MASTERING IMPORT & EXPORT MANAGEMENT SECOND EDITION This page intentionally left blank MASTERING IMPORT & EXPORT MANAGEMENT SECOND EDITION Thomas A. Cook with Rennie Alston and Kelly Raia • MajorIssuesinGlobalSupplyChain Management • (cid:2) MainFeaturesoftheIncoterms 2010 • NewTSARegulations • Documents,Operations,&Procedures • RiskAssessment&Mitigation • Import& ExportManagementTools American Management Association NewYork•Atlanta•Brussels•Chicago•MexicoCity•SanFrancisco Shanghai•Tokyo•Toronto•Washington,D.C. Bulkdiscountsavailable.Fordetailsvisit: www.amacombooks.org/go/specialsales Orcontactspecialsales: Phone:800-250-5308 Email:[email protected] ViewalltheAMACOMtitlesat:www.amacombooks.org Thispublicationisdesignedtoprovideaccurateandauthoritative informationinregardtothesubjectmattercovered.Itissoldwiththe understandingthatthepublisherisnotengagedinrenderinglegal, accounting,orotherprofessionalservice.Iflegaladviceorotherexpert assistanceisrequired,theservicesofacompetentprofessionalperson shouldbesought. LibraryofCongressCataloging-in-PublicationData Cook,ThomasA. Masteringimport&exportmanagement/ThomasA.CookwithRennieAlstonandKellyRaia.— 2nded. p. cm. Includesbibliographicalreferencesandindex. ISBN-13:978-0-8144-2026-3 ISBN-10:0-8144-2026-5 1.Exports—Management. 2.Exportcontrols. 3.Foreigntradepromotion. 4.Imports— Management. 5.Internationaltrade. 6.Exports—UnitedStates—Management. 7.Export controls—UnitedStates. 8.Foreigntradepromotion—UnitedStates. 9.Imports—UnitedStates— Management. I.Alston,Rennie. II.Raia,Kelly. III.Title. IV.Title:Masteringimportandexport management. HF1414.4.C665 2012 658.8(cid:2)4—dc23 2011035514 (cid:2)2012ThomasA.Cook. Allrightsreserved. PrintedintheUnitedStatesofAmerica. 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Printingnumber 10 9 8 7 6 5 4 3 2 1 Contents 1 Major Issues in Global Supply Chain Management Today 1 Section One: The Global Supply Chain 37 2 Purchasing Management Skill Sets in Foreign Markets 39 3 Freight, Logistics, and Specialized Transportation Issues for Import/Export Managers 47 4 Risk Management in International Business 102 5 Technology in Global Trade 132 6 Global Personnel Deployment and Structure 146 7 Developing Resources in the Import/Export Supply Chain Management 155 8 Essential Overview of Import/Export Compliance and Security Management: Post 9/11 169 Section Two: Export Operations 185 9 Export Issues 187 10 Export Management: Incoterms, Documentation, Compliance, Operations, and Export Supply Chain Skill Sets 200 Section Three: Import Operations 233 11 Future Import Issues 235 12 The Import Supply Chain: Purchasing, Operations, Documentation, and Compliance Management 252 v AmericanManagememtAssociation•www.amanet.org vi Contents 13 Import Strategies in Maintaining a ‘‘Compliant and Secure’’ Inbound Supply Chain 268 14 Bureau of Customs and Border Protection: Compliance and Security Expectations: Post 9/11 275 15 Getting on Top of the Regulatory Challenges of the Future 280 16 Concluding Remarks 286 Appendix 289 Index 665 AmericanManagememtAssociation • www.amanet.org MASTERING IMPORT & EXPORT MANAGEMENT SECOND EDITION This page intentionally left blank 1 Major Issues in Global Supply Chain Management Today The book opens with a view of current world events that impact global supply chains,importandexportoperations,andtheentireresponsibilitiesthatbusiness executiveshaveintradecompliancemanagement. 2011andinto2012haveseenanumberofshiftsinworldpolitics,MiddleEast stability, and major physical occurrences that have huge short-term impacts on globaltrade,andtheseimpactsmayextendintothefutureforyearstocome. Overview PhysicalEvents TheearthquakeinJapanhasrockedtheworldinanumberofways.Perhapsmost important,thelong-termutilizationofnuclearpowerisverymuchinjeopardy. Theimpactofthedevastatingtsunamithatfollowedgoesfarbeyondthetragic loss of life that occurred. The insurance community who insured the risks involvedwith botheventswillhave topayhundreds ofmillion in claims,poten- tiallyinexcessofseveralbilliondollars.Thiswillimpactinsurance costsandthe availabilityofcertaintypesofinsurancesinrisk-pronecentersoftheglobeaswell asforfreightthatmovesoncertaintradelanes.Costandavailabilitywillbecome majorissues. Personnel involved in international shipping and logistics who had freight coming in and out of Japan are witnessing great delays in transit times, limited accesstotransportationinfrastructure,andincreasesinfreightcharges. Shipping managers worldwide have looked at this disaster in Japan and have already begun to access risk management alternatives not only in earthquake- prone areas, but in all corners of the globe where there are significant physical riskssuchasbutnotlimitedto: • Earthquakes • Floods • Tornadoes • Hurricanes • Harshchangesfromwintertosummerweatherpatterns • Tsunamis 1 AmericanManagememtAssociation•www.amanet.org