Importer Product Safety Coalition, is a new coalition being organized by Sandler, Travis and Rosenberg to get up front and center in Washington on behalf of importers. Unfortunately the $5000 a month it costs to participate isn't an easy pill to swallow for us SMEs. TBI will do its best to keep those affected informed of significant issues as they arise. In the meantime we strongly suggest you refer to information on the AAEI website, from the Journal of Commerce and ask your broker to keep you informed.

What is 10? What is 2? What is 24?

Here are the 10 advance data elements to be required by "10+2" from the responsible party, the importer:

1. Manufacturer name and address
2. Seller name and address
3. Container stuffing location
4. Consolidator name and address 
5. Buyer name and address 
6. Ship to name and address   
7. Importer of record number   
8. Consignee number   
9. Country of origin of the goods   
10. Commodity Harmonized Tariff Schedule number (6 digit)

Here are the 2 additional advance data elements to be required by "10+2" from ocean carriers:

1. Vessel Stow Plan
2. Container Status Messages

Expect to have to produce this info 24 hours before the vessel is loaded.

10+2 Redux, featuring John Jurgutis, CBP

Trade Bridge members met with CBP this month courtesy of TBI, to hear about CBP's Security Filing (10+2). Members met in the San Francisco Bay area with John Jurgutis, a Management and Program Analyst for the Secure Freight Initiative. The seminar was simultaneously broadcast to a TBI SME webinar audience. Over 200 SME participants were engaged in finding out what CBP's latest Security Filing (10+2) means for them and their business operations. (The WCO also addressed the audience from Brussels but I'll discuss that topic in a later post.) This effort by CBP to talk directly to SMEs is part of their response to demands from the trade that "CBP needs to reach out and get our feedback." If you're interested in seeing the program materials check out this TBI page. Feedback to CBP can be sent to John Jurgutis.

Timing is Everything

It's amazing how important a few data elements can be when it comes to national security. CBP is turning the importers' world upside down just by requiring that they produce the data elements for a shipment at different times than in the past. It is rumored that those who sit back and do nothing are guaranteed to pay more to their customs broker and/or other intermediaries to have them manage this aspect of compliance and file the security information with CBP. For more on this CBP Security Filing go to the FAQ.

Top IT Pain Points for Global SMEs

I stumbled on a blog called "The Entreprenuerial Mind" by Jeff Cornwall who is the Director of the Belmont University Center for Entrepreneurship in Nashville. He cites a new study from the International Office of the International Council for Small Business (ICSB):  Global Technology Study conducted in collaboration with DELL Inc. I resonated with the Top IT Pain points not only because I think they apply to all SMEs but also because these are the very issues that TBI sponsors wrestled with when developing the TRG Direct product for US importers: managing costs of technology, product complexity making them too dependent on an outside company for support, and issues with trial-ware installed on new computers.

Fortunately, TRG Direct addresses these IT Pain Points very well.

The cost of accessing the technology is a small, one-time, upfront fee ($1000) and a per entry fee ($20-$30/entry) with no long term commitments or volume contracts to agree to. All the cost of upgrades are borne by the provider, TRG Direct. The issue of support is non-existent because the product is web-based and therefore there is no need for supporting software that is housed on the customer's server. Finally, as the product is web-based, there is no trial-ware to have issues (no need for new computers either).

As we say in my house, "No pain, no pain."

SBA Trade Programs Act Approved by Committee - Sometimes I Feel So Republican

Sometimes I feel so Republican. (You know, "keep taxes low to stimulate the economy" vs. "increase taxes to pay for programs to stimulate the economy.")

Call me "old-fashioned" but I would like to know that taxpayers' hard earned dollars are actually funding something worthwhile. And that's why I can't quite decide whether I like this amendment to the Small Business Act or not.

The House Small Business Committee just approved an amendment to the Small Business Act that appears to be a big coup for future and beginner SME exporters: "SBA Trade Programs Act of 2007 - To amend the Small Business Act to improve trade programs, and for other purposes." It covers the gamut of govenmental support from finance to trade protection. The intent of expanding U.S. exports via the SME exporter is laudable. I'm just not convinced this is the way to do it.

The amendment will cost taxpayers money to implement and maintain. Will the cost be worth the return to our economy? What is the expected return to our economy? None of this information appears in the amendment so it's impossible to make an informed decision about whether or not to support the amendment.

As an advocate for SME exporters it seems like a slam dunk for Trade Bridge to come out in favor of this amendment. It does, after all, appear to provide significant help to SMEs that want to expand into global markets. But is it prudent to support the amendment on what may simply be, a noble goal? If monies are appropriated (which the amendment calls for) and the amendment doesn't do anything to either improve the export capabilities of SMEs or the U.S. economy it will be wasted time, effort and money.

I'm wary of the government's ability to design and implement these changes effectively and efficiently when the accountability seems either nonexistent or an afterthought. (Again, call me "old-fashioned.")

For now though, I'm keeping an open mind while I conduct more research. Check back here regularly as I will continue to update and post information as I get it.

$1,000,000 Per Keystroke? Let's Talk!

  According to one of the senior members of the Private Sector Consultative Group of the WCO, that's the cost per keystroke to multinational international traders every time a government agency or regulatory body imposes new guidelines or requirements on them. I have no idea how accurate this estimate is but even if it costs $10,000 per keystroke, that's enough to put some SME international traders out of business. And it's enough reason for TBI members to be concerned about the impact that 10+2 and the SAFE framework will have on their businesses. TBI addressed the CBP 10+2 issue with members recently. Now it's on to the WCO and the SAFE Framework.

On June 10, 2007 Trade Bridge International 6000 SME importer and exporters began whispering to Michael Schmitz, Director of Facilitation and Compliance for the WCO. Today, July 18th, 2007, that whispering grew to a harmonized dialogue between TBI and the WCO. Director Schmitz, Mr. Simon Royals of the WCO - Facilitation Sub-Directorate (Procedures) and yours truly had the first of, what I hope are, numerous conversations about the interests of SMEs and the impact of WCO initiatives on their operations.

As the sponsors of TBI accurately perceived before TBIs formation, there were no national or international organizations speaking exclusive on behalf of SME importers and exporters. Thus, not only is CBP anxious to reach our members as demonstrated by TBI's recent seminar-webinar on 10+2, the WCO is eager to hear from our SME members as well. The exchange between the WCO and TBI today confirmed that perception.

Director Schmitz tentatively invited me to speak on behalf of the Trade Bridge SME members at the World Customs Forum scheduled for February of 2008 in Brussels. This would be the first formal introduction of TBI to the WCO and it would be an opportunity for SME importers and exporters to be heard directly at the international level. While these are all preliminary plans, the tone and content of the conversations were very positive for TBI members.

Director Schmitz has also offered to speak to an audience of TBI members in the U.S. on the topic of the SAFE Framework of standards to secure and facilitate global trade. Coincidentally Richard DiNucci, Program Director for CBPs Security Filing (10+2) has offered to speak to TBI members again to update them on the progress of the Security Filing. (Mr. DiNucci spoke to TBI members on June 7, 2007.) Note that 10+2 and the SAFE framework are not the same and an opportunity for SMEs to hear from both CBP and the WCO could be both timely and eye-opening for SMEs, CBP and the WCO.

We'll keep you posted on how, when and where you can learn more about the impact of the tightening security environment on your business operations. And, as we suggested with direct-filing of customs entries, we are committed to finding solutions that mitigate the negative impact of the changing security and regulatory environment. To learn more about securing your supply chain contact the guys at Trade Innovations. Not only can they help secure your supply chain, they can find ways to reduce your costs of importing.

You've got to know where to go.

Best Sites for Global Entrepreneurs from CNN.com - I like this list of web sites assembled by Fortune Small Business (appearing on CNN.com and written by Alessandra Bianchi). It puts Alibaba and finding buyers and sellers first on the list. Isn't everthing else secondary?

And don't miss the World Bank's Doing Business database for immediate feedback on the regulatory climates all around the world. You can get a regulatory snapshot of any country in the world within a few clicks of your mouse. Be sure to check out the rankings of countries you are interested in for Trading Across Borders and Enforcing Contracts. For instance, while the U.S. requires 6 basic export documents, China requires 12 basic import documents....where do the extra 6 docs come from?

More useful links can be found in this article about Going Global from the same sources.

The Value of Direct-Filing for SME Importers

Trade Bridge's sponsor, TRG Direct/TBI Brokers, Inc., recently introduced a direct-filing service for SME importers (AKA self-filing). However, for most SME importers, direct-filing still exists in that dreamland of "what might be." This situation, I hope, is poised for change.

This morning I received a Research Brief by Aberdeen Group: Download aberdeen_group_on_tradecompliancevalue_2007.pdf . In a few pages they illustrate 5 compliance-related savings opportunities including "potential self-filing savings." This is the result of research conducted by Aberdeen, "the leading provider of fact-based research focused on the global technology-driven value chain."

It's obvious that Aberdeen is researching larger companies but, in this case, that doesn't make the conclusions they arrive at less relevant to SMEs. Usually, the solutions are not realistic for SMEs or there are no solutions designed for SMEs. In the example of direct-filing this is not true.

TRG Direct is the only direct-filing service designed specifically for use by SME importers. The cost of entry is low, there are no long-term contracts, the transition can be phased in and support from licensed customs brokers is included in the service. To date the ROI, return on investment, for TRG Direct clients ranges from 261% to 1148%. It makes sense for SME importers to take Aberdeen's advice and "assess the feasibility of using a self-filing service."

Expert Export Advice

Expert advice is often hard to come by or too costly for SMEs. But the Internet is a wealth of information on practically any subject including exports. SME exporters may find the Export Institute's Ask the Experts page useful not only to get their questions answered but also to read the Q&A from previous users. For example, "How much do we add to our domestic price to establish export prices? might be a question that piques your interest to investigate further....

Border Wait Times at Your Fingertips

Both the US and Canadian customs services have online resources to find out how long you'll have to wait to cross the border (southern & northern) at various points. So if you're reading this and waiting at St. Stephen or Blue Water Bridge I suggest you hightail it over to Rock Island or the Detroit and Canada Tunnel where you' won't have to wait at all :-)

Is There an FTA in Your Future?

There are four new bi-lateral Free Trade Agreements pending. See if they (Peru, Columbia, Panama or South Korea) might help your business...get the updates here.