communicaon, selecon, and negoaon · mechanical damage of the products during shipping o another 15...
TRANSCRIPT
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org www.build4scale.org
Communica)on,Selec)on,andNego)a)onModule5DShipping,Packaging,andCustomsConsidera6ons
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Someresearchdatatoconsider(ShockwatchReport,2013):o 43percentofinsuranceclaimsmadebyshippersareduetomechanicaldamageoftheproductsduringshipping
o Another15percentareenvironment-related(waterandhumidity)
o Poorlyconceivedpackagingcanturncustomersawayfromyourproduct
o Inferiorpackagedesigncancostyoualotintermsofshippingdamage
o Accordingtoonestudy,thecostofgoodsdamagedin-transitismorethanUSD$4billionannually—youcanminimizemanyofthesecostsbydesigningreliableandefficientpackaging
2
Whyisthismoduleimportant?Mo)va)on
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Shippingandpackagingisoneofthelargestcostfactorsinthetotallanded-costsequa6on
o Knowingtheindustryrulesandbestprac6cescanprovidethecompe66veedgeyouneedtoenteranewmarket!
3
Whyisthismoduleimportant?(cont.)Mo)va)on
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Shipping,Packaging,CustomsWheredoesthisfitintothedevelopmentcycle?
Conceptand
FeasibilityDefini)on Productand
ProcessDesignImplementandValidate
Produc)onandStock
Launchand
Closure
Pre-alpha Alpha Beta Pilot Ramp Scale
PHAS
ES
BUILDS
EngineeringValida<on
DesignValida<on
ProcessValida-on
ConceptValida<on
4
PRODUCTDESIGNOBJECTIVES
MANUFACTURINGREADINESSLEVELSLevels: 109987654321
MfgDevelopmentMfgResearch
MfgCapability
Produc)on
MarketResearchDesignResearch
FeasibilityDevelopment
Qualifica6onFieldReadiness
Launch
MfgCapacity
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Learningobjec6veso Preparingyourproductsforshippingo Introduc6ontopackagingo Packagingcostsanddesignrequirementso Shippingdocuments— Commonshippingdocumentsandregulatoryrequirements— Interna6onalshipmentdocumenta6on
o Totallandedcost(TLC)
5
ModuleOutline
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o LO1–Iden6fynecessarypackaging-relatedandshipping-relatedregulatoryrequirements
o LO2–Understandpackagingcostfactors
6
LearningObjec)ves
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Howdoyouprepareyourgoodsforshipping?o Whatareimportantpackagingconsidera6ons?o Howpackagingcaninfluenceyourproductdesignandmaterialsselec6on
o Costofpackagingandhowagoodpackagingdecisioncanreducetheshippingcost
o Whatdocumentsdoyouneedtoprepareforoverseasshippingandreceiving
o Understandingthebestprac6cesinshippingo Understandingtheimpactofpackagingandshippingontotallandedcost
7
WhatThisModuleAddresses
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Packinstrongcontainers,adequatelysealed,andfilledwheneverpossible
o Regardlessofsize,makesuretheweightisevenlydistributedtoprovideproperbracinginthecontainer
o Goodsshouldbepalle6zedandcontainerizedwheneverpossibleo Considerpackaginganduni6zingalterna6veso Packagesandpackingfillershouldbemadeofmoisture-resistantmaterials
o Toavoidpilferage,avoidwri6ngcontentsorbrandnamesonpackages;othersafeguardsincludeusingstraps,seals,andshrinkwrapping
o Observeanyproduct-specifichazardousmaterialspackingrequirements 8
PreparingproductsforshipmentPackaging/Shipping
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Productsafetyo Productspecifica6onso Quan6tyo Compliancewithcustomerandregulatoryshippingrequirements(regulatorydocumentsandinternalquality-inspec6onreport)
o Packingcustomercompliantandsecured?o 100percentinspec6onorsamplingo Sign-offbyqualityinspector
9
ChecklistPackaging/Shipping
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Packagingconsidera6onsincludepreparinggoodsfortransport,distribu6on,storage,andretailing,aswellastheul6matefunc6on/enduseofthegoods
o Packagingincludesbothengineering(safety)andmarke6ng(communica6on)func6ons
Tip:Agreatstar6ngmethodtoevaluatepackagingneedsistoevaluatetheleadingcompe6torandotherlikeproducts.Itiscri6caltoonlyconsiderthoseproducedbycredible,ethical,reputable,wellrun,longstandingcompanies.Leveragetheirinvestmentininternalandexternalresourcesaswellasprac6calexperiencethatledtotheircurrentpackagingandlabelingformat.Usethisasadatasourcewhilerememberingthatul6matelyyouandonlyyouareresponsibleforyourproductswellbeing,customercompliance,legalstatusetc.
10
BasicsPackaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Technicalpackagingprofessionalsneedtoapplyscienceandengineeringskills,whilemarke6ngprofessionalsprovideinsightonar6s6candaesthe6csforunderstandingofconsumermo6va6on
11
Technicalversusmarke<ngPackaging
TechnicalFunc)ons Marke)ngFunc)onsContain CommunicateProtect PromoteDispense DisplayStore Sell
Measure Mo6vatePreserve Inform
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Contain:o Howthepackagingcontainmentfunc6onisselecteddependsontheformoftheproduct(theproductcanrangefromallliquid,solid/liquidmixture,free-flowing,non-free-flowingpowder,solidunit,discreteitems,ormul6componentmix)
o Thenatureoftheproductisalsoimportant(itmaybecorrosive,corrodible,flammable,fragile,easilymarked,underpressure,hygroscopic,irregularinshape,s6cky,odorous,toxic,perishable,orasep6c)
12
Keyfunc<onsPackaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Protect/Preserve:o “Protect”meanspreven6ngfromanyphysicaldamageduetoaccidentandothertravelincidents
o “Preserve”usuallyreferstopreven6ngbiologicalandchemicalchangeinfood(orsimilarbiological/chemical)productssotheshelf-lifeoftheproductscanbeextended
13
Keyfunc<ons(cont.)Packaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Transport:o Itunderscoresthesafetyofgoodsduringtransporta6onfromthepointofproduc6ontothepointoffinalconsump6on
o Oneshouldconsidervarioustransportmodes(truck,rail,aircral,cargoship,etc.),handlingtechniques,andstoragecondi6onswhenselec6ngapackage
Tip:Manytransporta6oncompanieswillassistyoudeterminingyourpackagingneedsandeventestforyou.i.e.,UPS:hmps://www.ups.com/us/en/services/customized-solu6ons/op6miza6on-logis6cs/package-engineering.page
hmps://compass.ups.com/ups-packaging-solu6ons-facility/
hmp://images.fedex.com/us/services/pdf/PKG_Tes6ng_Under150Lbs.pdf
14
Keyfunc<ons(cont.)Packaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Inform/Sell:o Itcanbeagoodbrandingtoolormediumtoimproveperceivedproductquality
o Itdealswithhowapackagecommunicatesbyitspackagematerial,shapeandsize,color,predominanttypography,illustra6ons,recognizablesymbolsoricons,etc.
o Governmentregula6onscandictatehowamessagecanbepresentedonapackage
Examples:howaproductisnamed,quan6tycontained,andtheaddressoftheresponsibleorganiza6on
15
Keyfunc<ons(cont.)Packaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
16
Examples-LevelsofpackagingPackaging
CardboardBoxesPlas6cTrays
PalletsRollcages
Plas6cBomlesIndividualContainers
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
17
PrimaryPackaging
Source:hmp://www.qsstudy.com/business-studies/levels-of-packaging
Primary
Secondary
o PrimaryPackage:Thepackage,whichhasenclosedtheactualcommodity,iscalledprimarypackage.Itreferstotheproduct’simmediatecontainer.Insomecases,theprimarypackageiskeptun6ltheconsumerisreadytousetheproduct(i.e.,plas6cpacketforsocks);whereasinothercases,itispartoftheproduct(i.e.,atoothpastetube,ketchupbomle,etc.)andisusedthroughoutthelifeoftheproduct.
o ForPrimaryPackagingthatisfororganizingorprotec6ngtheproduct,suchasaclearbagorfilm,itisalsoolencalledthe“InnerPack.”— AproductwithaninnerpackthenhasSecondaryPackaging.
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Primary
Secondary
18
SecondaryPackaging
Source:hmp://www.qsstudy.com/business-studies/levels-of-packaging
o SecondaryPackaging:Thelayerofcoveraddedtotheprimarypackageforitsprotec6oniscalledsecondarypackage.Itreferstoaddi6onallayersofprotec6onthatarekeptun6ltheproductisreadyforuse,i.e.,atubeoftoothpasteusuallycomesinacardboardbox.
o Whenconsumersstartusingthetoothpaste,theywilldisposeofftheboxbutretaintheprimarytube.Olencalledthe“OuterPack.”
o Forretailproductsthisisthepackagingtheproductisseeninwhensiqngontheshelf.
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Transporta)onPackaging:Transporta6onpackageisusedtofacilitateiden6fica6on,transporta6on,handling,andstoringoftheproducts.Itreferstofurtherpackagingcomponentsnecessaryforstorage,iden6fica6on,ortransporta6on.Forexampleatoothpastemanufacturermaysendthegoodstoretailersincorrugatedboxescontaining10,20,or100units.Olencalledthe“MasterCartonorPack.”Italsoincludesthingslike“Gaylord”,woodencratesetc.thatareneededfortransport.
19
Transit/transporta<onPackaging
Source:hmp://www.qsstudy.com/business-studies/levels-of-packaging
Primary
Secondary
Transit
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Unitloads:o Aunitloadisacombina6onofproductsthatareputtogethertoimprovetransporta6onandmaterialshandlingfunc6on.
o Includessecondaryitemslikecardboardboxesandplas6ctraysthatareusedtocontainprimaryproducts,andter6aryitemslikepalletsandrollcages,whicharethenusedtouni6zesecondaryitems.
o AccordingtoaEuropeanconsumerresponsereport,“Unitloadsrepresentakeycostdriversincetheyimpactontransport,storage,handlingandpackaging,es6matedtoaccountfor12–15percentofretailsalesprice.”
20
Efficiencythroughuni<za<onandpalle<za<on
Packaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Palle)za)onofloads:o Loadsaremostcommonlyuni6zedonpallets,whichallowsuseofforkliltruckorsimilarequipmentforhandling.
o Mostpalletsaremadeofhardwood—denserands6fferwoodsarepreferredfordurabilityalthoughtheycanbecostlierthanotherwoods.Plas6cisbecomingmorepopularasthefoodindustryandothersterileor“par6cle”sensi6vemanufacturersarerequiredtouseplas6c.UseofGPS&RFIDdevicesandconcernwithrecyclingwillalsoincreasedfutureuseofplas6c.
o Therearemanypossiblepalletsizesanddesigns;however,forthesakeofstandardizeddistribu6on,certainsizesanddesignspredominate
21
Efficiencythroughuni<za<onandpalle<za<onPackaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Theadvantageofunitloadisthatitpacks6ghtlyintowarehouseracks,intermodalcontainers,trucks,andboxcars;yetitcanbeeasilybrokenapartatadistribu6onpoint,usuallyadistribu6oncenter.
22
Efficiencythroughspaceu<liza<onPackaging
Note:Figuresshowhowproductscanbeuni6zedtoimprovetheu6liza6onof
spaceinacontainer.Therearenoone-to-onecorrespondencebetweentrucks(onthelel)andracks(ontheright).
Source:A.T.Kearney,EfficientUnitLoadsproject
Moreperpallet…
Withlessrackspace…
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Func)onalrequirements:o Consumerpackaging(directedatahousehold)shouldprovidesafecontainmentfortheproductandsufficientinforma6ontouserabouthowtouse.
o Commercialpackaging(directedatacommercialenterprise)shouldbeamrac6vetothecustomers,provideacompe66veadvantage,andbeeasytostoreandstock.
23
DesignrequirementsPackaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Distribu)onandsafety:o Productlabelingo Thegoaloftheproductlabellingistoprovideproductsdetails,direc6onsofuse,andotherrelevantinforma6ontotheconsumer
o Salesrequirementso Aesthe6cs,perceivedqualityoftheproduct,andbriefbutadequateproductinforma6onforcustomers
24
Designrequirements(cont.)Packaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Uni)za)onconsidera)ons:o Rigidcontainerso FlexiblecontainersCommunica)onconsidera)ons:o UniversalProductCode(UPC)o ElectronicProductCode(EPC)o Radio-frequencyiden)fica)on(RFID)technologyMaterials-handlingconsidera)ons:o Pallets,fork-liltrucks,ridertrucks,conveyers,etc.
25
Designrequirements(cont.)Packaging
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Customerrequirements(producttypeandmaterials,func6onalrequirements,salesrequirements)
o Packagingmaterialscosto Recyclabilityandreusabilityofpackageso Shipmentquan6ty(i.e.,enoughforpalle6za6on?)o Governmentregula6ons(i.e.,safetyandenvironmentalconsidera6ons)
26
Contribu<ngfactorsPackagingCosts
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
27
TradeoffsPackagingCosts
Source:AdaptedfromYam(2009)
Packaging
Damages
CosttoImprovePackaging
CostsofPackage
Op)mumPackaging
o Packagingcostcanincreaseexponen6allyaswemovefromlowtoverylowdamagerate
o Thepointwherethetotalcost(packagingcost+costofdamage)isminimumprovidesadesirablepackagingdesign
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Billoflading(BOL):o Arequireddocumenttomoveafreightshipmento Servesasareceiptoffreightservices,conveysthefreightterms,andservesasacontractforcarriageandadeliveryreceipt
o Anofficialdocumentthatmaybeadmissibleincourtoflawandisissuedbytheshippingcompany
Freightbill:o SimilartoBOLexceptthatitdoesnotserveasakeypieceof“evidence”inadispute
o Canincludeaddi6onalcharges,informa6on,ors6pula6onsthatfurtherclarifytheinforma6onontheBOL
28
CommonshippingdocumentsDocumenta)on/Requirements
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Freightclaims:o Ademandbyashipperorconsigneeuponacarrier(asforreimbursementofanovercharge,orforlossordamagetogoodsacceptedfortransporta6on).
o Freightclaimsoccurforvariousreasons;somearereal,somearecontrived,somecanbeprevented,buttheyallcanbecontrolled,understood,andkepttoacceptable,understandable,andreconcilablelevels.
29
Commonshippingdocuments(cont.)Documenta)on/Requirements
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Occupa)onalSafetyandHealthAdministra)on(OSHA)requirements:o UndertheOccupa6onalSafetyandHealthActof1970(OSHAct),employersareresponsibleforprovidingasafeandhealthfulworkplace.
o OSHA'smissionistoensuresafeandhealthfulworkplacesbyseqngandenforcingstandards,andbyprovidingtraining,outreach,educa6on,andassistance.
o EmployersmustcomplywithallapplicableOSHAstandardso Employersmustalsocomplywiththe“GeneralDutyClause”oftheOSHAct,whichrequiresemployerstokeeptheirworkplacefreeofseriousrecognizedhazards.
30
RegulatoryrequirementsDocumenta)on/Requirements
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
E-Fulfillment/Third-PartyLogis)cs/Pick-and-Pack:o Inbroadterms,e-Fulfillmentisanamalgama6onofallthepeople,processes,andtechnologyemployedtodeliveranonlineordertoacustomer.
o Thekeyistomakeallofthesecometogethertocreateaposi6vecustomerexperiencebefore,during,andalerasale.
o Itincludeseverythingfromtheonlinecheckoutprocess,paymentprovider,andordermanagementsystem;tothestepstakentopick,pack,andshiptheorder.
o Attheendof2014,U.S.e-trailsalessurpassed$300billionforthefirst6me—Thisnumberisexpectedtokeepgrowingasonlineshoppingcon6nuestoincrease.
31
Regulatoryrequirements(cont.)Documenta)on/Requirements
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Environmentalconcerns:o Thenormalshippinghazardsinthefreightenvironmentcanvarybymode.
o Truckload,LTL,railcar,oceanic,andairfreightshippingenvironmentstypicallyincludehazardsthatareuniquetothosemodes,aswellastheircommonhazards.
o Manyofthemoreseverehazardsareduetothenumberofseparatehandlingsrequiredandthemechanizedmaterial-handlingequipmentused.
32
Regulatoryrequirements(cont.)
Documenta)on/Requirements
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Handlinganddeterminingmethodofshipping:o Consultwithafreightforwardertodeterminethemethodofinterna6onalshipping.
o Usuallyconsistsoflargeandbulkyshipments,soitrequiresalonglead6meandadvancebookingforaspaceonboardatransport.
o Thecommonprac6ceistohaveamul6-modaltransit(morethanonemeansoftransporta6onsuchastruck,rail,barge,airplane,ship,etc.)operatorstakethefullresponsibilityfortheen6removementofgoodsfromfactorytoyourfinal(i.e.,customer)des6na6on.
33
Considera<onsOverseasShipping
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Factorstoconsiderwhendetermininginterna)onalshippingmethods:o Costofshipmento Deliveryscheduleo Accessibilitytotheshippedproductbyyourforeignbuyero CheckMandatoryScreeningofCargoonPassengerFlightsifshippedbyapassengeraircral
34
Considera<ons(cont.)OverseasShipping
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Otherimportantconsidera)onsforinterna)onalshipping:o Packagingandlabelingo Cargoinsuranceo Whenshippingagriculturalproducts,checktheU.S.governmentregula6onatShipYourAgriculturalProducts
35
Considera<ons(cont.)OverseasShipping
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
NeedtocomplywithbothU.S.andforeigngovernmentregula<onsProductclassifica)on:o FindingtheHarmonizedSystem(HS)codeisthestar6ngpointtoclassifyingaproductandpreparingitforexport.
o Theinterna6onalHSisadministratedbytheWorldCustomsOrganiza6on,andservesasthefounda6onfortheimportandexportclassifica6onsystemsusedintheUnitedStates.
o TheU.S.importclassifica6onsystem,theHarmonizedTariffSchedule(HTS)administeredbytheU.S.Interna6onalTradeAdministra6onCommission(USITC),andtheU.S.exportclassifica6onsystem,theScheduleBadministeredbytheU.S.CensusBureau,ForeignTradeDivision,bothrelyontheinterna6onalHScodesfortheir4-digitand6-digitheadingsandsubheadings. 36
Considera<onsPreparingProductsForExport
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Rulesoforigin(ROO):o Totakeadvantageofthereduced-dutybenefitsunderafreetradeagreement(FTA),anexportedproductmustoriginatefromanFTAparty,ormustcontainaspecifiedpercentageofU.S.inputsandcomponents.
o EachFTAhasitsownROOsthatdescribehowexportedgoodsshippedtoacountryoraregionmayqualifyforduty-freeorreduced-dutybenefits.
o BecausetheROOsareFTA-specificandproduct-specific,theyneedtobefollowedcarefully.
ForeignStandardsandCer)ficates:o ResearchUSTradePartnerCountriestounderstandthetradebenefitsduetofreetradeandotheragreements(export.gov)
37
Considera<ons(cont.)PreparingProductsForExport
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Reviewimportrejec6onlawsandtradebarrierso Buildrela6onshipsandnetworkonthegroundintheexportcountry
o Hireacustomsbrokero Checklicenseorpermitrequirementsforimpor6ngcertaingoods
o Getassistanceandtrainingo Moreinforma6ononthissubjectcanbefoundathmps://www.sba.gov/blogs/impor6ng-goods-us-introductory-guide-small-business-owners
38
Bestprac<cesImpor)ngIntoTheUnitedStates
Note:Customsbrokersareprivateindividuals,partnerships,associa<onsorcorpora<onslicensed,regulatedandempoweredbyU.S.CustomsandBorderProtec<on(CBP)toassistimportersandexportersinmee<ngFederalrequirementsgoverningimportsandexports.
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Acomprehensivereportthatprovidesinforma)ononthefollowing:o Packagingrequirementso Customsdocumentso Internetpurchaseso Intellectualpropertyrightso ToxicSubstanceControlAct(TSCA)o Interna6onaltradeagreementso Adetailedreportcanbefoundat:hmp://www.dhl-usa.com/content/dam/downloads/us/express/local_other/dhl_us_customs_import_guide.pdf
39
ImportIndustryGuideU.S.Customs
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Expor)ngdocuments:o BOL,dockreceipt,deliveryinstruc6ons,exportdeclara6on,lemerofcredit,consularinvoice,commercialinvoice,insurancecer6ficate,andtransmimallemer
Impor)ngdocuments:o Arrivalno6ce,customsentries,carrier’scer6ficateandreleaseorder,deliveryorder,freightrelease,andspecialcustomsinvoice(ifapplicable)Note:Fordefini6onsandexplana6onsofthesedocuments,visit
www.export.gov
40
Interna<onaltransportdocumenta<onDocumenta)on/Requirements
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Whatitisandhowtouseit
o TLCisthesumofallcostsassociatedwithmakinganddeliveringproductstothepointwheretheyproducerevenue
o Allowsbusinessmodelstoop6mizethesupplychaino Iden6fieshiddencostsinthesupplychaino Reducesworkingcapital,therebyimprovingcashflow
Packagingandshippingcostsarehugedriversofyourlogis<csandtransporta<oncost
TotalLandedCost
41
TotalLandedCost
PurchasePrice
Logis)csandTransporta)on
Cost
RiskandCompliance
Cost
InventoryCost
OverheadandAdministra)ve
CostCustoms
TotalLandedCost
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Thebasepriceofsourcingtheassociatedgoodsand/ormaterials—itincludesthefollowing:o Thepriceofgoodspaidtothesellero Bankingfeesifandwhereapplicableo Currencyexchangerates— Choosingwhichcurrencytouseforpurchasingisveryimportant
— Currencieswithlowvola6lityleadtoreduc6onofriskandhandling
42
PurchasepriceTLCDrivers
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Includescosttermsthatcannotbeadributeddirectlytoaproduct:o Itdependsuponthehierarchy/levelspresentinanorganiza6onpar6cularlywhenitcomestopurchasingdecisionapprovalprocess(usually,thegreaterthehierarchy,thehigherthecostandinefficiency)
o Bankingfeesifandwhereapplicableo Costofmaterialhandling,manufacturingoverheadcosts,andoversightcosts
43
Overhead/administra<vecostsTLCDrivers
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Includestheline-haulcost,domes)c/interna)onalshippingalongsidepackagingandinsurancecosts—itdependsonthefollowingfactors:o Thegeographicaldistancetraversedtodelivertheproducttothecustomer
o Thetotaltravel6me(basetrip6me+refuelling6me+loading6me+bordercrossing6me[forlandshipping])
o Incotermtobeused,detailingtherulesandregula6onsregardinggoodstransporta6on— Typeofpackagingbeingused;takingcaretoensurethatriskofproductdamageisminimum
— Laborandfuelcost,andexpeditedshippingcost(ifapplicable)— Interna6onaltradeagreements
44
Transporta<on/logis<cscosts
TLCDrivers
Examples:hmp://www.dovelogis6cs.com/inco-terms-2016/
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Includesthecustomsinspec)on,taxes,brokerfees,andthemerchandiseprocessingfee(MPF)—theimportantfactorstoconsiderare:o Applicabledu6esandtaxes,withtheobjec6veofminimizingthetaxburden
o Loca6onofoffshoreproduc6onfacility(ifapplicable)o Thecountrytowhichtheproductisshipped,sincethecustomsandtaxesvaryvastlyamongstdifferentcountries
45
Customs
TLCDrivers
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Itconsistsofthevalueofthesafety/cyclestock,thevalueoftheinventory-in-transit,etc:o Safetystock:theminimuminventoryleveltopreventstock-outs(associatedwithlead-6mevariabilityanddemand)
o Cyclestock:theminimuminventoryrequiredtomeetcustomerdemandsbetweeninventoryreplenishmentruns
o Costofinventory:itdependsonthecompany’sbusinesspolicyandproduc6onloca6ons
46
Inventorycost
TLCDrivers
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Itisthecostofcomplyingwithregula)onsandtradepoliciesandthecostofpoten)alrisks—including:o Upda6ngwithrespecttochangesingovernmentrulesandguidelines— Non-adherencecouldresultinthedisrup6onoftheen6reproductsupplychain
o Possibilityofdamagingthebrandname— Thiscanoccurbynotmee6ngsafetyand/orhealthstandardsorcausingdamagetotheenvironment
o Possibilityofproductrecallduetodefects— Thiscanleadtotheoccurrenceofareversesupplychain
47
Risk/compliancecost
TLCDrivers
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
Example
o ThisisabreakdownofthecostincurredfordeliveringanelectronicproductshipmentfromthemanufacturerintheUStothecustomerinLondon
TLC=$299+$15+$30+$10+$75+$45=$475Contribu6on(%)ofshippingandpackagingcoston:TLC=$75/$475=15.8%Note:*IncludesPackagingCost+InlandFreight+Air/SeaFreight
TLCCalcula)on
48
$45$75*$10$30$15$299
Customerin
London
USSellingPrice
Logis)csandTransporta)on
CostCustomsInventory
Cost
OverheadandAdministra)ve
Cost
RiskandCompliance
Cost
CompanyinUSA
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Johnson,M.D.,Sawaya,W.J.,andNatarajarathinam,M.(2013),Amethodologyformodellingcomprehensiveinterna<onalprocurementcosts.Interna6onalJournalofProduc6onResearch,51(18),5549-5564.2
o WorldIndustrialReporter(2012)-ManagingYourSupplyChain:AccuratelyCalcula<ngTotalLandedCostshmps://www.worldindustrialreporter.com/wp-content/uploads/2012/09/Calcula6ng-Landed-Costs1.pdf
o SupplyChainDigest(2008)-GlobalSupplyChainNews:Ge\ngtoAccurateTotalLandedCostshmp://www.scdigest.com/assets/On_Target/08-06-09-1.php
o Landsberg(2015),ReduceShippingCostswithPackageRedesignWhitepaperhmp://resources.landsberg.com/wp-content/uploads/2014/07/reduce-costs-packaging-redesign-whitepaper.pdf
49
References/Resources
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Onlinear6cles:hmp://news.ewmfg.com/blog/7-ways-to-reduce-packaging-costshmp://www.nosco.com/blog/5-ways-to-reduce-packaging-costs/hmp://www.mckinsey.com/business-func6ons/opera6ons/how-we-help-clients/reduce-packaging-costs
o TheEfficientUnitLoadsReport,EfficientConsumerResponse(ECR),Europe,PP.10,46hmp://ecr-all.org/wp-content/uploads/pub_1997_efficient_unit_loads.pdf
o TheEfficientUnitLoadsReport,EfficientConsumerResponse(ECR),Europe,PP.13hmp://ecr-all.org/wp-content/uploads/pub_1997_efficient_unit_loads.pdf
50
(Cont.)References/Resources
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o AdamRobinson(2014),FreightBillvs.BillOfLanding:KnowingtheDifferenceisKeytoEffec<veLogis<cs,PP.1hmp://cerasis.com/2014/01/23/freight-bill-vs-bill-of-lading/
o “FreightClaim”(entry),MerriamWebsterDic6onary,OnlineEdi6onhmp://www.merriamwebster.com/dic6onary/freight%20claim
o TransportGis6cs,Over,ShortandDamageClaimsorLossandDamageClaimshmp://www.insourceaudit.com/Whitepapers/ldclaims.asp
o Occupa6onalSafetyandHealthAdministra6on,UnitedStatesDepartmentofLaborhmps://www.osha.gov/law-regs.html
o Knox,Jillian(2016),5ThingsEveryoneShouldKnowAbouteFulfillmentServices,PP.1hmps://www.nchannel.com/blog/efulfillment-services/
51
(Cont.)References/Resources
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Anonymous(2014),GuidetoPackagingFreightShipments,Ins6tuteofPackagingProfessionals.PP.3hmps://www.iopp.org/files/IoPPFreightShippingGuidelines8414.pdf
o Anonymous(2014),ProductClassifica6on,export.govhmps://www.export.gov/ar6cle?id=Find-HS-Code
o Anonymous(2016),RulesofOrigin,export.govhmps://www.export.gov/ar6cle?id=Rules-of-Origin
o Beesely,Caron(2016),Impor6ngGoodsintotheU.S.–AnIntroductoryGuideforSmallBusinessOwners,ManagingaBusiness,PP.1hmps://www.sba.gov/blogs/impor6ng-goods-us-introductory-guide-small-business-owners
52
(Cont.)References/Resources
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Anonymous(2010),MandatoryScreeningofCargoonPassengerFlights,export.govhmp://2016.export.gov/ar6cles/eg_main_021809.asp
o Introduc6onandhistoryofpackagingdevelopment–module1,historyofpackagingdevelopment–lesson1hmp://ecoursesonline.iasri.res.in/mod/page/view.php?id=6193
o Introduc6onandhistoryofpackagingdevelopment–module1,importanceofPackaging–lesson2,PP.1hmp://ecoursesonline.iasri.res.in/mod/page/view.php?id=6195
o TransportGis6cs,Over,ShortandDamageClaimsorLossandDamageClaimshmp://www.insourceaudit.com/Whitepapers/ldclaims.asp
o Occupa6onalSafetyandHealthAdministra6on,UnitedStatesDepartmentofLaborhmps://www.osha.gov/law-regs.html
53
(Cont.)References/Resources
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o Benton,Jr.W.C.,1948-Purchasingandsupplychainmanagement,NewYork,NY,McGraw-Hill
o Anonymous(2016),‘AgriculturalProducts’,export.govhmps://www.export.gov/ar6cle?id=Sector-Specific-Considera6ons-Agricultural-Products
o Anonymous(2016),UnitedStatesCustomsImportIndustryGuide,DHLhmp://www.dhlusa.com/content/dam/downloads/us/express/local_other/dhl_us_customs_import_guide.pdf
o Anonymous(2016),RulesforInterna6onaltradeasdefinedbyIncoterms@2016hmp://www.dovelogis6cs.com/inco-terms-2016/
o Kit,L.Yam(2009),TheWileyEncyclopediaofPackagingTechnology,3rdedi6on,PP.1242.
54
(Cont.)References/Resources
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o 3PL–ThirdPartyLogis6cso LTL–LessThanLoado HS–HarmonizedSystemo HTS–HarmonizedTariffScheduleo USITC–U.S.Interna6onalTradeAdministra6onCommissiono FTA–FreeTradeAgreemento ROO–RulesOfOrigin
55
ListofAcronyms
Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org
o MRL–ManufacturingReadinessLevelo TLC–TotalLandedCosto UPC–UniversalProductCodeo EPC–ElectronicProductCodeo RFID–RadioFrequencyIden6fica6ono BOL–BillofLadingo OSHA–Occupa6onalSafetyandHealthAct
56
(cont.)ListofAcronyms
Glossary
Module 5D
Unit Load combines individual items or items in shipping containers into single "units" that can
be moved easily with a pallet jack or forklift truck.
Process Validation is the analysis of data gathered throughout the design and manufacturing of
a product in order to confirm that the process can reliably output products of a determined
standard.
Manufacturing Capacity is the volume of products or services that can be produced by an
enterprise using current resources. Three commonly used definitions of capacity are as follows:
design capacity, effective capacity & actual output. (Repeat from 2B)
Production is the processes and methods used to transform tangible inputs (raw materials,
semi-finished goods, subassemblies) and intangible inputs (ideas, information, knowledge) into
goods or services.
Primary Package is the first-level product packaging such as the bottle, can, jar, tube, etc., that
contains the item sold. It is the last packaging thrown by the consumer.
Secondary Package encloses the primary packaging, such as toothpaste tube in its box.
Transportation Packaging is designed to protect goods that are in transit, especially products
that are shipped by truck or train. However, the supply chain often includes other modes of
transportation as well. Therefore, transport packaging needs to be designed for both the local
conditions and the export conditions if the goods are sent from one country to another.
Unit Load combines individual items or items in shipping containers into single "units" that can
be moved easily with a pallet jack or forklift truck.
Palletization of Loads is a method of storing and transporting goods stacked on a pallet, and
shipped as a unit load. It permits standardized ways of handling loads with common mechanical
equipment such as fork-lift trucks.
Universal Product Code UPC) is a barcode symbology that is widely used in the United States, Canada, United Kingdom, Australia, New Zealand, in Europe and other countries for tracking
trade items in stores. UPC (technically refers to UPC-A) consists of 12 numeric digits, that are uniquely assigned to each trade item.
Electronic Product Code (EPC) is designed as a universal identifier that provides a unique
identity for every physical object anywhere in the world, for all time.
Radio-Frequency Identification (RFID) Technology uses electromagnetic fields to automatically
identify and track tags attached to objects. The tags contain electronically stored information.
Bill of Lading is a document issued by a carrier (or his agent) to acknowledge receipt of cargo
for shipment.
Freight Bill is a carrier's invoice for freight charges applicable to a shipment. Also called freight
invoice.
Freight Claims is a legal demand by a shipper or consignee to a carrier for financial
reimbursement for a loss or damage of a shipment.
Occupational Safety and Health Administration (OSHA) is an agency of the United States
Department of Labor. OSHA's mission is to "assure safe and healthful working conditions for
working men and women by setting and enforcing standards and by providing training,
outreach, education and assistance"
E-Fulfillment is an amalgamation of all the people, processes, and technology employed to deliver an online order to a customer.
Third Party Logistics is a company's use of third-party businesses to outsource elements of the
company's distribution and fulfillment services.
Pick-and-Pack is a part of a complete supply chain management process that is commonly used
in the retail distribution of goods. It entails processing small to large quantities of product,
often truck or train loads and disassembling them, picking the relevant product for each
destination and re-packaging with shipping label affixed and invoice included.
Rules of Origin (ROO) are used to determine the country of origin of a product for purposes of
international trade.
Foreign Standards and Certificates are required fro many products that are sold in multiple countries. This may include performance tests and quality assurance tests, to meet qualification criteria stipulated in contracts, regulations, or specifications (typically called "certification schemes" in the product certification industry).
Most product certification bodies (or product certifiers) are accredited to ISO/IEC Guide 65:1996, an international standard for ensuring competence in those organizations performing
product certifications. The organizations that perform this accreditation are called Accreditation Bodies, and they themselves are assessed by international peers against the ISO 17011 standard. Accreditation bodies that participate in the International Accreditation Forum (IAF) Multilateral Agreement (MLA) also ensure that these accredited Product Certifiers meet additional requirements set forth in "IAF GD5:2006 - IAF Guidance on the Application of ISO/IEC Guide 65:1996".
Less Than Load (LTL) is the transportation of relatively small freight in a truck with products
from other companies.
Harmonized System (HS) is an internationally standardized system of names and numbers to
classify traded products.
Harmonized Tariff Schedule (HTS) is the primary resource for determining tariff (customs
duties) classifications for goods imported into the United States.
U.S. International Trade Administration Commission (USITC) is an independent, bipartisan,
quasi-judicial, federal agency of the United States that provides trade expertise to both the
legislative and executive branches.
Free Trade Agreement free-trade area is the region encompassing a tradebloc whose member
countries have signed a free-trade agreement (FTA). Such agreements involve cooperation
between at least two countries to reduce trade barriers – import quotas and tariffs – and to
increase trade of goods and services with each other.