WCA eCommerce 1st Annual Conference - Workshop 2
Topic: eCommerce Risks & Liabilities USA Shipments: Cross Border Regulatory issues and limiting your Liability for eCommerce.
Speaker: Bob Imbriani
Executive VP, International
Team Worldwide USA
WCA eCommerce Workshop 2: eCommerce, Risks, Liabilities, Challenges and Opportunities
1. E-Commerce, Risks, Liabilities, Challenges and Opportunities
for The Freight Forwarder
Prof. Bob Imbriani
Executive Vice President, International – Team Worldwide
1st ANNUAL
CONFERENCE
HYATT REGENCY MIAMI
3. There are many elements for a freight forwarder to
consider as you enter into e-commerce
The following are a few of these items, which we will
discuss:
Who are the potential customers?
IT Issues
Freight Issues
Export Regulatory Issues
Import Regulatory Issues
Liabilities
4. By understanding the areas of risk and regulatory concern
and taking a proactive approach, you can minimize the
barriers to entering into e-commerce
There have always been inequities with how various
regulations apply to traditional Freight Forwarders/Customs
Brokers and how they apply to integrators, couriers and even
postal services. These can be overcome through knowledge,
training, coordination with the customer and adopting
proper operating and compliance procedures
5. Who are our potential customers?
There are several groups of potential customers. These
include:
Large internet e-commerce companies such as Amazon,
Alibaba and others
Smaller regional or single country customers
A single company who is looking to sell B to B or B to C.
The greater opportunities for the forwarder may actually
exist with the smaller e-commerce customer but all present
regulatory and liability concerns.
6. IT Issues
In the area of IT, there are a number of issues that exist:
Receiving in the warehouse for assembly
Receiving in the warehouse for distribution
Matching the above with customer orders and shipping
instructions
Producing the needed shipping documents
Tracking deliveries
Producing labels
Other
7. IT Issues (cont’d)
These issues can present challenges related to investment
costs, liabilities for lost, misrouted, damaged cargos, etc.
They can be overcome by:
Using a customer’s system with EDI links into your
operating/warehouse system
There are vendors out there offering program solutions
Making some programming changes to your existing
system
Other options?
8. Freight Issues
The freight issues can vary by country of origin, destination,
commodities, size, shape and type of packaging, such as:
Products arriving in packaging not suitable for shipping
Too much volume cargo
Possible HazMat/Restricted Articles
Lithium batteries
Perishables
Inconsistency of volumes
Non competitive delivery rates
9. Freight Issues (cont’d)
Some ways to address these issues are:
Over packing cargo into containers, D, E, Airline, etc.
Have a loading plan for matching volume and non
volumetric cargo into the over packs
Establish written procedures in advance with the
customer as to what types of cargos cannot be handled
Establish minimum volumes and rates with the client
Do not hesitate to tie into postal systems & integrators
Other options?
10. Export Regulatory Issues
These will vary by country, but using the US as an example:
Complying with security programs such as Known
Shipper
Who will be the USPPI/Exporter of record
How will you determine the harmonized classification
and value for each item for export filings such as the EEI
Who will be the shipper on the house bill
Creating a proper manifest
What will be used as the commercial invoice
11. Export Regulatory Issues (cont’d)
Certifying any goods as non restricted or HazMat
Do any goods require export licensing or have any
specific export control; classification
Do any of the items require special documentation
Sales tax issues
Does the seller know the goods will be exported and is
there any possible violation of distributor territories
Other?
12. Export Regulatory Issues (cont’d)
Some Options to consider:
Have overseas customer set up a legal entity in the
origin country
Do you have proper powers of attorney/letter of
authorization
If you will be shown as the shipper, be sure to obtain
proper indemnification from the client
Be sure to have cargo aircraft options
Agree on classification and value procedures with the
client in advance
13. Export Regulatory Issues (cont’d)
Some Options to consider(cont’d):
Have a regulatory person review cargo for classification
and control issues upon receipt of orders
Create a list of commodities that may present concerns
Know who the sellers are
Establish your receiving location in a tax friendly area
Other
14. Import Regulatory Issues
These issues will again vary greatly by country:
Who will be the importer of record
Are the declared values correct
What are the import rules for e-commerce shipments
regarding commodity, value, number of
shipments/orders per receiver (IE: in the US under
Section 321, the value limit is USD$800.00)
Are there any commodities that require other
government agency release
15. Import Regulatory Issues (cont’d)
Who is responsible for any duties, taxes, inspection fees,
etc.
Are the goods properly classified
Is the country of origin properly declared for each item
Are there any import bond issues
What are the procedures if goods are denied entry
Other
16. Import Regulatory Issues (cont’d)
Some options to consider are:
Establish all procedures with the account prior to the first
shipment
Establish the client as a non-resident importer of record if
possible in advance or have them setup a legal entity in
country to be the import of record
If VAT/GST, etc. is an issue, setup the proper accounts in
advance
Be sure documents have proper value and countries of
origins
17. Liability Issues
Our previous topics raised issues related to liabilities such as
fines and penalties from government agencies and others.
The following relates to cargo liability:
Liability for lost cargo
Liability for damaged cargo
Liability for refused cargo
Liability for mis-delivered cargo
Other
18. Liability Issues (cont’d)
Some options:
Establish very specific limits of liability with the client in
advance and in writing. Do not rely only on your standard
terms and conditions
Encourage the client to obtain their own cargo insurance
Work with your insurance agent/underwriter to be sure
you have proper coverage for the type of shipments you
will be handling as e-commerce
Other
19. Conclusion
E-commerce is changing the freight world and there are
tremendous opportunities for the Freight Forwarder. The
intent of this presentation was not to be negative or
discourage entering into the world of e-commerce. It is
intended to help identify some of the areas that will need to
be addressed in advance so that your entry into e-commerce
will be successful and profitable.
Thank You!
For your attention and participation
Bob Imbriani – bob.imbriani@teamww.com