Insights into Complexities of Managing Secure Global Transportation for the Government
Operating one of the largest supply chain and logistics operations on behalf of the government, General Dynamics IT, a 2017 Inbound Logistics Top 100 3PL Provider, functions as a 3PL provider and is responsible for the shipment of goods around the world to high-threat and isolated posts. In addition to meeting contract door-to-door terms and strict service level agreements, the company also successfully navigates the complex and changing regulations and licensing of United States exports. The client's end users can choose products from a 6,200-item catalog as well as original equipment manufacturer parts and anything else they might require from commercial vendors.
"We purchase all products without forecast data, which represents a significant financial risk that's uncommon in other relationships," Nisa Moore, General Dynamics IT senior director of operations said. "Even with a government contract, we deal with speed to market. Our customers expect the same fast service and shipment visibility as they get when they shop online."
Managing the Risk of Door-to-Door Shipping
General Dynamics IT is responsible for procurement, domestic and international door-to-door shipping and the final delivery of all products. Compared with the normal "door-to-port" service, this creates additional risks and challenges.
The company manages all aspects of the transportation logistics for the contract, from a vendor's delivery to the customer receiving point and customer transfers domestically and internationally. For international shipments, the customer is responsible for submission of import documentation, as required by the local government. All other aspects of the shipment, including all associated costs, are handled by General Dynamics IT. The chain of custody is vital, as well as the reliance on trusted agents and freight forwarders for in-country expertise.
"In our experience, freight forwarders are more familiar with door-to-port. Similarly, parcel carriers tend to be less familiar with the requirements of door-to-door shipping, leaving airfreight shipments at the airport if there are clearance issues. To overcome this, we have established a robust process to reduce customs and port delays," said Chris Makowski, transportation manager at General Dynamics IT.
Export Regulation Compliance
General Dynamics IT manages shipments which range from single parcels to airfreight boxes to full 40-foot containers, all of which falls under the International Traffic in Arms Regulations (ITAR) or Export Administration Regulations (EAR).
The company has developed a strict process to ensure international shipments are in compliance with all United States export regulations. They have a dedicated team that triages every international shipment and will manage the process if export licenses or exemption requests are required.
The State Department is charged with controlling the export and import of defense-related articles and services on the United States Munitions List (USML) under the ITAR. The ITAR regulates products and services that are for military purposes including electronics, navigation, computer security, maritime, aviation and other technologies.
The Commerce Department enforces the EAR for commercial items, but also items that have dual use for civilian or military purposes. The level of control depends on the country being exported to, destination party, end-use and Export Control Classification Number.
Any company that accepts being a supplier for a USML prime exporter must certify themselves as operating in accordance with ITAR.
Engage an Experienced Team
"For a complex global logistics network, an experienced, knowledgeable and flexible team is the best asset you can have," Moore said. "The key to a successful global supply chain is to have experienced logistics personnel, a knowledgeable network of forwarders and agents with worldwide reach. To effectively manage the complex web of global shipping, we have developed a strategy that combines commercial best practices and the unique nature of government contracts, and over several years we have successfully established a committed global team with clearly defined procedures and expectations."