TIA (Transportation Intermediaries Association) Conference and Expo

Transportation Intermediaries Association has decided to try something new. From April 9th to the 12th they will host their very first Great Ideas Conference and Exposition. The Expo will take place in Tucson, AZ at the JW Marriott Tucson Starr Pass Resort and Spa.

This ground breaking conference is slated to focus on the great ideas brokers and 3PLs needed to succeed. The first session will host five speakers. Each one comes from within the Association's own ranks. They plan to give short uplifting speeches to get the audience started. From there, participants can go through 16 educational sessions in 4 tracks covering 4 essential areas. These sessions will include fundamental, universal, expansion, and advanced learning.

Participants can mix and match any sessions to create a unique learning experience best suited to each individual need or desire. There are 6 general sessions that will be spread out through the trade show and education sessions with the purpose of furthering insight and knowledge base of all the industry.

 Third party logistics is a $162 billion dollar ever growing industry. The Transportation Intermediaries Association is the foremost supporting professional organization in this industry. The hope that the success of this conference and exposition will keep their market moving ever forward into the future.

Today's market is filled with a constant flux in rules and regulations that steadily affect day to day operations. Knowledge is the edge every business person needs to keep up with the changing times and the TIA wants to help everyone do just that.

We will be in attendance and look forward to seeing you all there!

Cargo Liability Insruance: Should Shipper's Share Liability with Railways

When it comes to Cargo Liability Insurance, North America's rail system is in a quandary.

Firstly, railroad operators are not allowed to refuse any cargo, no matter how hazardous it may be, as long as appropriate regulations are met. Secondly, current legislation deems railways liable for all damages incurred in any railroad mishap and up to an unlimited amount, even if the mishap did not occur due to railroad negligence. This is different from marine and air carriers who may limit their liability as a condition of carriage.

Backed by the Association of American Railroads (AAR), these rules have been under review since a disastrous accident in Quebec, Canada, last July forced a small railroad to file bankruptcy. 

Sixty-three (63) tank cars containing crude oil derailed in Quebec last July. Forty-two people died and the town center was destroyed. Reparations, including clean-up and compensation for death, injury, and property damage, will cost hundreds of millions of dollars. The small railroad, Montreal, Maine & Atlantic, had liability insurance of only $25 million. Overwhelmed by the costs of the accident, the company filed for bankruptcy a month later. 

Some believe the minimum amout of cargo liability insurance required by railways should be raised. This requirement alone may put some small railroads out of business. Others, like the AAR, insist that there simply is not enough coverage possible to adequately address catastrophic events like that in Quebec.

Other measures are taken when shipping hazardous cargo by rail. Trains carrying dangerous materials are designated as "key trains" and held to speed restrictions, prioritized over all other trains on the network, and are routed away from heavily populated areas when possible.

Railroad advocates insist the best solution is shared liability between shipper and railway as a condition of carriage. Such an arrangement will boost coverage in the event of an accident. Some claim it may also motivate shipping companies to take better safety precautions when preparing materials for shipment.

Hazmat shippers disagree, citing their rail transportation rates were already increased in order to compensate for risks. Shippers also claim that keeping liability assigned to railroads maintains higher standards for safety and accountability.

FMCSA (Federal Motor Carrier Safety Administration) Now Has Authority to Shut Down Noncompliant Carriers

Beginning February 21, 2014, the FMCSA (Federal Motor Carrier Safety Administration) will have the power to shut down any carrier with a demonstrated pattern of egregious noncompliance with federal safety rules.

Under the new rule, the FMCSA may suspend or revoke the operating authority of carriers who repeatedly violate safety regulations. It is also designed to better facilitate identification of chameleon or reincarnated carriers, who operate multiple entities in order to hide a failure to comply with federal safety regulations.

Notice of the proposed rule was first published in November 2012, and FMCSA welcomed public comment for 60 days. Many in the industry voiced concern that the pattern of noncompliance was not clearly defined. FMCSA responded that each organization called into question would be considered on a case-by-case basis. Furthermore, enforcement of the new rule was best performed with room for discussion and discretion.

The agency best defines "egregious" acts of noncompliance as more than simple negligence. Instead, the full text reads: "a willful, and possibly repeated, attempt to avoid compliance or shield noncompliance."

If a carrier is found to be in habitual noncompliance, the FMCSA will give notice to the carrier of potential consequences. The carrier then has the opportunity to respond and rectify the situation. 

The intention of the new rule, as the agency explains, is to target high-risk carriers and better insure the safety of travelers. 

The new rules comply with the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) and the Moving Ahead for Progress in the 21st Century Act (MAP-21). 

For the full text of the rule and to read industry comments and agency responses, visit the Federal Register: Patterns of Safety Violations by Motor Carrier Management.

International Freight Forwarding Group Advocates for Logisics Industry Input in UN Goals

The International Federation of Freight Forwarders Associations (FIATA) has advised the United Nations (UN) to seek more input from the logistics sector in the creation of their post 2015 Sustainable Development Goals (SDG). Noting that the emphasis on the logistics industry in the current plan is insufficient, FIATA asserts that the expertise of those in the International Freight Forwarding logistics industry is central to boosting the global economy and achieving sustainable growth.

The UN's Rio+20 Conference, held in Brazil in June 2012, resulted in an agreement to launch a process to develop a set of (SDGs), building upon the UN's eight Millennium Development Goals. (The Millennium Development Goals address extreme poverty, HIV/AIDS, gender equality, maternal health, childhood mortality rates, education, environmental sustainability, and global partnerships.)

FIATA's position is based on the imitation lag hypothesis and the life cycle (product cycle) theory. Simply put, imitation lags--delays--occur when one country does not have the technology to adopt and diffuse the imported technology of another country. The life- or product cycle theory describes the trajectory of a new product or technology. It is created in Country 1, matures and is shared with economically similar countries. Production standardizes and is outsourced to developing countries. FIATA asserts that the logistics sector is central to international trade and drives global economic prosperity.

In a position paper published by FIATA, the organization states that their global go-between position affords them unique insight into national policies and the limitations of those policies to have impact on local international communities. FIATA says the relationship between national policies and local economies--and their impact on multiple sectors--needs further analysis before appropriate SDGs can be achieved.

In addition to increased input of the international freight forwarding logistics industry, FIATA has urged the UN to involve many civil societies and relevant stakeholders in their discussions. 

Important Differences Between NVOCC (Non Vessel Owned Common Carriers) and Freight Forwarders

There are a number of interchangeable functions between NVOCCs (Non Vessel Owned Common Carrier) and freight forwarders.  However, in certain situations they have important differences which affect transportation protocols.  Knowing the differences can save time and unnecessary paperwork.

• NVOCCs often both own and operate their shipping containers.  At times, they also lease containers for their use or on behalf of others.  This capability allows them to cutout the middle man and makes the shipping process more efficient.  Freight Forwarders cannot operate this way.
• The United States and certain other countries require NVOCC operators to report their tariff to the proper government branch, thus creating a public tariff. There is a range country specific rules, including who is the designated point of contact and when contact is to occur.  Freight forwarders are not required to operate this way.
• Based on where they are operating, NVOCCs may have to assume the status of a virtual carrier.Depending on the jurisdiction, the NVOCC may be required to accept all the liabilities of the carrier.  Although this adds risk and responsibility to the NVOCC, it is considered to be worthwhile.
• Freight forwarding companies may act as either an agent or partner for a NVOCC.  The NVOCC does not need to be the agent or partner of a freight forwarding company.  This provides more flexibilty and allows NVOCCs to adjust based on the situation.

NVOCCs are frequently termed ship less shipping lines, acting similar to a common carrier, except that an NVOCC does not operate the vessel transporting the container.  The NVOCC brokers space on ships for the aggregate volume of its clients.  Volume garners lower rates which they then pass on to their shippers.  Shippers might choose the services of an NVOCC to avoid damage liability.  The NVOCC can be deemed a carrier who works for shippers and also a shipper to the carriers.

The services provided by a freight forwarder can also be undertaken by the NVOCC.  This includes having personnel available to handle the inland shipping when it reaches its destination, arranging for insurance on behalf of clients and clearing customs (end to end logistics).

FMCSA (Federal Motor Carrier Safety Administration): Safety Rules Coming in 2014

The trucking industry is expecting finalization for two major safety rules early in 2014: 1) mandated electronic logs (e-logs); and 2) a searchable database with driver drug and alcohol tests. A third is on-tap for later in the year: carrier safety fitness.

Mandated E-Logs

A great deal of controversy has surrounded the issue of e-logs--also referred to as electronic onboard recorders. Many drivers reference similar devices in the past as avenues for coercion, describing log boxes that beep every hour and require input during delays and sleeper berth time. Many consider the harassment responsible for driver sleep deprivation and therefore detrimental to highway safety.

The FMCSA (Federal Motor Carrier Safety Administration) conducted lengthy surveys regarding the potential for coercion and possible measures to protect against it. Survey results are being used to develop a coercion plan. This plan will be publicized via a Notice of Proposed Rulemaking early 2014 and then opened for public feedback.

Searchable Database for Alcohol and Drug Tests

This proposal will require employers to report all positive test results and refusals to a clearinghouse. A prospective employer may--with the applicant's permission--access the database for individual records.

The database would be maintained by a third party, and records would come with rigorous privacy measures. Any driver testing positive would be required to complete a return-to-duty process and that would be reflected in the database.

Although employers would pay a fee to access the clearinghouse, drivers would be able to access their own records for free. Dispute and appeal procedures will be part of the final rule.

As with mandated e-logs, the final rule will be posted by notice and then opened for commentary.

Later in 2014...

A third major safety proposal is not expected to reach notice until later in 2014: standards for carrier safety fitness. As part of the Compliance, Safety, Accountability (CSA) Program, data in the Behavioral Analysis and Safety Improvement Categories will be used to determine whether or not a carrier is fit to operate.

Ocean Freight E-Commerce Standards for International Freight Forwarding

The EIPP Standards Advisory Board, established in 2010, is comprised of a self-funded global team of ocean industry leaders.  Conceived as a neutral forum for the top ocean carriers and international freight forwarding executives to partner with customers; its purpose is to expedite e-commerce best practices for success in a digital world.  This independent body has regular meetings to collaborate on, and advance e-Invoicing messaging and process standards for ocean freight commerce.  This November, the organization focused on enhancing the best practices already under development.  The discussion centered on three such processes.

One of the items on the agenda was A Payment Advice Process for invoice payments including the use of electronic messaging to provide remuneration information to collectors.  The process will ensure that all participants share understanding of how using remittance messages can automate IT processes for payment applications and proper payment verification.

Another discussion covered A Credit Note Process to streamline the issue and sending of electronic credit notes whose purpose is to correct prior invoices or shipments from ocean carrier to shipper.  In this case, it helps create a converged understanding of the process for exchanging messages in the ocean freight industry. It also supports the automation of credit note acknowledgement, confirmation, accounting, auditing, and reporting for tax purposes. 

Recognizing the value of electronic invoicing in enhancing customer collaboration, efficiency and cost savings;  the players in the ocean freight industry are becoming more demanding of improvements.  Further development of relevant EDI message guidelines will encourage adoption and sustained e-invoicing in ocean freight commerce.  Electronic invoicing standards which satisfy market demands will lead to instant information delivery, automatic routing to the appropriate parties and improved lead time for speedy invoicing.

Every day millions of tons of freight travel the globe.  Every step produces documentation related to logistics, schedules, exports, imports, custom clearance, duties and more.  Requiring critical focus, the management of information in ocean shipping is uniquely challenging due to the complexity of rate and contract administration.  Embracing established best practices of the latest developments in e-commerce will help advance and streamline the international freight forwarding industry