Drop Trailer Services: What’s In It For You?


Drop Trailer Services - What's In It For You?

Is it time for you to consider a drop trailer or drop and hook freight service for your business?

Capacity crunch and driver shortage has caused serious issues in many businesses’ supply chains and has increased the demand for drop trailer / drop and hook shipping programs.

What is a drop trailer program?

A drop trailer program is when a carrier brings a tractor to the loading dock and picks up a trailer loaded previously. Drop-and-hook takes the process of trailer shipping one step further. A carrier will arrive with an empty trailer to drop, pick up a loaded trailer, and continue on.

In the US, many shippers are now considering such programs mainly because of the new hours of service rules issued by the Federal Motor Carrier Safety Administration (FMCSA) which are more strictly monitored by the ELD mandate.

Drop trailer services can also have a significant impact on the efficiency of your supply chain. Drop trailer programs help shippers and carriers plan more effectively for deliveries and outbound shipments as it’s important for them to align their schedules.

Without drop trailers, a carrier must arrive within a narrow time window to load or unload the trailer. Depending on how the appointment coordinates with their on-duty schedule, and considering other conditions such as traffic, weather, breakdowns or unexpected events, the driver may be forced to wait for hours, thus missing the appointment altogether.

In these situations, detention fees, late delivery fees, and a negative vendor scorecard are unpleasant results.

Drop Trailer Benefits for Carriers:

  • Better trailer planning. You decide when you pick up and drop off.
  • No more waiting to pick up a load or be live-loaded.
  • Great for time-consuming loads, like floor-loaded freight.
  • Higher delivery percentages that are on time.

Drop Trailer Benefits for Shippers:

  • A smoother supply chain operation. You can load or unload a trailer at your convenience or when staffing levels are adequate; no more paying overtime to load or unload when a truck is early or late.
  • Superior for time-consuming loads.
  • Avoid extra driver or truck detention charges.
  • Higher on-time delivery percentages.
  • Decrease fines from strict retail Must Arrive By Date (MABD) requirements.
  • Better retailer relationships with vendor scorecard performance.

On the downside, there may be an initial cost to implement a program. Every trailer that a carrier takes out of over-the-road service is lost revenue, so to recoup it, there will be a cost for a drop trailer. Of course, this cost will pay for itself because there should never be any detention fees.

Drop trailers should not become warehouses; the maximum time a trailer should sit is a week. In most drop trailer programs, trailers turn two or three times a week.

Final Thoughts

There’s a lot of up-front heavy lifting to implement a drop trailer program. Not all carriers supply a drop trailer service therefor finding one that does can be time-consuming. Trailers make carriers money, if one of your carriers doesn’t want to drop a trailer, simply look at using a different one.

International Food Safety: What Are We Doing to Stay In Step?


International Food Safety

Do the FPC and FSMA have effective plans in place to prevent potential cross-border food hazards?

“The most sweeping reform of U.S. food safety laws in more than 70 years.” implemented on Jan 4, 2011, was the result of a development program launched by the FDA under the Food Safety and Modernization Act (FSMA).

Recognizing the need for information regarding new regulatory requirements, the Food Processors of Canada (FPC) held an information session for its members on the impacts of the Preventive Control Rule. The well attended session of 50 participants represented a wide variety of Canadian food manufacturers.

Dr. David Acheson (former assistant commissioner for Food at the USFDA), and Cameron Prince (former vice-president of the Canadian Food Inspection Agency) of The Acheson Group, were invited by the FPC to provide background on FSMA.

The purpose was to highlight the main impacts of the Preventive Control Rule on Canadian food producers exporting to the U.S.

Some key points that came out of the session:

HACCP+

FSMA focuses on preventing, rather than being reactionary, to issues that can cause food-borne illness. The safety schedules apply to firms that manufacture, process, pack or hold food for humans.

These businesses are required to have written plans that identify hazards, specify the steps they’ve put in place to prevent or minimize or those hazards. In addition, they must clearly identify monitoring procedures and record monitoring results, plus specify actions to be taken to correct problems that arise.

When compared to similar HACCP and GFSI programs, there are differences in the new FSMA Preventive Controls Rule that will require companies to re-evaluate and adjust their programs.

With the Preventive Control approach, hazards related to the process, and to plant operation, are controlled under a prerequisite program that now requires the same level of diligence in:

  • Documentation
  • Monitoring
  • Record keeping
  • Corrective actions as a CCP under HACCP

The Preventive Control approach is portrayed as “HACCP+” in which Prerequisite Programs are identified as Preventive Controls requiring the same level of control as a CCP such as:

  • Cleaning and Sanitation
  • Allergen Control
  • Recall

Products That Are “Ready-to-Eat”

Processors of Ready-to-Eat (RTE) products exporting to the U.S. may are required to implement an environmental pathogen monitoring program.

If the RTE product is open to the environment after processing and before packaging, and a kill step does not follow the packaging step, an environmental pathogen monitoring program is required.

Foreign Suppliers Verification

U.S. importers must also comply with the Foreign Suppliers Verification Rule, which means U.S. importers need to verify that Canadian Suppliers are in compliance with all U.S. Rules for FDA commodities. The verification could include an audit by the U.S. importer or a third party representing the U.S. importer.

Qualified Personnel

A qualified individual is required to develop, implement, and monitor the Preventive Controls Program by the Preventative Control Rule.

This individual is known as a Preventive Controls Qualified Individual (PCQI). Although experienced food safety managers can qualify for this position, it is strongly recommended that companies have a certified PCQI on staff.

In most cases this means a QA manager will be required to take a two-and-a-half day certified training program.

What is the Future of Third Party Logistics in 2020?


The Future of Third Party Logistics in 2020

What Can Your Business Expect from 3PL Providers in the Ever-Evolving Digital Age?

There’s no doubt the third party logistics (3PL) landscape has altered significantly within the last decade. As mobile technologies and ‘smart’ working practices continue to develop, further growth, and potential benefits, are inevitable.

With expected growth in third party logistics markets forecast to be as high as 15 percent, the demand to service in these markets in 2020 is sure to generate fierce competition.

A greater consumer demand for 24/7 services and reduced costs means efficiency and accuracy are going to be a crucial points for successful 3PL providers. Businesses will remain focused on the goal to drive down their own operational and labor costs by outsourcing logistics to 3PL service providers. But success will also depend on their willingness to adopt new technologies.

The following are the most influential changes predicted within the next 7 years. There’s a very good likelihood they will become common among most third party logistics companies.

1. Extended Collaboration Between Shippers and 3PL Companies

Third party logistics companies will rely heavily on technology to collaborate, connect, and interact with customers. Electronic data exchange services are going to be critical, not just for the performance and integrity of the info, but also to accommodate the speed of change.

Vendor managed inventory, where the supply chain vendor monitors the buyers inventory and makes periodic resupply decisions, are going to be commonplace and allow smaller 3PL services to operate via web-based portals and user-friendly access systems.

2. Mobile Application Expansion

Dependency on paper records in warehouses is becoming a continually diminishing memory. Everything will be focused around agility through mobility. As we’re already seeing, mobile devices are becoming more commonplace and will eventually be used by all third party logistics firms.

With the potential for RFID enabled devices to carry data information with them, product and providence for identification and traceability become easier. Customers are going to be ready to order and process freight shipments anytime, anywhere, 24/7.

3. Dedicated Smart Technology from Third Party Logistics

Third party logistics providers will see the advantages of investing in smarter IT and software systems which may deliver a quick and solid ROI.

By decreasing inefficiencies, software like Transportation Management Systems (TMS), will drive down costs and save time. As voice recognition becomes more accurate, voice prompts and commands are going to be standard within the supply chain process, like stock inquiries or freight tracking.

Improved speech recognition software also will allow workers to speak directly with their Warehouse Management System (WMS) to enhance stock records, speed up order turnarounds and shorten staff training periods.

4. Leveraging Massive Data and Knowledge Sharing

Cloud-based technologies are going to be employed by the bulk of third party logistics companies as they embrace the new age of ‘Big Data’.

3PLs will recognize the necessity to permit client access to their own systems to enhance efficiency in areas linked to seasonal trends, and therefore accommodate the demands of flexible operations. Shared data will also allow the traceability of an item at any given point within the supply chain.

5. A More Globalized Economy

In 2020, an increasingly globalized economy is going to be more integrated. 3PL providers are going to be expected to figure on a bigger scale with a distinctly international outlook.

Distribution will also expand globally with more opportunities opening up. This will create a more complex supply chain, varied costs, increased integration processes, and thus a rise in expert third party logistics.

The 3PL industry will face many challenges within the future, but by 2020 the world will also have grown dramatically, largely due to the expansion of emerging global markets.

As we’ve seen with the meteoric rise of technology itself, change can happen swiftly. We will see more and more mergers & acquisitions over the approaching 7 years within the third party logistics world.

With such a competitive landscape, we will also see more standardization in the expectations of shippers and supply chain managers. The foundational businesses, those that actually start the wheels turning, will experience the end benefits.

At Brimich Logistics, we strive to stay on the most productive cutting edge of 3PL technologies in order to serve you better.

What Makes a Warehouse Food Grade?


What Makes a Warehouse Food Grade?

If You Value the Quality of the Food Products You Supply, Isn’t Your Warehouse Partner Just as Valuable?

Storage is an integral part of food supply chains between the producer, processor, retailer, and consumer. Warehouses that store food products must meet extensive requirements and undergo continuous evaluation. If a facility doesn’t meet regulatory standards, they must discontinue operation.

There are several types of food-grade warehouses. Dry storage, frozen food storage, and refrigerated storage are the most common types and the most likely options for food warehousing.

Dry storage warehouses are suitable for food products that do not require temperature regulation. These products include canned food, rice, and grain. Frozen food storage warehouses have facilities to maintain a constant freezing temperature to handle perishable food products.

A refrigerated warehouse has all the necessary equipment to store food products below a specific temperature without freezing it.

Health and Sanitation Issues

Health and sanitation are crucial in food storage. If a warehouse doesn’t manage cleanliness carefully, it can result in food contamination by bacterial growth, fungi, rodents, or other pests.

Indications that a warehouse’s sanitation is compromised include:

  • Rodent tracks or burrows in- or around the warehouse
  • Standing water, weeds, or trash in the vicinity of the warehouse
  • Leaks in the warehouse’s roof, foundation, or walls
  • Holes in the warehouse windows
  • Signs of damage to the warehouse building’s exterior

Cross Contamination

In addition to the issues listed above, the odour from other products in the warehouse can result in cross-contamination. Food product packaging can absorb odours from other products in the warehouse. When storing a new food item, the warehouse should consider the other products in the warehouse.

Customers who are selecting their 3PL should also consider the products that a warehouse stores as many facilities don’t pay attention to products that can result in cross-contamination.

Four Principles for Food Grade Storage

Pest Control

Substances for pest control at strategic locations around food grade storage perimeter eliminates the presence of rodents, insects, birds, and other animals. A warehouse should inspect the perimeter at least once every quarter to check for infestations.

Master Sanitation Schedule

The warehouse should schedule and document regular cleaning sessions to ensure that the food-grade facility is sterile from the roof to the floor. Records of cleaning sessions should be readily available. The warehouse should either appoint a skilled cleaning staff or hire an industrial sanitation service provider.

Personal Hygiene and Training Program

All the employees who work in a food-grade warehouse should regularly wash their hands at company-supplied stations with soap and hygienic hand-drying devices. Employees should also undergo training in personal hygiene, food safety, incident and crisis management, and quality awareness. The warehouse must keep a record of all employee training sessions.

Lot Traceability

The warehouse’s food-grade logistics operation unit traces lot and date codes on the products to ensure that the warehouse rotates them on a first-in, first-out (FIFO) basis.

Conclusion

The four principles above are central to the operations of a food-grade warehouse. Contact Brimich Logistics to learn more about our 3PL warehousing solutions and value-added services.

What is Co-Packing?


What is Co-Packing?

Contract Packaging Just May Be The Ticket To Growing Your Business

When people hear the term co-packing, also known as contract packaging, there are two questions they ask. “What is co-packing, and how does it work?”

This is an arrangement whereby a firm (let’s call them firm A) allows another firm (firm B) to handle the packaging of its products. Let’s look at co-packing agreements in depth.

How does co-packing work?

What is a co-pack agreement? Co-packing is an agreement between a firm A and its co-packer, firm B. It allows firm B to handle all the packaging processes for firm A.

This contract allows firm A to focus on its specialty, which is production, and firm B focuses on the packaging, branding, and logistics. The two companies have to come to a formal co-packing agreement which outlines the nature of their relationship.

Why do firms opt for co-packing?

There are many reasons why your firm might want to consider co-packing as a way of streamlining its business operations, including:

  1. Cost – For most firms that opt to enter into a co-packing agreement, cost is the main driving factor. Instead of firm A establishing a packaging unit, these costs can be saved by outsourcing the services of a co-packer.
  2. Technology – Co-packers invest a lot of resources in technology that helps to make the packing exercise smooth and time efficient. Many companies lack this technology, so it is necessary to seek a partnership with a co-packer.
  3. Spike in demand – A co packer’s services can come in handy if a company is experiencing a spike in demand for its products. This sudden increase may mean the company is unable to meet the packaging requirements at its facility, so they need to enter into an agreement with a co-packer.
  4. Specialization – Specialization is a core principle of economics and running a business. Companies that choose to specialize in one specific task might find the services of a co-packer to be necessary. This may inform their choice to enter into a co-packing agreement.

Which industries can co-packing serve?

Co-packing, as has been established, focuses on the packaging and branding of products given to them with permission from another company. The services of a co-packer can cut across many industries.

With the question of what co-packing is and how it works answered, the following list of industries stand to benefit most from agreements with a co-packer.

  • Cosmetics – The cosmetic industry is one that relies heavily on the right packaging to make a dent in the market. The services of a co-packer can help a firm in this industry to transform into a market leader.
  • Pharmaceuticals – Many times, medicine isn’t packed by its manufacturing firm. Co-packing is a crucial aspect of collaboration in this industry.
  • Beverages – Bottling companies are a must have for the beverage industry. Without them, it would present a challenge for a company to distribute its products.

Is Co-packing Right for You?

The answer to this question will be based on two things; what you produce and in what quantity. This is what determines whether your firm needs a co-packer.

Types of Managed Inventory – Part 2


Types of Managed Inventory – Part 2

Who Do You Trust to Manage Your Products Within The Supply Chain?

Transit Inventory

Transit inventory consists of goods that are still in transit between companies. When a transaction involves the shipping of large quantities, it can take days or even weeks to occur.

Transit inventory can also result in accounting and ownership issues for companies that don’t track shipments between locations.

Large firms use the services of freight consolidators to combine inventories from several locations into one shipping source to establish economies of scale and reduce the input cost per unit. Consolidating shipments increases the size of transit inventory as well as the transit time.

Buffer Inventory

Some firms find themselves in volatile conditions, uncertainty in terms of product quality and delivery times from suppliers, and fluctuating demand.

To protect themselves against these conditions, companies keep buffer or safety inventory, which is stock at hand that exceeds demand.

When a firm runs out of existing inventory, it doesn’t have to backorder items, and as it can source them from buffer inventory.

Customer service is a crucial motivator to hold buffer inventory, as the firm is less likely to run out of stock and make the customer wait for the next order cycle. Buffer stock also mitigates the risk of customers switching to another supplier for their orders.

Anticipation Inventory

Anticipation inventory is stock that firms purchase in addition to their current need when they anticipate an increase in demand.

When there are anticipated events like seasonal increases in demand or labor strikes, firms ramp up their orders or production to be able to meet all orders.

Retailers typically stock anticipation inventory before demand increase for, for example, Christmas or the back-to-school season.

Manufacturers also maintain or increase production when demand is low, so they have stock available when demand rises again.

Producing anticipation inventory also eliminates the need to employ additional means of production in reaction to a demand increase.

MRO Goods Inventory

MRO goods are the maintenance, repair, and operating supplies that support production processes. Firms consume MRO goods during production, but they don’t form part of the finished product as raw materials or work-in-process inventory.

Examples of MRO goods include:

  • Fuel, oils, lubricants, and coolants
  • Janitorial supplies, protective clothing, and uniforms
  • Packing materials and storage products
  • Tools, screws, nuts, and bolts

Secondary supplies to support the production infrastructure can also fall under MRO goods, for example, stationery, paper, and toner.

Theoretical Inventory

Theoretical inventory is the average inventory at a given throughput while assuming an ideal situation where is inflow, processing, and outflow rates are equal. In other words, no work-in-process item has to wait for processing.

Firms determine theoretical inventory to calculate the minimum amount of stock that is necessary to maintain the given process throughput.

Theoretical inventory = Throughput x Theoretical Flow Time. Theoretical time includes the sum of all processing times for one unit and doesn’t include wait times.

Work-in-process inventory is equal to theoretical inventory when the actual process flow time is equal to theoretical flow time.

In case you missed it, check out Part 1 of this article here >>

Types of Managed Inventory – Part 1


Types of Managed Inventory – Part 1

What Can Be Measured Can Be Controlled – for Profit!

Most businesses that supply products carry inventory, which is a stock or store of goods. A company manages its inventory and keeps it at hand so it can meet demands or carry out its daily operations.

The types of managed inventory that a business has depends on the industry. For example, retailers have finished products in stock, and manufacturers use raw materials or work-in-process.

An organization must manage its inventory carefully to ensure that it can fulfill its reason for existence, especially in volatile conditions with fluctuating demand.

In this section, we’re looking at the different types of managed inventory.

Raw Materials

Raw materials are a type of managed inventory that manufacturers use in the production of product components, subassemblies, or finished products.

Raw materials typically consist of commodities, extracted products, elements, or objects that the firm extracted or purchased.

Commodities that organizations implement in their production process as raw materials include things like minerals, ore, wood, steel, and chemicals.

Raw materials can also be finished products like nuts, bolts, wheels, and engines if the firm purchased the inventory to produce components.

Work-in-process

Work-in-process is a type of managed inventory that:

  • Is not a raw material,
  • Is a component of a parent,
  • Is processed or about to be processed in the production system

Work-in-process inventory includes materials, components, subassemblies, assemblies released for initial processing.

This inventory can also be fully processed materials that are awaiting inspection before inclusion in finished products.

Finished Goods

Finished goods are completed products that underwent and passed final inspection and that are ready for order by wholesalers, retailers, or final users. This type of inventory does not have a parent in the production process.

However, the end-user may purchase a single unit to use as a component in another product, for example, car engines that are manufactured as finished goods and sold to wholesalers.

Decoupling Inventory

The machines in a production facility typically don’t have the same output rate. One station can take longer to process parts as the one before it in the production process.

Additionally, some machines may be removed from the production line for repairs or maintenance.

When looking at a functioning line, however, it may appear as if all the machines have a corresponding output and that the production process is flowing smoothly.

Production flows because of decoupling inventory or safety stock that ensures an indirect feed between devices and acts as shock absorbers in a production line.

Decoupling inventory prevents inventory from piling up at slow-moving stations in the production process, eliminating bottlenecks that can affect other stages in the process.

Cycle Inventory

Ordering or producing large quantities, the ordering cost per unit decreases. However, ordering large quantities can increase carrying and holding costs.

Economic order quantity is a concept that businesses follow to balance carrying and holding costs with the costs related to orders or production.

When the costs related to holding and carrying costs are equal, the total cost per unit is at its lowest. Cycle inventory is the excess stock that the business order to achieve this minimization point.

Continue to the second part of this series: Types of Managed Inventory Part 2

What Is EDI and How Is It Used?


What Is EDI and How Is It Used?

Is Your Current Warehousing Provider Utilizing the Latest Electronic Data Technology?

Electronic Data Interchange (EDI) refers to a means by which businesses replace paperwork and the sharing of physical documents with the use of electronic documents.

The use of this technology has found its way into the logistics industry. Let’s look at how this solution is used in logistics and its benefits.

What are the standards of EDI?

EDI standards is a broad term used by software developers to describe templates used in EDI. These are standard across all platforms on which they are to be used or, if not, can easily be suited to the businesses that use them. EDI standards are necessary if business communication is to be effective, especially for logistics companies.

What are the types of EDI?

There are several types of EDI that a logistics company can work with. The following is a list of some of the most common EDIs.

  • Direct EDI – Also known as point-to-point EDI, this is a prominent EDI that allows a business to deal with each of its partners as separate individuals. This is very beneficial for a business that partners with several logistics companies or a logistics company that partners with many businesses. Each business can book work, manage its account, and send invoices without interfering with another business on the same platform.
  • EDI via AS2 – This is a type of EDI that allows documents and data to be shared over the internet. It continues to gain market in the logistics industry because of its ability to connect with several computers.
  • Web EDI – This is an even better form of the EDI via AS2. This type of EDI allows access of documents via an ordinary browser.
  • EDI outsourcing – Here, a firm chooses to hire another one to help it manage its EDI systems. This is common for many businesses that may need EDI services without the capacity to set up in-house teams.

What is the Importance of EDI?

If you are asking yourself, what is the importance of EDI, anyway? Then, to answer your question, the word ‘efficiency’ comes to mind.

EDI helps to streamline logistics services and allows easy record keeping and sharing of files. This allows for more efficiency in the handling of value tasks that help make logistics more possible.

What are the Benefits of EDI?

Aside from its importance in improving the efficiency of a logistics company, EDI also benefits a company in other many ways.

  • Saving on costs – Logistics firms don’t need to set aside a massive budget for printing and mailing of documents. With EDI, the files can be shared with clients instantaneously.
  • Time-saving – Compared to the past, when the document had to be crafted from scratch and then submitted to clients, EDI increases efficiency and cuts down on lost time. EDI systems have in-built templates that help make work easier.

Why EDI?

EDI is an aspect of technology that can’t be left behind in today’s logistics industry. If a  logistics company is to streamline its transactions with clients, EDI is necessary.

Pharmaceutical Warehousing Requirements


Pharmaceutical Warehousing Requirements

Pharmaceuticals Help Keep Us Healthy, But How Do You Keep Pharmaceuticals Healthy?

More than 131 million people use prescription drugs, which is 66% of all adults in North America according to the Georgetown Health Policy Institute. Many people depend on these drugs to manage severe or chronic conditions and maintain a certain quality of life.

The supply chain of prescription drugs and other pharmaceutical products must meet specific requirements. If a drug loses its quality or potency at some point between production and consumption, it offers no medicinal value.

Warehousing is a crucial component of the pharmaceutical supply chain management that contributes significantly to the wellbeing of millions of people.

General Information

In Canada, pharmaceuticals are regulated by the Health Products and Food Branch (HPFD) of Health Canada. In the United Sates, the Food and Drug Administration (FDA) regulates pharmaceuticals.

There are numerous regulatory standards that apply to pharmaceutical warehousing, products, and processes through the Good Manufacturing Practice (GMF) standards.

Included are several pharmaceutical warehousing requirements in the GMF standards:

  • Warehouses must store drugs in a manner to prevent contamination, and that allows for thorough inspection and cleaning of the area.
  • Each drug lot must have a unique and traceable code to allow for lot identification and lot status identification (approved, quarantined, rejected.)
  • Each drug in the warehouse must have written procedures that describe the processes for distribution and recalls.
  • The written procedures of each drug must describe appropriate storage conditions.

Appropriate storage requirements present unique challenges to pharmaceutical warehouses. Each drug has individual storage requirements in terms of temperature, lighting, and humidity. The warehouse must follow the drug manufacturer’s storage requirements to the letter.

Meeting storage requirements often involves setting and monitoring the environmental parameters of a storage section’s temperature- and climate control.

Temperature control involves controlling and monitoring the temperature of the facility.

Climate control refers to the regulation of a storage unit’s temperature and humidity.

What to Look for in a Warehouse Partner

A pharmaceutical warehousing provider should not only meet GMF standards, but the facility should also meet the following requirements:

  • The warehouse should be sterile with enough space for storage, maintenance, and inspection.
  • The facility should have sufficient ventilation and lighting.
  • The facility should have a dedicated quarantine area for drugs that are no longer usable.
  • The warehouse should have indoor and outdoor security systems in place to prevent unauthorized entry and theft.
  • The warehouse should be able to store drugs without specific storage requirements at room temperature.
  • The warehouse partner should be able to provide the client with written documentation of policies, distribution, inventory, and procedures.

Brimich Logistics for Pharmaceutical Warehousing

Brimich Logistics in Ontario provides a wide range of warehousing and value-added services. Our facilities are HACCP-compliant, and SQF certified. The benefits of Brimich Logistics include:

  • Real-time data on inventory
  • Efficient warehouse staff
  • Facilities to store pharmaceutical drugs according to manufacturer instructions
  • Industry-standard safeguarding against drug contamination

Brimich Logistics provides pharmaceutical clients in Ontario with responsive and reliable warehousing solutions. We are ready to assist you with your pharmaceutical warehousing solutions today. To learn more about our warehousing, logistics, value-added, and transportation services, contact us today.

What Are CFS Charges at Customs?


What Are CFS Charges at Customs?

If You’re Shipping Internationally, You Need to Know This

A Container Freight Station (CFS) refers to an area of a port where the loading and unloading of containerized cargo is completed.

This area, in most cases, is an extension of the port but still under the jurisdiction of the customs authority. Here is how CFS impacts logistics.

CFS Charges

One of the most commonly asked questions when it comes to matters of the logistics of importing and exporting goods is, “What are CFS charges?

CFS charges refer to the fees that apply for each activity performed at a CFS, namely the import and export of goods through customs.

Various parameters determine these charges. In some cases, CFS charges can be uniform for a specified category of goods being handled.

CFS charges have a high impact on logistics when it comes to shipping goods into or out of a country. These charges can and will eat into a logistics budget if they happen to be higher than was expected.

If you are an exporter, it’s especially crucial that you understand what export CFS charges are. These are the charges that are involved when your containerized goods are packed onto the ship.

In some instances, the customs authority may liaise with customs authorities at the target destination so that they can charge an all-inclusive CFS fee that will cater for both countries, but this is uncommon.

This means that an exporter needs to always have the right information before exporting his or her goods.

How Does CFS Affect Logistics?

The smooth movement of your containers from one place to another is necessary for a logistics team to manage their products effectively.

This gives you both the peace of mind that is required to run a business and also allows you the confidence needed to make the right business decisions.

With CFS charges in play, a lot can change with regards to your logistics. This is how CFS affects logistics.

  • Delays – A failure to negotiate CFS charges on time is one of the leading causes of delays that are experienced in the logistics industry. It is necessary to have an agreement in place to prevent these delays.
  • Increased costs – CFS charges contribute largely to increased costs of logistics. For people thinking about getting into imports or exports, it is vital to partner with a firm that helps you with logistics to avoid these inflated costs.
  • Deteriorating relationships – CFS charges are usually a bone of contention between custom authority officials and the importers and exporters. Many of the deteriorating relationships between their parties are caused by CFS charges and the failure to agree to a figure that appeals to both.

How Logistics Companies Help

  1. Negotiate – Logistic companies help you negotiate CFS charges with customs authorities. This takes the stress off your plate, especially if you are not knowledgeable about matters of customs.
  2. Streamline the logistics – Logistics, handled on an individual level, require that you keep track of each movement. This can be quite hectic. Logistics companies do this for you.

Final Thoughts: Dealing with CFS Charges

There’s no such thing as a way around them when it comes to CFS, customs, and charges that may apply to your goods. It’s essential as a business, to partner with firms and agents that help make this easier for you.

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