With continuing increases in governmental regulations regarding the movement of freight, it is difficult to imagine being able to conduct a vigorous trade program without the use of technology and solutions that help keep abreast of current regulations. Rather than maintaining internal staffs dedicated to keeping themselves up to date on the regulations, many freight forwarders, customs brokers and the like find it best for their business to engage with a technology solution provider able to provide tools they in turn use to the benefit of their shipping customers.
Dave Hockersmith, vice president US business & product development for CargoWise edi, a solutions provider, observes this trend to outsourcing for customs and trade data by forwarders, brokers and logistics service providers coming about for several reasons. For one, previously companies built programming internally or went to a few key vendors for applications. “But as supply chains have gotten more complicated and everyone is doing everything, not just focused on one particular vertical market,” he says, “they just don't have the expertise internally to develop and program and build an application that covers all the bases.”
According to Hockersmith, another reason for outsourcing is that older systems can't match the tools and speed that is possible today with a SQL server database and a Windows platform. A case in point is Mach 1 that went live with his company's ediEnterprise solution in February in its US, Mexican and Singapore offices.
With headquarters in Tempe, AZ, Mach 1 Global Services has operations throughout the world and offers a wide range of services across its logistics platforms. Until it put its new outsourced applications to work, Mach 1 was using software that ran on an AS400 and just wasn't capable of keeping up with internal growth and customer demands.
CargoWise explains that its ediEnterprise is a modular set of supply chain solutions designed to automate and streamline operations and management for international providers of logistics and trade services. In the case of Mach 1, modules were aimed at increasing visibility of global shipments, including ediForwarder, ediDocManager and ediWebtracker. CargoWise also provided a number of consulting services with the objective of delivering an end-to-end solution.
“CargoWise edi has vastly upgraded our ability to provide greater supply chain visibility and shipment status reports for our customers,” claims John Gray, vice president of administration for Mach 1. “By replacing our outdated AS400 system with the CargoWise ediEnterprise system we now have the ability to display dispatch and operational data on large screen plasma displays in customer service and national account control centers. The EDI interchange integration with Mach 1 customers also enables us to promote our new capabilities to current customers as well as prospects as we continue to build our international customer base. It's a wonderful new asset for the company.”
In reflecting on changes within the freight forwarding community, Hockersmith feels there has been a change in attitude. Previously many in the business were protective of their data, feeling it had to be controlled only by internal resources. Today, he senses an increasing realization that there is value in outsourcing and in keeping core people focused on the business. In fact, there is even a trend to outsourcing management of data centers and servers.
“We understand that many providers are working on very fine margins,” says Hockersmith. “So we are trying to give them tools to do their jobs better. We can never do their jobs. That's what they are the experts at. But if we can get their people to work a little bit more efficiently, then hopefully they will be productive and profitable.”
As with Mach 1, A.N. Deringer, Inc., a privately held corporation providing Customs brokerage and clearing services, had its own legacy technology solution. “We had an off the shelf product that we self-programmed over the years,” recalls Amy Magnus, Deringer district manager. “It evolved over time and we discovered that regulatory changes and requirements were coming on so quickly we really couldn't keep up with it alone. We saw the need for a partner who could help us have a good IT solution so we could focus on our internal processes to meet the rapid changes.”
The company is very strong along the northern US border. It owns and operates more than 30 offices and distribution centers in the US. Through a global partnership network it facilitates movement of cargo through its primary markets in North, Central and South America, Europe and the Pacific Rim.
Solutions chosen are from Kewill. Ken Halle, chief strategy officer, trade & logistics, for the company notes that Deringer is using Kewill's Customs Brokerage, Freight Forwarding and Forwarding/Export, as well as the multi-carrier solution, Clippership, for handling small parcel shipments. While Deringer does have add-ons, the core of its technology today is Kewill.
US Customs & Border Protection (CBP) has selected Trade Ambassadors to be the point persons for its Trade Support Network for the Automated Commercial Environment (ACE). CBP has selected 11 core members, of which Amy Magnus is one. “The Kewill partnership is important for us because Celeste Catano, the company's principal designer, analyst and developer for its Import and Customs Brokerage software applications also serves as an ACE Trade Ambassador. So I meet with Customs on a very regular basis and am always pleased to have Celeste in the same room with me, sharing the same information I'm hearing at about the same time. There are some very important changes that are coming up quickly and if we're not prepared for those changes, then we are not going to be able to provide solutions to our clients.”
Among the issues looming for traders, points out Magnus, is that starting in early 2009, CBP's ACE Entry Summary, Accounts and Revenue at a Glance (ESAR) will be available for early adopters. CBP explains that ESAR, “will enable the agency and its trade partners to truly interact electronically. Throughout the upcoming years, these enhanced account capabilities, affecting virtually all CBP cargo processes, will bring a dramatic, comprehensive change in the way CBP conducts business.”
Magnus notes that among other things, forwarders and brokers are going to have to completely change the way that they transmit entry-summary data. Halle says, “We pride ourselves here always on having the requirements ready and available for our customers. We have to be 100% compliant and to be ready for, in most cases, the early adopters. The ESAR release in January 2009 is an example. We are currently programming so we can be ready for them. We can let people like Amy worry about dealing with their customers and how to continue to provide them with good service while we worry about the compliance changes.”
“I am comforted knowing that getting our processes in order and communicating with the clients so they understand what is coming and what will be required of them is getting accomplished,” claims Magnus. “I partner with Kewill to make sure they are prepared for me to be able to transmit data, receive responses to that data and analyze it so we can continue to evolve our product to meet our client's needs.”
Deringer has been able to use its Kewill solutions to provide clients with visibility into almost everything it is doing. Traders are able to see where their goods are, how they are moving, when they are released by Customs or are on hold, for inspection by another agency like the Food and Drub Administration, for example.
Another benefit is that Deringer is able to communicate with Customs in a much more paperless environment than previously. The provider offers a great deal of electronic data that does not have to be printed. The lack of a need to print on paper has been a savings for the company and its customers. Imaging, memos and event notifications are immediate, and paperless.
Our company is very happy to have engaged with Kewill,” says Magnus. “We could not have done this alone. There is so much and it is so daunting and quite confusing right now for all of us out here. We are working together and talking together about these changes and preparing for them together. That is very comforting in these uncertain times.”