Category Archives: Logistics

MAP-21 is in Effect. Are You Compliant? Part II

In Part I, we noted that MAP-21, or the Moving Ahead for Progress in the 21st Century Act (1.3MB PDF), took effect on October 1, outlined some key sections of interest, and asked if your Supply Chain was compliant?

Today we are going to outline some of the key provisions that you should be aware of if you are not already.

Motor Vehicle and Highway Safety Improvement Act: Subtitle B

  • 31206
    Amends Chapter 327 of title 49 of the United States Code to increase the penalty amounts by a factor of 5 to 10, depending on the offence.
  • 31207
    A person
    may not sell, offer for sale, introduce or deliver for introduction
    in interstate commerce, or import into the United States any motor
    vehicle or motor vehicle equipment if the vehicle or equipment
    contains a defect related to motor vehicle safety about which notice
    was given.
  • 31208
    manufacturer (including an
    importer) offering a motor vehicle or motor vehicle equipment for
    import shall provide, upon request, such information that is necessary
    to identify and track the products, including (1) the product name and manufacturer address and (2) each retailer or distributor to which the manufacturer directly supplied motor vehicles or motor vehicle equipment.
  • 31209
    Amends section 30166(c) of title 49 of the United States Code to require entry into a memorandum of understanding with
    the Secretary of Homeland Security for inspections and sampling
    of motor vehicle equipment being offered for import to
    determine compliance with this chapter or a regulation or order
    issued under this chapter    .

Motor Vehicle and Highway Safety Improvement Act: Subtitle C

  • 31307
    No motor vehicle manufacturer,
    part supplier, or dealership may discharge an employee or
    otherwise discriminate against an employee with respect to compensation,
    terms, conditions, or privileges of employment because the employee (or any person acting pursuant to a request of the
    employee) —

    1. provided, caused to be provided, or is about to provide
      (with any knowledge of the employer) or cause to be provided
      to the employer or the Secretary of Transportation information
      relating to any motor vehicle defect, noncompliance, or any
      violation or alleged violation of any notification or reporting
      requirement of this chapter;
    2. has filed, caused to be filed, or is about to file (with
      any knowledge of the employer) or cause to be filed a proceeding
      relating to any violation or alleged violation of any motor vehicle
      defect, noncompliance, or any violation or alleged violation of
      any notification or reporting requirement of this chapter;
    3. testified or is about to testify in such a proceeding;
    4. assisted or participated or is about to assist or participate
      in such a proceeding; or
    5. objected to, or refused to participate in, any activity
      that the employee reasonably believed to be in violation of
      any provision of chapter 301 of this title, or any order, rule,
      regulation, standard, or ban under such provision.

Commercial Motor Vehicle Safety Enhancement Act: Subtitle A

  • 32107
    The Secretary shall require a registrant
    to update its registration under this section not later than
    30 days after a change in the registrant’s address, other contact
    information, officers, process agent, or other essential information,
    as determined by the Secretary    .
  • 32109
    The Secretary
    shall revoke the registration of a motor carrier if the Secretary
    finds that the carrier is or was conducting unsafe operations
    that are or were an imminent hazard to public health or property    .
  • 32110
    The Secretary may withhold, suspend, amend, or revoke any
    part of the registration of a person required to register under
    chapter 139 for failing to obey a subpoena or requirement of the Secretary under this chapter to appear and testify or produce
    records    .

Commercial Motor Vehicle Safety Enhancement Act: Subtitle B

  • 32203
    The State shall report a conviction of a foreign
    commercial driver by that State to the Federal Convictions
    and Withdrawal Database    .
  • 32204
    Updates section 31310 to state that a foreign commercial
    driver shall be subject to disqualification under this section    .

Commercial Motor Vehicle Safety Enhancement Act: Subtitle C

  • 32302
    The Secretary has one year to establish a national registry of medical examiners in accordance with section 31149(d)(1)
    of title 49, United States Code and develop requirements for a medical examiner to be
    listed in the national registry.
  • 32304
    The Secretary has one year to issue final regulations minimum entry-level training requirements for an individual
    operating a commercial motor vehicle.

Commercial Motor Vehicle Safety Enhancement Act: Subtitle E

  • 32504
    The Secretary may enforce an imminent hazard out-of-service order by towing and impounding a commercial motor vehicle until the order is rescinded.
  • 32505
    Penalties are increased by a factor of 3.5 to 20, depending on the penalty.

Commercial Motor Vehicle Safety Enhancement Act: Subtitle I

  • 32915
    A motor carrier
    may not broker transportation services unless the motor carrier
    has registered as a broker under this chapter.
  • 32915
    A motor carrier registered under this chapter may only provide transportation of property with
    (A) self-propelled motor vehicles owned or leased by
    the motor carrier; or
    (B) interchanges under regulations issued by the Secretary
    if the originating carrier
      (i) physically transports the cargo at some point;
    and
      (ii) retains liability for the cargo and for payment
    of interchanged carriers …
  • 32918
    Each broker subject
    to the requirements of this section shall provide financial security
    of $75,000 for purposes of this subsection, regardless of
    the number of branch offices or sales agents of the broker    .
  • 32921
    Requires that a carrier demonstrates, before being registered, through
    successful completion of a proficiency examination established
    by the Secretary, knowledge and intent to comply
    with applicable Federal laws relating to consumer protection,
    estimating, consumers’ rights and responsibilities, and
    options for limitations of liability for loss and damage    .

Hazardous Materials Transportation Safety Improvement Act

  • 33010
    Increases already large civil penalties by 50% to 75%.

Again SI would like to state that this isn’t an exhaustive list of items that you need to be aware of as a broker or carrier, but just a starting one. If you are a freight broker or carrier and someone on your staff hasn’t at least scanned this end-to-end, it would probably be a good idea, especially considering all of the increased penalties for non-compliance.

MAP-21 is in Effect. Are You Compliant? Part I

MAP-21, or the Moving Ahead for Progress in the 21st Century Act (1.3MB PDF), took effect on October 1. Is your Supply Chain compliant?

At 584 pages, this act is a monster. Probably the most relevant to your supply chain and logistics activities is Division C which contains the Transportation Safety and Surface Transportation Policy, which starts on page 328 and ends on page 440, which contains the Motor Vehicle and Highway Safety Improvement Act, the Commercial Motor Vehicle Safety Enhancement Act, the Hazardous Materials Transportation Safety Improvement Act, and the Sport Fish Restoration and Recreational Boating Safety Act of 2012, with the first three being the most relevant.

In these acts, the most obvious sections of interest are 31206 that define increased penalties for odometer fraud, 31207 that extends prohibitions on importing non-compliant vehicles and equipment to defective vehicles and equipment, 31208 on the conditions on importation of vehicles and equipment and 31209 on port inspections in subtitle B of the Motor Vehicle and Highway Safety Improvement Act; 31307 on whistleblower protections of subtitle C of the Motor Vehicle and Highway Safety Improvement Act; 32107 on increased penalties for operating without registration and 32109 and 32110 on revocation of registration for imminent hazards and failure to respond to subpoena of subtitle A of the Commercial Motor Vehicle Safety Enhancement Act; 32203 on state reporting of foreign commercial driver convictions, 32204 on the authority to disqualify foreign commercial drivers, and 32205 on the revocation of foreign motor carrier operating authority for failure to pay civil penalties of subtitle B of the Commercial Motor Vehicle Safety Enhancement Act; 32302 on driver medical qualifications and 32304 on commercial motor vehicle operator training of subtitle C of the Commercial Motor Vehicle Safety Enhancement Act; 32504 on impoundment and immobilization of commercial motor vehicles for imminent hazard and 32505 on increased penalties for evasion of regulations of subtitle E of the Commercial Motor Vehicle Safety Enhancement Act; 32915 on additional motor carrier registration requirements, 32918 on financial security of brokers and freight forwarders, and 32921 on additional registration requirements for household goods motor carriers of subtitle I of the Commercial Motor Vehicle Safety Enhancement Act; and 33010 on civil penalties of the Hazardous Materials Transportation Safety Improvement Act.

This, of course, isn’t an exhaustive list of items that you need to be aware of as a broker or carrier, but just a starting one. For example, in 31105 on National Priority Safety Programs, which amends section 405 of title 23 of the United States Code, there is a section on distracted driving grants that authorizes the secretary to award a grant to any state that prohibits texting while driving and youth cell phone use while driving. This is likely going to result in (additional) cash-strapped states banning texting and (youth) cell phone use while driving. (So you better have a policy in place preventing your drivers from texting behind the wheel if you don’t already!)

So what is relevant in the sections of interest? Stay Tuned for Part II.

FTZ, As Easy as 1-2-3

A recent article over on Inbound Logistics did a good job of dispelling Three Top Myths About Foreign Trade Zones. In short, despite some opinions, free / foreign trade zones (FTZs) are not risky, hard to use, or costly. (Although they are well-regulated with their own intricacies and do involve a setup cost like everything else. But the future benefits surpass the set-up costs quite quickly!) This is because:

FTZs are no more risky than regular imports.

Customs always has the right to inspect your imports, and import process, at any time whether or not you are using a FTZ. And whether or not you are using an FTZ, you still have to deal with a slew of reporting and transparency regulations, such as 10+2 and advance notifications, so there really isn’t more reporting or record keeping involved (as much of the information required already needs to be maintained for customs and inventory control). Plus, FTZs can allow duties to be deferred — which can improve company cash flow. In fact, properly utilized, FTZs can be less risky than regular imports.

FTZs are easy to use — with the right process.

Basically, instead of landing your goods to your warehouse, you land them to a Free Trade Zone where they stay until they are manufactured/reconfigured, extracted for consumption, or re-exported. In the first two cases, the goods become subject to duties at this time. In the third case, the goods, destined for manufacturing or consumption in another country, are sent on their way to their final destination duty free.

And if there is a Government run multi-purpose FTZ set up at or near the port of import, utilization of an FTZ is as simple as an application. (If, however, the importer wants to set up a special FTZ at its warehouse or manufacturing location, the process is considerably more complex and the company will have to bring in an expert and will definitely need to acquire best-of-breed global trade management software.)

FTZs improve Working Capital Management.

As mentioned above, FTZs allow a company to defer duties until such time as the goods are consumed and avoid paying duties on goods that are destined for re-export as-is. This can be an incredible cost saving for a company that does a lot of importing and exporting.

In addition, as noted by the author of the article on Three Top Myths About Foreign Trade Zones Dispelled, FTZs can also eliminate duties on waste, scrap, and rejected or defective parts as such parts are never consumed! In other words, a properly configured and utilized FTZ insures that you only pay duties on goods that you use or sell, when you use or sell them! This is a much better way to improve your working capital situation than extending DPO to your cash-strapped suppliers!

The Road to Riches? The Rails, My Friend, the Rails.

Every day, SI is becoming more convinced that if you want your Supply Chain to be a success, you need to ride the rails. It used to be if you were shipping goods long-haul over land, you’d ship them by train. There was no long-haul trucking and air was just too expensive. But then the war ended, Dwight D. Eisenhower championed the National system of Interstate and Defense Highways, the Federal Aid Highway Act of 1956 came into effect, long-haul trucking became an option, buses became more popular than trains for many trips, the railroads started to struggle financially, and ground eventually overtook rail for most cargo in the US.

And today, people in North America associate trains with the Wild, Wild West despite the fact that rail is, by far, the most cost-efficient way to move cargo over ground for distances in excess of 500 miles. It’s also typically the best choice for intermodal ocean freight as the major rail networks will not only have their terminals in the ports, but SLAs (Service Level Agreements) to make sure cargo is quickly transferred from ship to rail-car. For example, agreements between the Port of Halifax and CN Rail gives you a double-stack rail-service direct link to Chicago in 71 hours, which is typically a 3-day drive when you factor in daily driver limits and border crossing.

Why is SI becoming more convinced that Rail is the Future? Three reasons:

  1. Fuel Efficiency
    Trains can move a ton of freight nearly 450 miles on a single gallon of fuel. Find a truck that can do that!
  2. Predictability
    The railroads control the rails – and can schedule them to maximize capacity and prevent traffic jams that can delay trucks for hours or more. Plus, well maintained lines and trains that keep to schedules suffer significantly less accidents than traffic on the road.
  3. Adoption by the East
    While the young and immature west might have dumbly abandoned trains just like it abandoned trams (and replaced them with gas guzzling polluting busses), the East is investing Billions in new (high-speed) rail lines everywhere. Consider this recent article in the Economist on how its One Night to Bangkok with Laos committing to invest 6.2 Billion on a new 260-mile passenger and freight railway between Kunming and Vientiane straight through the mountainous region of Northern Laos. Think about that. The GDP of Laos is only 9.3 Billion! That’s a huge commitment for a country the size of Laos, even if the commitment connects China to Thailand and will capture a sizeable portion of the 4 Trillion worth of imports and exports that flow into and out of China. This 6.2 Billion dollar railway will require 196 km of blasting and will create 76 tunnels. To put this into perspective, combined they would form a tunnel long enough to connect Korea to Japan under the sea.

It’s time to ride those rails!

While You Were on Summer Vacation, Vendor Posts, Part III

While you were on summer vacation, SI was powering away with daily posts and continuing to cover some of the leading vendors in the space, presenting a number of deep dives on their technology platform. Here is a short recap of some of the coverage you might have missed!

Airclic

Designed to make 3PL deliveries click, Airclic’s Transport Perform solution, which is tightly integrated with their new Route Planning and Route Optimization solutions, incorporates support for simultaneous high-volume cross-docking and multi-driver cross-border routes in a new web portal that makes their platform as easy to use as a multi-tab spreadsheet. One of the highlights of their solution is a clear, easy to use, non-distracting, straight-to-the-point interface for dock workers and truck drivers, especially when all these people have is a small, primarily text based, mobile device. The application, which can be pre-configured with relevant supplier data, including whether the supplier is ASN-based or non-ASN-based (Advance Shipping Notice), allows the application to be customized to each supplier so that a dock worker or driver only has to enter the absolute minimal amount of information (which, for an ASN-based supplier, can be as little as scanning a barcode) and when additional data has to be collected, is presented with a minimal list of options to choose from.

PrimeRevenue

In our posts on how they are priming your financial supply chain for success (Part I and Part II), we introduced you to PrimeRevenue, a provider of Supply Chain Finance solutions that provides supply chain finance solutions to over 12,000 customers in 40 countries and that processes Billions of dollars of transactions each year. Like other providers of supply chain finance solutions, they provide a platform that helps suppliers access financing for their receivables when they need it from over 40 leading financial institutions. But that’s not the best part of their platform. The best part of the PrimeRevenue platform is a solution by the name of SciMap that provides a consolidated and classified analysis of your spend, enriched by insights from PrimeRevenue’s global database, based on detailed and updated market intelligence. This allows you to make better buying decisions as well as negotiate optimized payment terms, putting the power to improve your working capital in your hands.

iValua

In our four-part series on how they are proving their mettle with source to settle (Part I, Part II, Part III, and Part IV), we noted how iValua is one of the few providers tackling end-to-end sourcing and procurement in a single suite of integrated modules built on one common platform. With capabilities that, to some degree, address each of the core phases of the basic sourcing-and-procurement cycle except decision optimization and tax reclamation, the platform is one of the most extensive native source-to-settle platforms out there. Integration and implementation will take time, especially if your organization wants the full end-to-end capability, but could be worth it for a large organization that needs an extensive, integrated solution.