Wednesday, 31 July 2013

Customer service anyone?

And my thoughts today turn to Customer Service. It's an overused term (and often misunderstood by those who use it) but it's one of those things you can tell pretty quickly either is (or isn't) there, just by being a customer and experiencing not just whether - but equally importantly how companies deliver their service. It's also something you see mentioned in pretty much every company's sales literature or on their website, but do they really demonstrate that to their customers every day?


I've always had a really customer focused / service mentality, from the early days as an trainee import broker at Immediate Transportation at Manchester Airport. Maybe something that was instilled in me by my old boss, Mr Neil Coleman, the branch manager of Immediate Transportation. He was an "old fashioned" boss, very fair, principled, cared about his staff and set the example on how we treated our customers. This was "company culture" before anyone had even defined it. He also made you breakfast when you arrived, sometimes egg on toast, sometimes hot porridge in winter (very important if you'd just ridden 10 miles in January on your motorbike!). Those days are long gone...!

That customer attitude was developed even further when I went to work for WTC Air Freight (see my earlier posts for more about my early career). They were on another level as far as the customer was concerned because they kept the customer informed on every shipment, and if something went wrong, they didn't sweep it under the carpet and hope it'd solve itself. They got their proverbial hands dirty, chasing up the problem with airlines, shipping lines, transport companies Customs or any other link in the chain which was delaying one of their customer's shipments. Sometimes people on the front line with customer facing roles are afraid to convey bad news to customers, maybe because of a lack of confidence or fear of a bad reaction, but most customers I know want the truth - and straight after that - the plan of action to recover the situation. Pretty reasonable I'd say.

WTC Air Freight also had a "Profit Share" scheme which was shared amomgst all staff and gave out rewards to any member of staff who suggested a better way of doing something which would improve service, save time or save money. Pretty good for 1984. So I was working in a very customer driven organisation and to be honest, it suited me down to the ground, because I knew that if we showed our customers that we cared week in week out, on standard shipments and tricky ones, that they'd remain loyal, and they did. I only left WTC (by default) when we were acqquired by Pittston Group, owner of Burlington Air Express / BAX Global, which has now been acquired itself by Schenker. That was interesting, my first experience of two different company cultures coming together - they weren't massively different - but they were different. I became the Import Air Freight Manager at BAX Global after a few months and I think we did a pretty good job of keeping the WTC customer spirit and customer focused culture alive in the merged company. You can read more on that in the early "CV" blogs.

So when I fast forward to today, we've carried that same customer focused attitude and culture into Straightforward Consultancy and as a result, and when we feel it's needed, we sometimes do extraordinary things for our customers.

That might be calling Australia at 0600 hours to talk to one of our UK customer's suppliers to confirm that a critical shipment was picked up that day (giving us and the customer peace of mind). Or last week, calling a freight forwarder in Chicago at 2200 hours to make sure that when UK business started the next day that we had the information we needed, because as far as I'm concerned, the line I really can't accept from a freight forwarder is "Well, we haven't had a reply email from our Chicago office overnight. They're 6 hours behind so we'll try them again this afternoon"

The way this sounds to the customer is as follows....

"We do care about your business but we've been let down by our Chicago office so it's not our fault so let me send them a 2nd request and I will let you know when I have news. Sorry that your order has now been delayed by another 24 hours but we're really busy and we're doing the best we can for you"

As far as I'm concerned - not really acceptable. I always think a little further than a "shipment". Actually that shipment is an order or orders for my customer's or customers of my client and so I always think, what will the impact to my client be if, tomorrow morning, we have no status update or almost as bad - incomplete info? And you can't turn back the clock. Not having the result or information you need will not only let down the customer but it will probably create extra work trying to figure out a plan B because we've lost 24 hours.

9 times out of 10, there is a good reason why the customer needs that order. It could be a line stoppage, or an end customer which could be jeopardised if the order isnt delivered in time.

We manage the freight / logistics models for quite a few customers here in the UK and you could argue "Well what are we paying the freight forwarder for, if they don't keep us informed or give us priority service when we need it?" The truth is that many freight forwarders are bombarded with information and demands on their time and it's easy for them to forget to follow up on a matter for one customer as they may have 150-200 customers at their branch.

After we've appointed a freight forwarder for our client's import or export freight portfolio, what we're doing is monitoring the service and getting involved when either the customer asks us to OR when we spot something is falling off the radar and it needs some focus. As we speak the freight forwarder's "language", we can talk to them on their level and know what can be achieved. We often act as a cushion, because even if it is the freight forwarder's responsibility to follow something up, it could be that the department is short staffed (sickness/holidays) and even though it may be their responsibility, what counts is that someone takes action, which is where we come in.

For me, customer service is thinking about the events from the customer's perspective and making them feel as though they are your only customer. What that does is build incredible loyalty and a feeling from their side that you're more than just a supplier, you're a stakeholder in their business.

Kind Regards

Andy Cliff


Thursday, 25 July 2013

If you're a UK importer, it'd be a good idea to read this post

Thought I'd drop this one into the blog. If you're a UK importer, you have responsibilities to HMRC as the importer. 99% of UK importers will use a freight forwarder or Customs clearance agent to get their air and ocean shipments cleared through Customs so they can take delivery and either get it into production, or out to their customers - job done!

Just a word of advice. When you use a freight forwarder to carry out the Customs clearance for you, they're (99 times out of a 100) acting as a Direct Representative. So what the heck is that? It means that although they declare the goods to Customs and sign the Customs Entry (C88), you're liable as the importer for the accuracy of the entry.

That means some fundamental things such as:-

1 - Correct tariff classification (which affects the duty rate payable)
2 - Correct value delcaration
3 - Correct currency code
4 - Declaration of marine insurance (dutiable)
5- Declaration of correct freight charges (dutiable)
6 - Correct/appropriate Customs regime (home use/IPR/OPR)
7 - Value delcaration (is the value on suppliers invoice genuine)

There are others too but these are the main ones.

HMRC have issued leaflets to remind customers of their responsibilities in this area (see below photo) however they're not well publicised and the wording inside may be confusing to the average UK importer (who has most likely never completed a Customs entry in their life!).

We carry out Customs Compliance work for many of our import customers so they know they're compliant, they're paying the right amount of duty, the correct tariff codes are being applied for the different products they import and they're taking advantage of any Customs duty reliefs which are available. The other big benefit is the obvious one - peace of mind, it's being managed, if we get a Customs visit, we can show we carry out a compliance process to ensure any errors are picked up and corrected.

This was how we uncovered a £ 26,000 duty overpayment for a Warrington customer earlier this year, importing catering equipment from the US. The mistake went back 7 years but we can only reclaim 3 years worth of overpaid duty (127 Customs entries).

Please let us know if you need any advice regarding compliance as well as any general freight or logistics advice it's what we do (and what we're really good at).

Kind Regards


Tuesday, 23 July 2013

Have you opened your logistics bonnet recently....?

Good afternoon All

I was driving down the motorway today and an interesting thought came to mind which connected the world of logistics to the cars we drive today.

Most people would agree that cars are becoming more and more complex, and even basic servicing is beyond most of us, either for fear of breaking something or for not having the specialist tools or expertise to carry out the job ourselves.

We're therefore pretty resigned to the fact that if we want our car to remain reliable, safe and efficient that we should entrust the work to qualified motor vehicle technicians, who spend every day of their life working on increasingly complex vehicles.

And that's when I had the thought - logistics is a very specialised field too, however many companies never give their logistics model a service, MOT or winter safety check!  In truth, it may work reasonably well from a service perspective and the freight/duty costs are "what they are"...checking freight invoices is not something that many customers feel confident about or enjoy doing, quite understandable given the number of different charges and acronyms used!

So often, their challenge is that even though they know their freight model is not the greatest, they wouldn't know where to start in researching better or more cost effective alternatives, and in many companies, they do not have the resources or expertise to carry out a professional logistics RFQ and selection process.

We generally work with small-medium sized UK importers and exporters who spend £50-£500K per annum on air and ocean freight costs and most of our customers so far had the very same dilemma, quite understandable in small-medium sized companies who have very flat organisational structures and often little in-house expertise.

Their initial concern is that they could not afford to employ consultants on a traditional day rate fee model and so w
e operate on a results based fee model which generates significant freight savings (average 35% across all clients since 2009) and leaves the client with the lion's share of the cost savings and a leaner, more customer focused logistics model.

We carry out the whole process for the customer from an initial assessment onto the RFQ, selection and then implementation, and then managing the new freight model for them to ensure rates are charged as agreed, services are monitored and rates are re-negotiated to ensure their new costs are kept under tight control.

We offer a free no-obligation meeting to importers/exporters in the North West so we can explore what opportunities there may be and we have some excellent testimonials, many of which are quoted on our website and LinkedIn.

So the next time you think that your car needs a service, consider whether your logistics model would benefit from the same expert attention, you'll be glad you did.

Kind Regards

Andy Cliff

Friday, 19 July 2013

Why should you use a logistics consultant ?

Afternoon All

Here's something well worth reading, especially as it is so well put and dispels a lot of the myths/concerns about appointing an external source of expertise.

It's written from a generalist perspective on any consultant, but I think it's particularly relevant to logistics, particularly as regards market knowledge / objective viewpoint / getting the job done.

It's weekend again!

If you're looking to improve your supply chain, you may have considered using the services of a logistics consultant. You might be worried, though, about whether it will be worth the cost or bring any real benefits to your business. Here are some reasons to seriously consider using a consultant.

Product Knowledge

Working with a logistics consultant who has a broad knowledge base and experience working through similar issues to those you are experiencing brings a number of advantages to your team.

You'll probably have received loads of literature from sales people, for example, telling how great their products are, but how can you possibly choose between them? An independent logistics consultant is not selling products and does not get any financial incentives from the products they specify, therefore they can give objective advice.

A project run internally can often get sidetracked by everyday management issues. Bringing in a consultant who can focus on delivering results will ensure that the goals are achieved quicker.

Consultancy does not need to take project ownership away from the management. However, as long as management is clear about its objectives and is able to select, direct and manage the consultants carefully, real added value can be seen.

When Should I Use a Consultant?

All organisations at some time reach a point when they are aware that they could be doing things better or differently. It may be one or several areas of the operations that are not achieving their goal or not functioning as efficiently as they might.

The main reasons for using consultants usually focus around:

o Complexity
o Timescales
o Expertise
o Resources

Efficient Staffing

The issue or problem may be short-term. To manage the change effectively and maximise the benefits will require an intense effort, potentially jeopardising the performance of the rest of the operation. Permanently increasing the headcount to handle a short-term project will increase operating expenses. A consultant can assist in managing the change until the introduction is complete and the operation has stabilized.

Often specialist knowledge exists within the company but a secondment cannot be arranged in the required timeframe. Consultants are ideally suited to providing the skills that are not available from permanent staff.

Decisions which result in a large change or financial commitment from the company will frequently involve consultants to review any analysis before a decision is made. An outsider can ensure that an objective approach and attitude are taken and that all potential alternatives are known and explored. Often the consultant will know of additional alternatives which were not even considered previously. At other times just having the consultant confirm competent and thorough analysis can add additional weight to the business case.

If a project has lost momentum or is not delivering the expected results a consultant can quickly provide the input required to get it back on track.

Working With a Logistics Consultant

The use of consultants is unlikely to bring benefits if you dismiss the consultants' involvement as an expensive distraction from everyday operations. However, if you chose the right consultant or consultancy, clearly define the project objectives, provide the consultants with the information they require and set aside time to review progress and buy into their ideas, the benefits will be seen.


Tuesday, 16 July 2013

Thought for the day - are you one of these?

Good morning All

I thought I'd just share this thought with you.

As you know, we have been trading since late 2009 so we're in our 4th year.

One thing which has benefited our business is that most small-medium sized customers with international supply chains generally have very flat organisational structures, and any investment they're making as we come out of recession is focused on new product development or sales and marketing efforts - and who could blame them?

The problem is that the people who are tasked with selection of freight/logistics providers are often generalists - often a purchasing manager might be responsible for imports and an export sales manager might look after exports. Even if they do have some knowledge, the freight market is pretty fluid, complex and littered with jargon (and regulations, eg Customs) so it's left well alone!

So, it's often the case that :-

1) They are not sure if they could find a better / more competitively priced provider
2) They are short on time and wary/unsure about conducting a review process (or who they would invite to quote if they did)
3) They remain very loyal provided the service is ok (ok can mean mediocre)
4) They are likely to accept modest price increases with some back up evidence from the forwarder
5) They do not realise their responsibilities as importers and this is so important, see below

With 5) 99% of UK importers use a freight forwarder to complete import Customs entries (C88) on their behalf and pay them for the service. The freight forwarder acts as an Direct Representative which means they are acting on your behalf and you are liable for the duties/VAT. It also means that the importer is responsible for any mistakes or classification errors (eg using the incorrect tariff code/duty rate etc or declaring the value incorrectly). We have been asked to help UK importers (and exporters) where errors have been made by the forwarder and Customs have levied fines even though the client believed the freight forwarder/agent was responsible because they had signed the Customs entry (C88).

In every case, we have sorted the problems out, but more importantly, put in place better processes to manage and monitor the accuracy of the declarations made by freight forwarders. In one fairly recent case, HMRC came back one year later almost to the day to check that lessons had been learned. They spent 7 hours at this particular client and awarded us a 100% clean report. So everyone was happy and the client just knows that this area is "covered". Directors of business like to know that sort of thing when they have their helicopter view.

As a result, we now offer Customs expertise and Customs Compliance services as part of our service offering, and most customers do take this up.

I went to a large company yesterday for the first time and it became clear that they had no idea about tariff classifications or Customs compliance. They were also concerned about freight costs, not having a real fix on what they were or whether they were with the right provider and so we're going down next month to do a scoping exercise for them and to put together a package to do a full Logistics Review (using our shared savings model) as well as a health check on the Customs side.

Talking about Customs, it could even be that customers are paying too much Customs duty which we noticed last year for a Warrington customer, we secured a £ 26,000 duty repayment for them covering 127 Customs entries and they're now far more competitive on landed cost per unit.

We also visited a company in Warrington two months ago and they had been using the wrong commodity code / duty rate for 5-6 years and HMRC had investigated them. The result was pretty awful - Customs wanted the underpaid duty back - £ 45,000, and the director told me that could sink their business.

So time to check you have a good compliant process in place, better that you spot the errors before Customs do....

Until the next time.


Thursday, 11 July 2013

Asia - UK FCL (Full Container rates) - Another rate increase planned for August

Good afternoon All

As if an increase of USD 900/20 wasn't enough, most lines are now announcing rate hikes of USD 500/TEU (USD 1000/40 foot container).

Below you can see the news bulletin published in yesterday's IFW however one of the freight forwarders I work with (major multinational forwarder) has sent me an email today and it shows it isn't just Hanjin and Mitsui OSK in the frame, we're talking increases all around USD 500/TEU (how coincidental) from around 10 lines.

Some people might look at this and say "cartel" and you wouldnt blame them for thinking that but what this does mean is that rates are on the way back up and we're not at "peak season" yet so time to take a close look at your current arrangements and ensure you're paying market competitive pricing.

We have a pretty good strategy in place for our Asia inbound FCL traffic and hope you do too - if you're concerned about your rising landed costs, it's a good time to take action.;jsessionid=D1B5756F62CFF741A557824432442F03.49f4d07bb55175180e5453a50ae76331b9143bfd

Tuesday, 9 July 2013

DHL in the news again...!

Morning All

Jaguar Land Rover at Halewood make the Freelander and Evoque models and this is an interesting story for me as I attended a full day USA seminar held by UKTI at JLR in Halewood, near Liverpool last November and we were given a tour round the Evoque production line in the afternoon.

JLR clearly took a huge step in outsourcing 1,000 jobs to DHL, who feed the line with parts and engines etc however this must be a very awkward situation as it's their supplier's staff who can threaten production. You would imagine that they feel a little out of control if DHL are the employer who have this problem on their desk this morning.

Kind Regards

Andy Cliff

Monday, 8 July 2013

Asia - UK FCL (Full Container rates) - General rate increase holds steady after 1 week

Good morning All

I thought I should pass this market information on to you.

If you saw my last post, you saw that the GRI (General Rate Increase) of July 1st, which had been publicised by most lines at USD 1000/TEU (USD 1000/20 foot or USD 2000/40 foot) hit the market last weekend at just under USD 900/TEU, however it's always wise to see what happens in the first 2-3 weeks following the increase as it often settles (or collapses completely).

There are many factors which affect ths, the most important two being :-

1) container volumes compared with available space (are the ships operating near capacity or not), the old supply/demand equation

2) The time of year. Historically, peak season from Asia is from August-November and then another small peak as we run towards Chinese New Year when factories close for the week and there's a bulge in demand as Chinese shippers try to fulful orders before the shut down.

Last year, the huge rate increases came in in March and should, based on timing, have failed as they were in the weakest part of the Asia-Europe cycle (after Chinese New Year and before peak season in August) but somehow the increases stuck (maybe because the rates were so low and lines held firm on the March-12 increases).

So, fast forward to today, the GRI has weakened slightly, but only by USD 50/TEU, so the spot rate from Shanghai is now around USD 1350/TEU, having dropped as low as USD 550/TEU in mid-June.

If you have regular volumes, you really need to find out what rates you are paying in July (what increase has your forwarder passed on to you). We have relationships with around 7-8 forwarders and know the market so we aren't taking a GRI anywhere near the market rate but I suppose that's down to experience and knowing the right forwarders to work with.

Another thing to think about, the USD is strengthening again, it was below USD 1.49 this morning so if you're importing, especially from Asia your landed costs have just spiked but you could be paying a lot more than you need to. You know where we are!

Kind Regards

Andy Cliff

Thursday, 4 July 2013

Incoterms 2010 / Terms of sale - insight into the basics (part 2)

In my last blog, I gave a general overview of Incoterms and how important they are when dealing with your overseas suppliers and your export customers.

From an international transportation perspective, they clearly set out who is responsible for the freight costs - this could be all, part or none at all. Crucially, they also define the point at which risk (not title to the goods or/ownership) passes from seller to buyer and knowing this allows the exporter or importer to decide whether to arrange their own marine insurance. I should add that the term marine insurance is used whether the goods travel by ocean or air.

If you import from the USA for example, it's highly likely that they will want to sell to you on Incoterms 2010 Ex Works (EXW). This means that you have to arrange a freight forwarder to collect the goods when ready and the risk is yours from the moment the freight forwarder (or integrator, DHL/UPS etc) collect the shipment from your supplier.

The only exception to this in my experience is in large multi-nationals or when a parent company is selling to a sister company where they may "prepay" the freight charges but this is usually only to arrival at the destination airport or sea port.

However US companies, for whatever reason don't seem to quote incoterms or talk in that language, they're more likely to use hybrid trade terms like Ex Factory (in place of Ex Works) or even more confusingly, they will use the term FOB Factory (which really means Ex Works!). They also use terms like "Freight Prepaid" on their invoices or sometimes "Door to Door".

This is a real area of concern as you really need to clearly agree the Incoterms as when they start using terms like Freight Prepaid, this is vague and without Incoterms, you can't be sure how much of the freight they're paying for (is it to the door, to the port or somewhere inbetween?). You also don't know when the risk transfers to you.

I would always recommend that if you import from the US, you work on Ex Works Incoterms as you are able to control both the service level you receive and of course the costs, provided you know what the market rates are and which providers would be a good match for your needs. This is our area of expertise and we often review clients freight models and clean up grey areas such as Incoterms as well as reducing freight costs and enhancing service levels and communication.

More next time..

Wednesday, 3 July 2013

Undercover boss - DHL Express - Phil Couchman

Good morning All

Just in case you missed this amongst the huge amount of TV which comes our way these days, the last episode of Undercover Boss by Channel 4 was a great insight into the DHL Express UK business, looking at many areas including their customer service centre in East Midlands, their hub in the same location and their delivery drivers in two regions, Stoke on Trent and central London. It showed one thing for sure, and this doesnt just apply to DHL. The people at the sharp end often feel constrained by rules and KPIs and often don't feel appreciated or listened to. And most importantly, their senior managers don't often join them in the engine room for a perspective on how the business is going and what they need to change to avoid losing their edge.

Clearly a huge operation and striving to keep it customer focused and taking care of their human resources, their greatest asset.

A pretty brave move for their CEO, Phil Couchman to make, revealing warts and all as it were. Hats off to him I say.

Kind Regards

Andy Cliff

Monday, 1 July 2013

Asia - UK FCL (Full Container rates) - Massive increase hits market

Good afternoon All

The planned General Rate Increase (GRI) effective July 1st (today) has hit the market and has resulted in rates almost tripling based on market spot rates available in June.

We advised our clients to ship as much product as possible in the month of June which was, it turns out good advice, as the increase is actually USD 895/TEU (USD 895/20 foot container), almost 90% of the published increase. We've already said that we believe the increase will lessen as we run through July but you really need to keep a close eye on this.

The key thing now is not to panic, but first of all, to ascertain:-

1) What rates were you being charged in June (prior to increase)

2) Has your forwarder advised you of the increase and how much?

3) What is your plan to manage / control inbound freight costs for the remainder of 2013 - we're now entering traditional peak season (say Aug through to Chinese New Year) and lines will continue to keep the pressure up on rates to increase their revenues/margins.

If you need any help, you know where to come.

Kind Regards

Andy Cliff