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Crisis Management: What to Do When Your Import/Export Goes Wrong

Start by asking questions.

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When you import and export, mistakes can happen. How you recover—minimizing time delays and additional expenses—and learn from the mistakes is critical to your future success. Here are two real experiences—one export and the other import related – showing how creative thinking and playing to one’s strengths can provide simple solutions to what could have become a costly disaster.

Exporting to Japan

Many years ago I exported a 20-foot container load of cookies from Chicago to Tokyo to a customer who was eager to distribute them and earn profits from the sale. The cookies arrived on time at the port of entry and were inspected by customs officials to ensure nothing prohibitive for entry into Japan was included in the making of the cookies. Lo and behold, and to my total astonishment, the shipment was flagged. A red dye, No. 40, was found in the red star pinwheel cookies. At the time, Red No. 40 coloring was banned in Japan. That meant that twenty-five percent of the total shipment would be detained.

You can imagine the panicked feeling I had not knowing what to do next. The customer would be upset, and I also knew the delay meant we would not be paid and hence, our cookie supplier would not be paid. This one element set off a chain of events that were all interrelated. One thing never left my mind: There had to be a solution. It was analogous to peeling the layers of onion to get to its core—or in this case—getting to the origin of the problem. Once that was determined, I could figure out what our options were, if any.

The situation was this: The cookies were manufactured using ingredients from several different suppliers. For one of those suppliers, the ingredient legend didn’t match up with what the custom’s spot inspection found. The legend did not list Red No. 40, but the inspectors found it in that batch of cookies. These things—better known as mistakes—can happen from time to time, especially when suppliers move too quickly or try to cut corners on quality control to save money. Needless to say, it caused a tremendous amount of stress for all parties involved.

How did we resolve it? Since it was the supplier’s fault, we asked them to reship an entire new batch of cookies to Japan at no charge. We insisted that their ingredient specification document be accurate and match up exactly to what was in the cookies—and this time—no red dye No. 40. Once that was done, the customer paid us, and we, in turn, paid the supplier. As for the cookies sitting at the Tokyo port, instead of destroying the goods, we rerouted them to a US naval base in Japan (Hiroshima), which did not have the same import restrictions as Tokyo and didn’t ban the Red No. 40 dye. Problem solved. The shipping cost from Tokyo to Hiroshima along with demurrage and customs duty charges were paid for by the cookie supplier.

Importing to the United States

You never know where an issue might occur when importing a product. And you never know how that problem will be resolved. The following story from UPS tells the tale of one importing near disaster.

“Chris Bauer and Tony Huynh were no strangers to challenges. So they didn't balk when their Seattle-based TOCH Agency, which specializes in sourcing and distributing promotional products, was tasked to fulfill a huge and particularly complex order recently. An especially tight turnaround time didn’t help, but the partners were confident they could get the job done.

But the big make-or-break project hit a roadblock because of a manufacturer's error. Suddenly, Bauer had to get 50,000 promotional toy vehicles to nearly 1,000 stores nationwide—and the instruction sheets had been misprinted. Each unit had to be opened and repacked with the correct instructions before then being boxed for shipment.  Desperate, Bauer asked his UPS account manager, Justine Tucker, for help. She didn't let him down.

Bauer gathered an assembly line of 50 people to unload, unpack, repack and reload boxes, while Tucker coordinated several UPS drivers to carry the shipments to the airport in a race against time.”

The moral of the story: Leave no stone unturned when finding a solution. There is always one! And in this case, UPS came to the rescue. But who would have thought that UPS did this kind of work? When in a jam, ask a lot of questions of your team, logistics specialist, banker, accountant and attorney because you never know where your best solution will be found.

Read the full UPS story here.

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