Tuesday, April 7, 2020
Ashianna Esmail’s employer, the San Francisco-based freight forwarder and customs brokerage Flexport, says a sophisticated software platform is its ace in the hole for moving cargo.
But while a company should strive to keep up, even ahead, of the rising tech curve, Esmail, the deputy general counsel, says the old-school approach can sometimes be the only viable approach for quick action in the industry of moving goods across borders and oceans.
Such was the case earlier this year in China when COVID-19 was going from regional concern to global crisis. Regulators and rules-makers there padlocked a couple Flexport warehouses, demanding proof that the shipper was complying with fast-evolving and very stringent regulations about sanitization and security.
Rather than sending PDFs to the central government, Esmail says good old paper documentation was most efficient, as regulators were often on the road, between site visits.
With Esmail in constant communication from San Francisco with her counterparts in China, the legal staff across the Pacific dusted off fax machines, printers and 3:1 scanners to provide hard-copy proof that Flexport’s warehouses were indeed in compliance—and got results.
“Small things do matter, and that includes getting documents to governments that may not be up to date with their own software.”
“Our warehouses were among the first closed in China and the first to reopen,” Esmail explains. “Small things do matter, and that includes getting documents to governments that may not be up to date with their own software.”
Sure, it seemed like going back in time for a company that wants its software to raise the bar in data efficiency and security on the trade front. But just in the U.S., many attorneys will tell you how the public sector lags in adjusting to new times.
“You’ve also got to know the local directives and have respectful relations to regulators closes to the scene,” Esmail goes on to say. “You can’t always rely on digital communication.”
Under the best of condition, there’s a lot of documentation importers must provide to satisfy a slew of Chinese agencies, among them: Customs; Ministry of Commerce, People’s Republic of China; General Administration of Quality Supervision, Inspection and Quarantine; China Food & Drug Administration; Foreign Exchange Bureau; and Administration of Taxation.
And any deficiencies in communication may present a double whammy for an international shipping industry that could be feeling long-term effects of the plummeting volume of China’s outbound cargo, as so many of the country’s major manufacturers have had to suspend operations.
Neither is this necessarily a new scenario, as even before coronavirus, the global supply chain was affected by manufacturing moving away from China—a partial consequence of the tariff war with the U.S.
All of which may raise the stakes of the export-import business with China, and much as shippers may strive to be forward-thinking, circumstances can’t help but put them in at least partial reactive mode.
“You’ve got to think ahead—three days, five days, 10 days,” Esmail advises. “Have a plan, an agile plan, for each scenario.”
And be prepared to do the documentation the old-fashioned way, if need be. Though its exports may be decreasing, China remains the United States’ top trading partner with nearly $5 trillion in goods moving both ways across the Pacific. Neither country wants that merchandise confined to a warehouse, especially if perishables are included in the parcels.
Or toilet paper.