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

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

2. E-Commerce, Risks, Liabilities, Challenges &
Opportunities
For The Freight Forwarder

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

20. THANK YOU!
1st ANNUAL
CONFERENCE
HYATT REGENCY MIAMI