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Expert Advice on How To Improve 4 Areas of Export Administration
 

IOMA

From the April 2001 edition of Managing Exports

With all the talk of e-marketplaces, B2B commerce, and futuristic logistics software, it's sometimes easy to lose sight of the ABCs. According to ME's recent poll of export pros coast-to-coast, however, it's the "back to basics" approach that often provides the biggest paybacks in terms of tangible results. In our 2001 poll, and for the third year in a row, ME survey respondents name improved accuracy and timeliness of shipping documents and changed or worked more closely with freight forwarders when asked what their most successful strategies for managing export operations and controlling costs over the past year.

Respondents were also asked to share details on how and why their top strategies were successful-including concrete results.

Documentation: Devil Is in the Details

Respondents' comments again and again confirm that accurate and timely export documentation can make an enormous difference in both obvious and unanticipated areas of your export operation. Below, we break down some of those comments into four areas of improved export administration and cost-saving:

  1. Ship and clear customs sooner-plus savings on manufacturing end: "Improving the accuracy and timeliness of shipping documents has allowed parts to ship sooner and clear customs much more quickly," explains the Logistics Manager at an exporter of water-cleaning systems in Idaho with 1,000 employees. "This change has saved $100,000 in tool down-time." On a similar note, the Business Manager at a Pennsylvania manufacturer with 95 employees shares the following: "Improving accuracy and timeliness of our export documentation has eliminated or minimized rework that led to delayed shipping and customer deliveries."

    "Accuracy of shipping documents decreased our processing time and eased border clearance," notes the Director of Transportation at a food supplies firm with 10,000 employees in Pennsylvania. Again, something as simple as getting the paperwork right the first time can add up to significant cost savings: "Country of origin issues caused delays and penalties in customs clearance," explains the Export Regulations Coordinator of a New York electronics company. "We implemented a program to track, label, and document accurately."

  2. Save time, money; free up personnel: "By implementing a more streamlined method of handling export orders, we have made them more routine, saving large quantities of time spent in every department throughout our facility," says the Customer Service Manager of a textile chemicals firm in North Carolina.

    "We improved the accuracy of documents," explains the Export Manager of a home wood-products exporter with a workforce of 80 in Wisconsin. "By knowing what is needed for a ship-mint to go out smoothly, and getting them out fast, we save money by preventing delays, returns, and lost customers." The International Sales Manager at an air logistics service in the Northeast points to another benefit of accurate documentation: "Our collections process improved by implementing a better (and more timely) tracking process for receivables."

  3. Use Internet, e-mail to move documents-serve customers better, faster: The Director of a New Jersey export services company switched from carriers to Internet e-mail to send documents. The time we've saved has added up to significant savings." The Export Manager at a 110-employee tooling manufacturer in Ohio has a similar observation: "We are now using the Internet and e-mails as a primary means of communicating with our customers. This has greatly reduced the days to pay on our invoices, thus requiring less manpower to follow up.
  4. Implement export software, automation solutions: The number of export pros who report introducing export software to their operations shows that the automation trend is far from over. While software providers initially offered either prohibitively expensive high-end solutions or simple CD-ROMS to create basic templates-with nothing in between-now there are a host of cost-effective automation solutions aimed at midlevel exporters. Clearly, more and more export pros are taking advantage of this trend, and reaping significant savings as a result.

    "Use of export documentation software has saved many hours and thousands of dollars," says the International Trade Manager at a Virginia company. "We improved the accuracy and timeliness of our shipping documents with a new computer system, both reducing staff and improving our documentation," notes the Vice President of International Operations at a New Jersey exporter.

    "Automating our export documentation reduced a typical process from 30 minutes to two, on average," explains the Logistics Manager at a California manufacturer of network switches. "We automated the shipping department's generation of export documents and utilized carrier software (which is free), saving many hours per week of manual documentation," says the Logistics Specialist at a California telecom products firm with 2,500 employees.

Picking the Right Freight Forwarder(s)

It doesn't take a rocket scientist to know that not all freight forwarders are the same. The following tips, broken down into three more areas, can help ME readers take advantage of improved administration and cost-savings ideas.

  • Picking your primary partner/provider: For several respondents, cutting the number of forwarders used, down to a couple-or even one-brought significant improvements. "We selected one major freight forwarder with one backup," explains the International Sales Manager at an Illinois food services company with 1,700 workers. "As a result, we consolidated shipments and utilized contracts, and savings came on commitments." "We settled on one forwarder, due to its quick service and ability to handle questions in a timely manner," says the Director of Exports at a 100-employee New York firm.

    It's important to note that every export operation is unique, however. For another export professional, at a Maryland firm with a workforce of 300, the solution was just the opposite: "I increased the number of freight forwarders we use and demanded quotes on transport. This enabled us to better understand the cost comparisons and reduce situations that place us at high loss risk."

  • Shopping for, switching forwarders to negotiate improved services: Again and again, export pros obtained dramatic results simply by taking their business to a better provider. "By switching to another freight forwarder, we saved costs by 75%," says the Import/Export Specialist at a California food service company with 40 employees. "Changing our forwarder led to a reduction in air freight rates resulted in both substantial savings and faster transit times," explains the Import/Export Manager at another California firm.

    "When we changed our freight forwarder we also negotiated better rates and received superior customer service," says the International Logistics Manager at a 400-employee Illinois company that exports coated films and papers. Using competition to your advantage can also bring dividends: "We changed forwarders and renegotiated contracts through a bid process," states the Traffic Administrator at a medical equipment supplier in Missouri with 500 employees.

  • How and when to use-or not use-your forwarder: "We cut out forwarders on certain routine procedures," says the Traffic manager at an 800-employee Pennsylvania exporter. "We now use AESDirect to file our SEDs." Educating employees on where forwarders fit into the overall export process can also bring good results. "We educated shipping and receiving sessions and introductions," explains the Export Compliance Manager at a Texas semiconductor firm with 600 workers. "Researching and utilizing forwarder services has had a great cost impact in the areas of Duty Drawback, TIBs, and competitive shipping costs-all significantly impacting the bottom line," says the Traffic Coordinator at a high-voltage conductor exporter with 30 employees in Massachusetts.

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