Mastering Import & Export Management

MASTERING IMPORT & EXPORT MANAGEMENT SECOND EDITION This page intentionally left blank MASTERING IMPORT & EXPORT MANAGEMENT SECOND EDITION Thomas A. Cook with Rennie Alston and Kelly Raia • Major Issues in Global Supply Chain Management • Main Features of the Incoterms᭨ 2010 • New TSA Regulations • Documents, Operations, & Procedures • Risk Assessment & Mitigation • Import & Export Management Tools American Management Association New York • Atlanta • Brussels • Chicago • Mexico City • San Francisco Shanghai • Tokyo • Toronto • Washington, D. C. Bulk discounts available. For details visit: www.amacombooks.org/go/specialsales Or contact special sales: Phone: 800-250-5308 Email: [email protected] View all the AMACOM titles at: www.amacombooks.org This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Library of Congress Cataloging-in-Publication Data Cook, Thomas A. Mastering import & export management / Thomas A. Cook with Rennie Alston and Kelly Raia.— 2nd ed. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-8144-2026-3 ISBN-10: 0-8144-2026-5 1. Exports—Management. 2. Export controls. 3. Foreign trade promotion. 4. Imports— Management. 5. International trade. 6. Exports—United States—Management. 7. Export controls—United States. 8. Foreign trade promotion—United States. 9. Imports—United States— Management. I. Alston, Rennie. II. Raia, Kelly. III. Title. IV.Title: Mastering import and export management. HF1414.4.C665 2012 658.8Ј4—dc23 2011035514 ᭧ 2012 Thomas A. Cook. All rights reserved. Printed in the United States of America. This publication may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of AMACOM, a division of American Management Association, 1601 Broadway, New York, NY 10019 American Management Association (www.amanet.org) is a world leader in talent development, advancing the skills of individuals to drive business success. Our mission is to support the goals of individuals and organizations through a complete range of products and services, including classroom and virtual seminars, webcasts, webinars, podcasts, conferences, corporate and government solutions, business books and research. AMA’s approach to improving performance combines experiential learning—learning through doing—with opportunities for ongoing professional growth at every step of one’s career journey. Printing number 10987654321 Contents 1 Major Issues in Global Supply Chain Management Today 1 Section One: The Global Supply Chain 37 2 Purchasing Management Skill Sets in Foreign Markets 39 3 Freight, Logistics, and Specialized Transportation Issues for Import/Export Managers 47 4 Risk Management in International Business 102 5 Technology in Global Trade 132 6 Global Personnel Deployment and Structure 146 7 Developing Resources in the Import/Export Supply Chain Management 155 8 Essential Overview of Import/Export Compliance and Security Management: Post 9/11 169 Section Two: Export Operations 185 9 Export Issues 187 10 Export Management: Incoterms, Documentation, Compliance, Operations, and Export Supply Chain Skill Sets 200 Section Three: Import Operations 233 11 Future Import Issues 235 12 The Import Supply Chain: Purchasing, Operations, Documentation, and Compliance Management 252 v AmericanManagememtAssociation•www.amanet.org vi Contents 13 Import Strategies in Maintaining a ‘‘Compliant and Secure’’ Inbound Supply Chain 268 14 Bureau of Customs and Border Protection: Compliance and Security Expectations: Post 9/11 275 15 Getting on Top of the Regulatory Challenges of the Future 280 16 Concluding Remarks 286 Appendix 289 Index 665 American Managememt Association • www.amanet.org MASTERING IMPORT & EXPORT MANAGEMENT SECOND EDITION This page intentionally left blank 1 Major Issues in Global Supply Chain Management Today The book opens with a view of current world events that impact global supply chains, import and export operations, and the entire responsibilities that business executives have in trade compliance management. 2011 and into 2012 have seen a number of shifts in world politics, Middle East stability, and major physical occurrences that have huge short-term impacts on global trade, and these impacts may extend into the future for years to come. Overview Physical Events The earthquake in Japan has rocked the world in a number of ways. Perhaps most important, the long-term utilization of nuclear power is very much in jeopardy. The impact of the devastating tsunami that followed goes far beyond the tragic loss of life that occurred. The insurance community who insured the risks involved with both events will have to pay hundreds of million in claims, potentially in excess of several billion dollars. This will impact insurance costs and the availability of certain types of insurances in risk-prone centers of the globe as well as for freight that moves on certain trade lanes. Cost and availability will become major issues. Personnel involved in international shipping and logistics who had freight coming in and out of Japan are witnessing great delays in transit times, limited access to transportation infrastructure, and increases in freight charges. Shipping managers worldwide have looked at this disaster in Japan and have already begun to access risk management alternatives not only in earthquake- prone areas, but in all corners of the globe where there are significant physical risks such as but not limited to: • Earthquakes • Floods • Tornadoes • Hurricanes • Harsh changes from winter to summer weather patterns • Tsunamis 1 AmericanManagememtAssociation•www.amanet.org 2 Mastering Import & Export Management, Second Edition These are but a few of the major physical exposures that companies who oper- ate globally are now assessing, and they are reevaluating their supply chain deci- sions to avoid exposure and mitigate risk. Economic Events As of this writing, most professional assessments and benchmarks in world trade have shown a betterment in most market segments in the overall economy. Most manufacturing, inventory, and trade indexes have shown increases of 3 to 6 per- cent in 2011 into 2012. While most sectors have shown improvement, there is still serious concern over the following areas: • Stability of global banking and financial infrastructure. • Housing and unemployment in the United States. • Political instability in the Middle East. • Financial issues in an array of countries, such as but not limited to Greece, Poland, Brazil, Venezuela, and the United States. • The rise in government bailouts and increase in debt worldwide. All of this impacts global supply chains. It impacts cost, risk, and choice of global sourcing and offshore manufacturing, and it potentially retards the growth of globalization. A good example of this in the United States is shown by the number of companies who had sent manufacturing overseas to Asia and the Near East but have moved some or all of it back here to America or to Mexico or Canada (referred to as ‘‘near-shoring’’). Near-shoring makes a huge statement to the world. It says that from a competi- tive standpoint there may be better places to locate operations than Asia and the Near East (primarily India and Pakistan)—reversing a major trend of the past thirty years. In logistics, these economic woes have reduced capacity in the ocean freight market, causing pricing instability and difficulties in locating available containers and chassis for timely, reliable, and consistent bookings. Companies relying on the ocean freight mode to fulfill a time-sensitive supply chain have been hugely disappointed in 2011 and have had to make major com- promises in risk, cost, and choice of carriers. Political Instability The events in the Middle East—in Tunisia, Libya, Egypt, and Bahrain to name a few—have rocked the traditional world of dictatorship and kingdoms in terms of historic attitudes in the Muslim community in that part of the globe. The West, led by the United States, has taken a fairly aggressive role in supporting the move to democratic governments, including military action. There are costs to supporting these uprisings that add to the economic turmoil, tied into the instability which has caused the price of crude oil to climb in excess of $100.00 US. This will impact every aspect of the supply chain cost models, from manufacturing, to plastics, freight, and security surcharges due to gasoline increases. American Managememt Association • www.amanet.org Major Issues in Global Supply Chain Management Today 3 The threat of an increase in terrorism promised from the more radical corners of that circle will place additional stresses on security and oil costs. Many security analysts also see the West’s proactive engagement in these Mus- lim democratic turnovers as another reason for terrorists to mount more aggressive and frequent attacks, which will include exposure for global supply chains. The continued presence of the United States and its allies in Iraq and Afghani- stan has also increased political stress among the West and the Muslim countries. These stresses impact politics—here and in those

Load more