Freight Stories

Freight Stories

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Third parties with access and visibility inside the organization have an advantage in helping to identify cost savings, efficiency improvements and, importantly, compliance issues. While both Scheibner and Graddy speak of the importance of monitoring vendor compliance and performance of service providers, Graddy offers an example of the kind of monitoring and responsiveness that is more important in a post-Sarbanes-Oxley environment and given the heightened security awareness following the September 11, 2001 terror attacks.

Graddy describes an import shipment which was reported to the Food and Drug Administration (FDA). The importer said it was not FDA regulated, that it was just a chemical that removed impurities. From what does it remove impurities, asked the FDA. Water, said the importer, but it's not drinking water. OK, said the FDA, where is that water used? It's used in machinery. Would that be machinery used for food preparation, the FDA rejoined. Yes, was the answer. Suddenly, Graddy points out, this chemical the importer didn't think was regulated actually fell under FDA jurisdiction.

Many companies don't have enough information from further up their supply chain, says Graddy. They put themselves at a disadvantage because they don't understand their commodity [from an import compliance perspective]. Like Scheibner, Graddy sees the need for involvement deeper into the supply chain. "Experience tells me we have importers who don't have enough information further back in their supply chains."

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