“Shippers want access to timely and reliable data andevents,” said Michael Loup, BDP CIO. “That requires threeformats: track and trace; data mining, which are themetrics and reporting functions; and the supply chainevent management (SCEM) function, which covers theestimated and actual dates, and notification of eventsthat were supposed to happen, didn't happen, etc.”

Most companies today understand the need to utilize afull-service portal, Loup added. “Certainly that is the casefor global organizations, which have to deal with multipletime zones and regions. They need tools and informationbecause human resources are either not available orprocesses don’t exist. Helping to make the world asmaller place is one of the goals of our new customerservice portal, BDPSmart.com,” Loup said. “It givescustomers access to an entire global suite of tradelogistics business application tools. We feel we can offera unique combination of visibility in all three areas oftracking, data mining, and event management.”

Technology that makes logistics easierThe key benefit of a full-service portal is customer self

service, Loup pointed out. “The information customersneed is all there,” he said. “Getting data in advance letsshippers manage their own process, rather than having tocommunicate with resources and vendors around theworld. It is not always convenient calling a serviceprovider in the US if you are a customer in Hong Kong.Customers ultimately want self-service. Even if they preferto pick up the phone and call their local contact, thatcontact person may not have the answer and has tocontact someone else for the information. All of ourtransactions that we execute around the world actuallyfeed into BDPSmart.”

Loup explained that the portal application can becustomized for users for certain aspects, such as authorityto subsets of the transactions and customization of

information views. “At the beginning you have an order orshipment moving on one or more modes oftransportation,” he said. “There is core informationassociated with each order or shipment that is universal.We simplify it down to the information we consider to becommon among all shipments. Not the lowest common

denominator but the common denominator. Informationfrom a customer’s ERP application can add to the value ofthis information.”

The challenge and the benefit of portal implementationis that it forces shippers and providers to standardize dataand processes. “Because someone in Asia may handle ashipment differently than someone in the US, the datahas to look the same to the customer because, quiterightly, they don’t care where the shipment originates,”Loup said. “BDPSmart works for all of our customersglobally in all regions.”

Track & Trace Users—customers and BDP staff—can create their

own dashboard configuration to meet their needs. Clientscan access total shipments data or just specific shipments'details, e.g., shipments out of the US into a certainregion. A window of shipments can be viewed from anextensive historical database.

A “my user” setup can be designed from a number ofcolumn data elements—shipper reference, countrydestinations, ETA date, carrier, etc. By selecting a range of(continued on page 3)

SMART BUSINESS DECISION Selecting a web portal that's right for your company

Global Logistics & Transportation Solutions 2006 - Issue 3

I N T H I S I S S U E

Smart business decision: Selecting a webportal that’s right for your company

Centralized vs. Decentralized Compliance

It’s now or never - Why you need a trustedresource for expedited shipments

Case Study: Eastman Chemical Company – Asia PacificStrategic partnership helps Eastman improveservice while keeping costs competitive

Regulatory Watch - Extensive Changes tothe Harmonized Tariff Schedule of theUnited States

Risk Management - Protecting your rights to file a cargo claim

“We feel we can offer a uniquecombination of visibility in allthree areas of tracking, datamining, and event management.”

Michael Loup, BDP CIO

For many companies improving supply chain performanceis all about the data. Shippers want a clearer view of theirshipments—faster, better, more up-to-date information,when they want it and how they want it.

That’s a tall order but a necessary one. Inability to getadvance visibility of information can be costly. But withthe right web portal, shippers can move closer to end-to-end control of their supply chains. The right portal canadd value by freshening business practices andstandardizing processes, which help reduce costs,resulting in increased profits.

What to look for It is important to know what to look for and what you

should expect from your provider’s portal capabilities.Shippers should be cautious when selecting technologysolutions and not cobble together a number of capabilitiesfrom various resources, hoping to get the visibility theyseek. Instead, look for a resource that offers many, if notall, of those capabilities in one system.

www.bdpinternational.com 2

In determining whether to centralize or decentralize acompliance program within your organization, theassessment and design should ideally consider thecontext, scope, and complexity of your businessactivities and legal structure. Factors such asage/maturity of the corporation, corporate culture,structure and operating capabilities, as well as legal andcompliance performance history must be giventhoughtful consideration. Any successful complianceprogram, whether centralized or decentralized is allabout accountability.

Internal resources and influences toconsider:g Who has compliance information?g How often are Customs surety bonds reviewed for

adequate coverage?g Who is responsible for new product sourcing?g Who classifies your product, identifies potential

preferential treatment (free or reduced duty programs),participating government agencies requirements (suchas FDA, EPA, etc.), country of origin marking, andreceiving/discrepancy reporting?

External resources also play a part:g Customs, FDA, and other participating government

agenciesg Transportation Carriersg Customers, both internal and externalg Customhouse Brokersg In-house/outside Legal Counselg Manufacturingg Overseas Suppliersg Surety Companies

How do your external resourcesfunction?g Do your service providers work in a centralized or

decentralized environment?g Does the service provider's environment mesh with

yours?g How much authority does the service provider have to

classify and adjust value?At right is a comparison chart of centralized and

decentralized models. Determination of the model is notan “either/or” situation. Often companies do not have astrictly centralized or decentralized compliance program.Companies have a hybrid of the two models.

4Single business unit “selling” complianceservices to other business units

4Less local autonomy4Risk assessment is top-down4Roles are clearly defined

4Ownership and loyalty belongs to the localunit

4Risk assessment is bottom-up4Roles can be clearly defined or muddy

4More likely to have a single complianceofficer with central, overarching authority

4Should have access to company board ofdirectors

4More likely to have a compliancecommittee, lead by the local compliance“expert”

4May or may not be a central authority4May or may not report into the compliance

officer4No access to board of directors

4Costs more easily controlled4Top-down risk assessment gives accurate

reflection of risks at all levels of thecorporation for prioritization & action

4Costs more easy to monitor, but less easyto control

4Bottom-up risk assessment gives a more in-depth analysis of the liability, in that unit only

4Training is uniform throughout thecorporation

4Greater ease of communication to all levelsof the corporation

4Able to set compliance policy or enforcebest practices company wide

4Training is tailored to the specific needs ofthat unit

4Relies on local “experts”4Communication comes from local leaders,

not necessarily in line with overallcorporate goals

4Increasing regulatory preference for centralized organizational structure

4Compliance staff embedded in separateunits needs to be managed through acoordinated program or person

Regardless of which model is more representative ofyour compliance program, or if you are in the processof developing or revamping your compliance program,consistency, a good compliance manual, andcommunication are the keys to your success.

For more information on this topic, contact AdrienneGraddy, BDP Director - Compliance Solutions, atagraddy@bdpnet.com, or (847) 350-2156.

4Corporate “policing”4Overkill4Control issues

4Differing opinions4“Loose cannons”4Control issues

D E C E N T R A L I Z E DC E N T R A L I Z E D

CENTRALIZED VS. DECENTRALIZED COMPLIANCE By: Adrienne Graddy, BDP Director - Compliance Solutions

www.bdpinternational.com3

(continued from page 1)weeks or months, the SmartTracking capability canshow, for example, one month back and two monthsforward. Users can select weight formats in pounds orkilograms, and different date/time formats.

Just about any information about the shipmentcan be viewed: reference numbers, carrier, vesselname, ports, plus details on the product and itsweight. Data also shows confirmed sail date, whendocuments were sent, how sent (including airway billnumber), so that users located at the destination canpick up the shipment documents. There is a hyperlinkwith the airway bill number, so if multiple packageswere sent out, they can be identified by theirindividual airway bill numbers. The system can alsohyperlink with the steamship lines’ systems bylinking via the container number.

BDPSmart has a very robust document storage,retrieval and printing system. Depending on thecountry destination and customer requirements, everyshipment requires a different set of documents. “Thegoal is to use electronic documents more often thancouriers,” Loup said. “Not only is there hyperlinkaccess to shipping documents, we also have manyways to receive documents associated with a shipment(pdf, scanned, etc.) and they are all viewable througha single link on BDP’s SmartTracking.”

Just in caseDue to the critical nature of event management,

Loup believes SCEM will see the most growth becauseit must take into account different modes oftransportation, as well as different events for eachmode. “Once you have all those events, it’s a questionof how do I want to manage them, or which events doI as a shipper or BDP user, want to see?” he said.

There are currently three categories of alerts:Pre-alert: When clients or BDP users want to be

alerted a certain number of days before an eventhappens, e.g., notification one day before a sail datethat shows the shipment will be sailing the next day.

Plus or minus estimated: If an estimated datechanges by plus or minus a certain number of days,then clients and BDP users may want to know andmake adjustments.

Actual dates: This can be a plus or minus in theactual number of days. Using plus/minus two days,users can ask when an actual event has happened-two

days after it happened, or if it has been missed twodays later and there is no actual event recorded.

“We don’t want to flood customers or BDP userswith emails,” Loup emphasized. “The eventmanagement application will run in the backgroundseveral times a day, and every shipment that meetsthese criteria will get one email, in which will appearthese three alert categories. In each category therewill be multiple shipments that meet each criterion,together with line item information. I can also selectthose products for which I want event notifications, aswell as types of moves, country of destination.” Made to measure

BDPSmart’s data mining tool can dig deep intoshipments and provide information sliced and diced ina number of ways. A customer may want to view agroup of shipments. It will let them pick multiple areasand at a glance see everything shipped to and fromany and all locations. It is a dynamic list—every timea customer begins shipping to or from a new place, theshipment is automatically included.

Users can select inventory graphs that actuallymatch the numerical data and mask it into individualgraphs, such as carrier usage by ocean freight, by TEU,shipments by month, and TEUs by month. There aredata graphs for exports, imports, carrier metrics,supply chain, non-conformance metrics. Users can alsoaccess the detail data for each graph, which allowsexcellent drill-down reporting capabilities. The systemalso will make metrics a default for a particular need(e.g., shipments per month), so that every time auser, who selects it and signs on, those metrics will runautomatically and will pop up on a screen.

The system’s standard inventory reports are alsobeing expanded. Data mining reports via a BDPSmartuser report capability is an ad hoc report developmenttool that allows users to build their own customizedreports with export into MS Excel.

For more information on the BDPSmart portal and its capabilities, contact Michael Loup, CIO, at michael.loup@bdpinternational.com, or (215) 574-7974.

SMART BUSINESS DECISION Selecting a web portal that’s right for your company

BDPSmart’s data mining tool candig deep into shipments andprovide information sliced anddiced in a number of ways.

A hot shipment from Europe that requires a dedicatedsurface move-in this case a truck waiting for freight tocome off the airline in order to move it straight to thecustomer’s door. A shipment of fire pumps to Alaska tomeet the last sail deadline of a vessel in Anchorage.Ladies’ undergarments for a major US retailer, shippedfrom Indonesia and Hong Kong to arrive at adistribution center within a very narrow window, inorder to be trucked to its final destination inMississippi. And a 36-hour, non-stop movement of

cargo involving teams of truck drivers for oversizedfreight that will not fit in an aircraft.

All these shipments have one common thread:there is absolutely no room for error. No near-missshipments. And certainly no excuses.

Welcome to the world of expeditedshipments

Every corporate procurement manager, materialsmanager or plant manager, who has ever faced similardemands, knows the value of a reliable expeditedshipping resource. The 865 pounds of fire pumps toAlaska is a high visibility shipment for the customer—it has to make it. The customer needs to know that thefreight is hand-held throughout.

Ditto for the charters from Indonesia and HongKong. The freight will be available late December2006 and must arrive at a specific time. The move willrequire two charter planes, as well as commercial air.In this particular case, three months out, the clientknows it is going to be a challenging transportationissue and is preplanning in order to be ready. Theyknow they are going to be in a pinch.

“When you get the request, you must meet theretailer's deadline,” said Kathy Blount, BDP Global AirFreight Product Executive. “The cost of not getting thefreight to the destination far outweighs the possiblepenalty for that shipment not arriving on time. Whena big box retailer or a major department store runs anad and they don't receive the product by the deadline

that has been specified in the purchase agreement,there could be hefty financial penalties, cancelledorders and the potential loss of that major customer.”

Blount said that fitting the need with the rightproduct is what many shippers now demand forexpedited. “Carriers and providers are expected torecommend the best fit, which can include acombination of air and ground. This requires flexibilityon the part of the service providers.” Although trucktransport is quite price-competitive compared with air,

cost is not generally the decidingfactor for shippers who need anexpedited service. Getting theshipment from point A to point B iswhat matters.

Expedited shipments come in allshapes and sizes. Each situation isunique; no two are identical. “In

almost all cases, the cost of the heightened level ofservice, the minute-by-minute tracking updates andcommunication far outweigh the cost of the productnot getting there,” Blount emphasized. “That's thebottom line. For example, in the construction industryit is not uncommon for a product to have to be at aparticular location at a specific, committed deliverytime. Engineers and construction workers are plannedon a very tight schedule and our customers do notwant them standing around waiting for a shipment toarrive. It’s the same with production machinery thattechnicians are waiting to install. If the freight doesn'tmake it, or it is late, people are getting paid for downtime and the client could be staring at significantlosses and budget overages.”

What should shippers look for in aprovider of expedited products?

To Blount it's simple. “Shippers look for providerswho are going to communicate and deliver,” she

stated. “Let’s say you have adomestic US next flight out-perhaps a line-downsituation—a manufacturermay need a machine part toget the production line upand running, or they ran out of raw goods and need toexpedite those goods to keep the line up. A goodresource should be tracking that plane, and monitor itsprogress in real-time. If there is bad weather and theyhave to take an alternative route and it adds time tothe flight, then they can let the truck that's waiting atthe other end know, and inform the customer of theexact status so that contingency plans can beimplemented. A line down can cost thousands ofdollars for each minute. It can literally stop a companyin its tracks. While it is impossible to control all thevariables in transportation, we can certainly track it,trace it, and report on it.”

Shippers also should look for providers with astrong US presence and deep knowledge of the USmarket, as well as experience in every facet of thehighly specialized niche of expedited shipments. Theyshould have solid experience with transportationprocurement and logistics expertise, backed byinformation visibility and the infrastructure necessaryto deliver that visibility—expert analysis, planning,execution, including destinations, shipment status, andcorrective action. There should be an optimum rangeof offerings: product categories, costs, and modes.

According to Blount, there are three primaryexpedite services: next flight out, dedicated surfacemoves (US domestic), and charters (US domestic andinternational). BDP’s expedite products, known asBDP/now!, are a one-stop shop, Blount pointed out.“We can service the customer in just about any areaof need. It is important that expedite providers (continued on page 7)

www.bdpinternational.com 4

IT’S NOW OR NEVERWhy you need a trusted resource for expedited shipments

“In the world of expedited shipments,there's no room for error…shippers look forproviders who are going to communicateand deliver.”

Kathy Blount – BDP Global Air Freight Product Executive

Next Flight Out: Counter to Counter – Under 70lbs per piece; Cargo - Over 70lbs.

Air Charter – BDP's charter experts offer multiple aircraft charter options to fit the size of eachshipment, when commercial airline schedules and capacity aren’t adequate.

Expedited Surface – Exclusive-use vehicles from cargo vans to 53 foot drop-center tractortrailers, and everything in between. Equipment to fit any requirement.

BDP/now! expedited services

Kathy Blount – BDP Global Air FreightProduct Executive

www.bdpinternational.com5

CHALLENGEAs manufacturers continually expand their operations,

logistics service providers and freight forwarders must

scramble to keep pace. Due to its continual growth and

customers’ demands, Eastman Chemical Asia Pacific

can’t afford to wait for its LSPs to play catch-up.

Eastman Chemical Company is one of the top 10

global suppliers of custom-manufactured fine chemicals

for pharmaceuticals, agriculture and other markets.

Headquartered in Kingsport, Tennessee, U.S.A., the

company is the world's largest producer of PET

polymers for packaging, provides key differentiated

coatings, adhesives and specialty plastics products, and

is a major supplier of cellulose acetate fibers.

In Asia Pacific, Eastman requires its logistics

partners to help manage the complexity and scope of

its regional service offerings, and critical online

visibility of inventory.

Case Study: Eastman Chemical Company – Asia Pacific

STRATEGIC PARTNERSHIP HELPS EASTMAN IMPROVE SERVICEWHILE KEEPING COSTS COMPETITIVE

CHALLENGEEastman Chemical Company’s Asia Pacific organizationoperates in a highly competitive market. To enable thecompany to focus on its core competencies, Eastmandemands high quality service and resourceful solutions—notjust capabilities—from its Logistics Service Providers (LSP).

SOLUTIONIdentify Logistics Providers who perform ata high level, are flexible, willing to listenand respond, and who work in partnershipto provide the right solutions and value forEastman and its end customers.

SOLUTION

Seeking a culture that goes beyond capabilities

Located in Singapore, Eastman Chemical Asia

Pacific Pte Ltd (ECAP) is the hub for Eastman

Chemical Company's supply chain and logistics

management in the region. Eastman relies on BDP

service for select outbound (since 1996) logistics

lanes from the U.S., and outbound/inbound/domestic

logistics in Malaysia, China, Thailand, Singapore, and

Hong Kong, including warehousing in Shanghai,

Singapore and Hong Kong.

ECAP’s Director of Asia Pacific Customer Supply

Chain Services, Tom Morton, is responsible for all

supply chain and business operations support in the

region. “Since we began working with BDP in Asia in

2000, we have seen fairly significant cost reductions

and improvement from a service and reliability

standpoint. We utilize BDP’s expertise in

documentation, freight forwarding, importing and

exporting, customs clearance, warehousing, as well

as IT linkages to keep our processes flexible.”

“In essence, BDP allows us to focus Eastman

resources on manufacturing and distribution of

chemicals,” added Capt. Raymond Heman, Eastman’s

Regional Logistics Manager. Morton added that, “As

our marketing of chemicals, plastics and fibers in the

region increased, BDP has played a strategic role in

helping to continuously improve Eastman service

levels while keeping costs competitive.”

At frequent planning sessions, Eastman and BDP

partner to respond to specific issues on behalf of

Eastman’s clients. These are meaningful, objective

discussions on how best to help Eastman help its

clients. “We want BDP to be a part of that process,”

Morton said.

Keeping product moving“BDP is able to provide Eastman with

documentation on a global basis,” said Capt.

Raymond. “This enables us to keep shipments

moving throughout the region. We view BDP as an

information provider, keeping Eastman current with

our carriers, shipment confirmation and tracking. BDP

systems manage the data and provide us with reports

and oversight capabilities. This enables us to stay on

course and continue to get product to our customers

on a timely basis.”

"Visibility is critical,” said Tharin Walker, BDP’s

Global Chemical Team Manager, Asia Pacific Region,

in Singapore. “Eastman can go online and view

inventory levels at any of their storage locations

in real time. We work closely with Eastman at

many locations throughout Asia, so BDP staff at

Singapore can, for example, see the status of

import Customs clearance that BDP staff in

Shanghai may be handling. We want to stay on

top of everything that moves.”

Stock and load“Freight forwarding and warehousing go hand-in-

hand in Asia,” said Walker, "which is why much of

our business services include warehousing elements.

In Asia, countries are not linked by a common

Customs zone, a common landmass. The ‘common’

inter-country mode of transportation is ocean.”

“As Eastman’s warehousing relationship with BDP

expands, the twin issues of security and compliance

are important to us,” said Capt. Raymond. “In

addition to Eastman’s in-depth corporate and

security compliance processes, BDP provides an

additional check-step in the AP region to ensure that

products moving in and out of Eastman warehouses

conform to the regulations for each of the countries.

We look to BDP to assist us in managing these

critical processes.”

While many providers may have regulatory

compliance capabilities within the U.S., their

expertise elsewhere is not as deep. “BDP is very up-

to-date on regulatory changes,” Capt. Raymond

emphasized, “which not only helps us to adhere to

Eastman protocols but also with those of various

countries in which we operate.”

Keeping costs down and service upSuccessful logistics management means minimizing

disruptions, reducing risks, and identifying solutions.

It’s also about controlling and reducing costs.

“We have realized certain savings from our

warehousing operations, where BDP has helped

with benchmarking,” Capt. Raymond said. “In

addition to reduced costs with our LCL shipments,

we are working with BDP to streamline some of

our business processes. This includes letters of

credit documentation.” BDP is preparing to transfer

the documentation and preparation of letters of

credit from BDP’s York, Pennsylvania facility in the

U.S. to Singapore.

For Eastman, the benefits could be substantial:g Faster processing because the complete document

set gets to the bank more quickly and ultimately

to the buyer fasterg Eastman gets paid much earlierg Savings in courier fees as the sales and the

banking activities are now located in Asiag Eastman can get answers to any document

questions they may have during the same

business day, instead of waiting until the next

business day due to the difference in time zones.

No cookie cutters allowedWhat does Eastman AP look for when selecting a

provider? “Eastman looks for a common corporate

culture that goes beyond just providing capabilities,”

Morton pointed out. “Our partner should be willing

and have the ability to identify and recommend

creative solutions that fit our needs, where we can

look at improvements together. We want local

knowledge for each country in which we do business,

plus quality freight forwarding and documentation

capabilities.”

“Service from local BDP staff in the various

countries has been very good,” Capt Raymond said.

“We see a common culture within BDP’s local offices

that we want—they are very supportive and

proactive, and are very willing to explore ways of

improving processes and operations. In terms of skill

sets, we have found that BDP hires people with local

knowledge—a very sound knowledge of

documentation and freight forwarding.”

“Eastman says they do not want to build a

supplier-vendor relationship,” Walker adds. “Instead,

Eastman wants a partner. Morton and Capt. Raymond

want their own staff to look at BDP as an extension

of Eastman operations throughout the region. As

Eastman executes its growth strategy, BDP is keeping

pace through delivery of ever evolving service values.

This is not a cookie cutter relationship.” Eastman

recently received a prestigious supplier-of-the-year

award from one of their major clients, following a

joint plan with BDP to improve delivery performance

and reliability for that client. “It’s another example of

the strength of partnering,” Walker added.

For Morton, it is also about trust and reliability.

“In Asia, we look at BDP as a lead logistics provider

(LLP), to manage other freight forwarders and

carriers as an extension of Eastman’s logistics arm.

There is no provider that has it all. However, BDP’s

willingness to sit down and discuss options, listen to

feedback and to develop further capabilities to better

meet our needs and our customers’ requirements—

really are differentiators.

“It is that willingness to listen and to work in

partnership, to provide the right solutions and fill the

gaps where it makes sense—those really set BDP

apart. BDP looks for ways to be flexible in how

solutions can be provided, so that there is value for

our end customers and for Eastman.”

www.bdpinternational.com 6

“In Asia, we look at BDP asa lead logistics provider(LLP), to manage otherfreight forwarders andcarriers as an extension ofEastman’s logistics arm.”

Tom Morton – Director ofEastman Chemical Asia Pacific

Customer Supply Chain Services

“In essence, BDP allows us to focus our staff and resources onmanufacturing anddistribution of chemicals.”

Capt. Raymond Heman -Regional Logistics Manager

Effective January 1, 2007, the US tariff numberthat applies to your imported product may very wellchange to a different tariff number. In the amended2006 version of the US Harmonized Tariff that weuse today, there are over 10,000 possible 10-digitclassification codes. In January about 1,000 of thesenumbers will be changed, eliminated, or merged intonew headings and subheadings. Changes will occur in83 of the Harmonized Tariff’s 97 chapters.

The International Trade Commission (ITC) hasadvised that new classification subheadings will berevenue neutral, i.e., if you are paying a three percentduty today, you will pay a three percent duty in 2007.However, our experience with previous “revenueneutral” tariff changes has shown a neutral monetarychange for the government, but many times a positiveor negative change for the importer. For example,where a new subheading is a combination of two or

more present subheadings, the new duty rate will bederived from the existing subheading that accounts fora preponderance of the trade.

ITC has published the proposed amendments—publication 3851—to the Harmonized Tariff on theirwebsite. You may find it helpful to review Appendix Dof this document as it is a correlation table showingthe current HTS number along with the proposed HTSnumber. All ITC discussion and documentation is ofthe legal text, i.e., the eight-digit level. As the HTSnumber required on documentation is 10 digits, wewill have to wait until a later date to learn the finaltwo-digit Census statistical suffix.

As the Department of Commerce Shipper’s ExportDeclaration (SED) Schedule B is derived from theHarmonized Tariff, the number used to describe yourexport product will also be affected. No word fromthe DOC at this time as to when the Schedule B will

be aligned with the 2007 US Harmonized Tariff. Any changes to the US Harmonized Tariff will have

to be approved by the US Congress before takingeffect. However, we anticipate that if Congress doesmake a change to the proposed amendments it willbe minimal. Be assured that BDP’s Import and Exportareas will stay on top of the proposed tariff and haveour automated systems current and ready to go onJanuary 1, 2007.

Should you have any questions or needassistance in reviewing your classifications, pleasecontact Adrienne Graddy, Director ComplianceSolutions, at agraddy@bdpnet.com or (847) 350-2156, or any member of the BDP CorporateRegulatory Compliance Team.

EXTENSIVE CHANGES TO THE HARMONIZED TARIFFSCHEDULE OF THE UNITED STATES

R E G U L A T O R Y W A T C HPERIODIC UPDATES ON US CUSTOMS POLICIES AND OTHER REGULATORY ISSUES

(continued from page 4)understand that a particular need or shipment requires extra attention, and fullyappreciate the sense of urgency. At BDP, we want to be sure that in our daily interactionwith customers that we are able to identify and service their special needs, perhaps evenanticipate those needs, before they tell us they actually have that need. Our HazMatexpertise is helpful, too.”

Blount explained that a “normal” shipment can suddenly become a candidate forexpedited service because of changing circumstances. For example, a customer might missa cut-off with a forwarder or integrator and they may elect to utilize a commercial flight,usually the next flight out—if not, it’s not going to get there overnight. Then there is“frustrated” freight, which is freight that has moved but for some reason has becomedetained. Anyone who has traveled by air with any regularity knows this story all too well:delays happen. Perhaps cargo had to be offloaded due to mechanical problem with theplane or the plane had to land at an alternate airport. “If the plane is going from LosAngeles to Seattle and cannot land due to weather, it could be forced to land in Portland,Oregon. “That is a good four- hour drive by truck back to Seattle,” Blount explained. ”Thefrustrated cargo may be recovered and loaded onto a dedicated truck and moved directlyto the final destination if the circumstances surrounding the shipment warrant theheightened service. In the world of expedited shipments, there is no room for error.Performance is king and everyday is the Superbowl in the world of expedited!”

For more information on expedited shipment services, contact Kathy Blount, Global AirFreight Product Executive, at kblount@bdpnet.com, or (310) 259-9988.

www.bdpinternational.com7

When it comes to RFID compliance with Wal-Mart, suppliers have donelittle more than slap the tags on their cases and pallets, receiving littleor no useful data in turn, according to a recent article in CIO magazine.It seems that many companies have not invested in the technology,let alone apply it to processes that can show payback. Many of thosethat have are asking: “What do we do with the data now?”

A Forrester Research survey of retailers stated that just 24 percentsaid they have identified RFID’s business value. And Aberdeen Group,who surveyed 250 executives, said more than 50 percent ofrespondents claimed the inability to show a value proposition for RFIDwas the single most difficult obstacle in gaining support for thetechnology. However, 60 percent said RFID holds great potential valuefor their companies, and two-thirds said RFID would help them createsignificant competitive differentiation in their business processes.

While value identification may be elusive, so are the necessaryskills to implement RFID. A Computing Technology Industry Associationsurvey of high-tech companies showed that 75 percent said the RFIDtechnology talent pool is insufficient to meet their needs.

RFID – Where do we go from here?

IT’S NOW OR NEVER

By Allan Kline, BDP Risk Manager - Transportation

If you have ever had cargo claims denied becauseyou failed to put an air carrier on notice within 14days of delivery, or were forced to accept a lessthan adequate settlement offer from a carrierbecause you did not hold the damaged cargo forinspection, you are not alone. Economic pressureson carriers and insurance companies are forcingadjusters, and claims administrators to look forevery possible way to avoid paying cargo claims.So it becomes more important than ever to followthe rules.

Rules? Every time cargo is shipped, domestically or

internationally, the movement of that cargo issubject to certain rules. Shippers and Consigneesalike should be familiar with those rules—or termsand conditions of transit—which are usually foundon the back of the bill of lading. In some cases onlya summarized version is found on the bill of lading;for the full details it may be necessary to access thecarrier’s website. If a contract exists thatsupersedes the terms and conditions of the bill oflading, both shipping and receiving personnelshould be made aware of the terms. Understandingthe terms and condition of transit is the first step inprotecting a claim.

Notice of Intent to File a Claim. Virtually everymode of transit requires that, in the event ofdamage or loss, the cargo owner, usually theconsignee, must note any exceptions on the bill oflading or delivery document. But the right to makea claim is not secured by noting the exception onthe delivery documents only; in most cases it isalso necessary to notify the carrier in writing ofany visible damage as soon as possible and withinthe requirements of the terms and conditions oftransit. For example, a claim for damage can bedenied by an air cargo carrier if the written noticeof intent is not made within 14 days of delivery, ifmoving on an IATA standard form Bill of Lading.Miss the deadline by one day and the claim will betime barred.

More Rules. As a claimant you are alsorequired to hold the cargo so that the insurancecompany or carrier representative can inspect thedamaged goods. It is good practice to hold thecargo and the packaging until the claim is settled.However, in practice, this is not always possible.To protect the claim, the carrier and or theinsurance company should be contacted (inwriting) and a date set to inspect the cargo. Inmany cases no inspection will be done, but if thecargo is disposed of without the opportunity toinspect, the claim may be denied.

To Survey or NotThe question of hiring a surveyor is one that is

often asked and is not easily answered. In themajority of claims a survey is requested only if thevalue of the damage or loss is over a certain dollarvalue. The trigger can vary from company tocompany but in many cases it is around $2,000USD. If the cargo is insured, survey is not an issuethat the claimant needs to worry about; theinsurance company will make the decision and payfor the survey.

If the cargo is uninsured, the survey becomes theresponsibility of the party making the claim, and ifone is done the cost is paid by the party that hiredthe surveyor. The survey cost may or may not berecoverable but it should be added to the value ofthe claim—it never hurts to ask.

Formal ClaimsFiling a formal claim is done once the value of

the loss is established. The formal claim must be inwriting, and must provide some specific informationto the carrier, such as the shipping data, adescription of the damage or loss, the value of thegoods damaged or lost, and some documents tosupport the claim such as the bill of lading anddelivery documents, photos or survey report, etc.While there is not a required form for a formalclaim it should always be made in writing, or on thecarrier’s claim form if one is available.

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A quarterly publication for BDP International clientsand trade partners. Send comments, suggestions,plus name/address changes to: Arnie Bornstein, Director Marketing & CorporateCommunications

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Follow up is vitalThe process does not end when the formal claim is filed

because there are other critical deadlines that can invalidatethe claim. In ocean transportation the claimant has oneyear to take legal action against the carrier. If the claim isnot settled and legal action is indicated, suit must be filedwithin one year from the date of delivery or scheduleddelivery. For domestic transportation the time limit to filesuit is two years after the first denial by the carrier.

For more information regarding this topic, BDP RiskManagement is making available, while supplies last, the“Ocean Cargo Claims Handbook.” To obtain your copy sendan email to akline@bdpnet.com. Be sure to include yourname and mailing address.

Protecting your rights to file a cargo claimR I S K M A N A G E M E N T