Logistics Mistakes To Avoid In 2018
Managing the damages arising from fundamental errors in logistics is costlier than investing in measures aimed at identifying, monitoring, and eliminating or preventing potential mistakes. So, if your goals include cutting cost, saving time and staying competitive, the proactive approach to managing potential errors in logistics is a far better option than the reactive (damage control) approach.
To guard against costly mistakes and fundamental errors in logistics, one must first understand their nature and diversity. That is why we have outlined the following as the commonest logistics mistakes to avoid in 2018:
- Basic Documentation Errors: The key documentation errors that must be avoided include those of Form-M, Bill of Ladings/Airway Bills, Packing Lists, and Commercial Invoices. Bills of Lading/Airway Bills are important because they provide detail of the type of goods, quantity, countries of origin, destination of goods being carried and consignee(s), classification of goods. If information provided are found to be misleading, inaccurate or contain errors in weight or wrong description of goods, it would lead to very costly sanctions and confiscation of goods.
- Under-Valuation: Since the total value of all items in your shipment determines the duty payable, failure to accurately capture it in your commercial invoice, will attract dire consequences.
- Wrong Invoice Value: Since commercial invoices are required for international shipping, accurate information such as: Date and terms of sale, quantity of goods, weight or volume of items in the shipment, description of goods, per unit value of items described, insurance cost and shipping charges are required. This is so because a 3PL provider like Fortune Global will be led into wrong invoicing if consignees fail to provide accurate information. This will attract customs queries, stiff sanctions, and bring your providers to some disrepute.
- Wrong HS Code: This is the code that helps with the accurate definition and classification of goods. It helps to determine the right tariffs, duties, eligibility for exemptions, qualification of approved manufacturers and calculation of additional taxes where necessary. Harmonization Systems (HS) codes ensures consistency between Standard Organisation of Nigeria (SON) and Customs via the Nigeria Single Window for Trade. That is why importers need to declare the accurate HS codes for their goods at the Form-M stage, prior to SONCAP certification.
- Non-Compliance: Reluctance to comply with regulatory standards will attract dire consequences. Importers must collaborate with their agents to comply with all documentation requirements by Customs, Standard Organisation of Nigeria (SON), NAFDAC and so on. Failure to do these or attempting to cut corners with non-compliant clearing agents and their conniving regulatory agents, would attract strict sanctions, reputational damage and more cost.
- Wrongful Declaration of Country of Origin: If declarations as to origin are wrong, or simply cannot be proven or documented, huge sanctions including seizure of the goods in question will be attracted.
- Engaging Unregulated Agents: Engaging unregulated and self-serving clearing agents (posing as freight forwarders) is a very serious mistake and a major reason the industry is largely characterized by a lot of cageyness and mistrust between regulators and freight forwarders. They are largely non-compliant, disorganized, un-refined, inept and fall-short in the capacity to manage the complexities of 21st century logistics and freight management. Their activities explain why multinationals view the average Nigerian Freight Forwarder as incompetent and non-compliant (which is not the case).
- Incurring Excessive Operational Cost: This can arise from poor operational planning – leading to poor execution or engaging in costly activities; with little or no consideration for effectively managing cost and achieving your target. So, you must engage highly competent 3PL providers if you must cut cost, save time and remain logistically competitive.
In conclusion, while one agrees that experience is the best teacher, learning the hard way is a lot more painful than seeking to understand the broad range of mistakes that could occur when the wrong approach to managing logistics is adopted. That is why you need to engage a 3PL provider with the right pedigree, proven capacity and expertise to handle your end-to-end logistics. You do not need to look to far. Fortune Global is your strategic partner of choice in providing a competent solution to your logistics needs and help you to permanently stamp-out potential logistics errors.