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    6 Steps to Reduce and Consolidate Your List of Approved Customs Brokers and Freight Forwarders

    Posted by Rachael Sink on Sep 5, 2018 5:15:28 PM
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    You're a trade compliance team of a few, or maybe just one, and you've been tasked with reducing and consolidating the number of Customs brokers and freight forwarders used throughout the company. After all, consistency and compliance are imperative. Once the list of providers is pared down, you will be dispersing the preferred list company-wide.

    Reduce Consolidate Brokers and Forwarders

    Consolidating your broker and forwarder lists may be a controversial change for some people within your company. So, you ask yourself, how am I going to accomplish it and get key stakeholders involved and onboard with the changes that are coming to fruition? You realize that this can be a daunting task because the company and each of its divisions use different brokers and forwarders. So, how will you get everyone on the same page?

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    Step 1. Before you begin, make a list of the priorities and "must haves" relating to your preferred list of providers. You will use this criteria to evaluate your options and compare them against feedback received from the other divisions/internal stakeholders.

    Step 2. Prepare an email to your stakeholders that introduces your objective. In the email, state why you are asking for a list of preferred providers and include the ultimate goal, which is to reduce the number of brokers and forwarders to a manageable number. Explain to your stakeholders how it will benefit each division.

    Step 3. Acknowledge your intentions, clarifying that some staff will need to use new brokers and/or forwarders. Let stakeholders know you intend to collect this data, possibly request additional feedback, and measure the results.

    Assure all participants that the final decision will be based on a foundation of this data. Let them know you value their expertise and need their insight as to the strengths and weaknesses of their ideal, preferred providers. Let them know the best decisions can’t be made without them—because they can’t.

    Step 4. Within two days of the email, send each stakeholder a survey that elicits the pros and cons of each business partner. Ensure that a scoring system is included to assist with the evaluation.

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    Step 5. Prepare your survey using your "must haves" as a basis and include some or all of the examples of key criteria in a broker or forwarder (we've provided examples below). Be sure to include a comment section where each stakeholder is given an opportunity to provide narrative feedback, such as an example of above and beyond performance or epic service failures. 

    There are free online survey tools that are simple to use, familiar to most of your stakeholders, and easy to track. Using these tools, responses can be easily collated to provide a swift turnaround of actionable data.

    Step 6. Be sure to provide a submission deadline to move the process along. Most likely, follow-up with stragglers will be required because there are always a few.

    There are different factors and criteria to consider for Customs brokers versus freight forwarders.

    Examples of Key Factors for Customs Brokers:

    • Solid record of compliance
    • Well-established relationship with CBP
    • Entries processed at all ports of entry or has national permit
    • EDI capabilities
    • Customized IT solutions
    • Customs compliance training available
    • Strong HTS classification acumen
    • Auditing services
    • CTPAT Certified
    • Partner Government Agency expertise
    • Customers are kept well-informed of relevant industry events

    Examples of Key Factors for Freight Forwarders:

    • Do they have the expertise?
    • How long have they been providing this service, and do they have experience in your industry?
    • Do they provide fast turnaround on freight quotes?
    • Are they compliant? Do they follow your inbound routing guide and applicable laws and regulations concerning your goods?
    • Do they have a CTPAT certification?
    • Are they reliable? Is communication timely, delivery on-time, goods received intact, and do they handle problems quickly, informatively, and efficiently?
    • Do they have their own locations overseas? If so, are they managed by US personnel or people familiar with the regulations at origin? Or, do they use a network of international forwarding partners? If it's a network, how long have they had these partnerships?
    • Do they own their own ships, or are they an NVOCC?
    • Can they provide an origin to destination service? Is intermodal transportation available or only air/ocean freight?

    A well-conducted survey aligned with your company’s most compelling needs, and completed by invested stakeholders, will yield meaningful results when you receive the feedback. You will be able to narrow your list of existing providers to the best possible partners for your entire company.

    It's in your best interest to establish your preferred vendor list and distribute it to the people it directly affects sooner rather than later. Working with unknown vendors increases your risks for the seizure of goods, as well as major fines and penalties.

    Topics: International Trade Compliance & Enforcement

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