The Inn at the Presidio will be located in Pershing Hall, a historic bachelor officers’ quarters building originally constructed in 1903.  The Presidio Trust is leading the rehabilitation of the building in partnership with the Architectural Resources Group. The project includes 22 guest suites, a reception/lounge in the historic officers’ lounge, and a dining room in the historic officers’ mess hall.  The interior design and furnishing highlight historic elements, while integrating new elements that embrace the modest character of the building.  The project is targeting a LEED Gold rating.  FF&E is being purchased through Ramsey Purchasing.

About Ownership: The Presidio Trust was established by the United States Congress in 1996 to administer the Presidio of San Francisco, an urban national park site located at the base of the Golden Gate Bridge. The Presidio is one of the largest and most ambitious historic preservation projects underway in the United States. For more information: http://www.presidio.gov

About Purchasing: Ramsey Purchasing is a San Francisco based firm, specializing in Furniture, Fixture and Equipment (FF&E) purchasing management services and related consulting for the hospitality industry. Since 1987, they have developed a reputation as a reliable, on-time and savvy purchasing firm.  For more information, visit http://www.ramseypurchasing.com

About Audit Logistics, LLC:  a Denver based freight and warehouse management company that mainly services the hospitality industry.  The company benefits hotel owners by offering web-based reporting, low costs, and green programs for both freight and warehousing. For more information please contact Matt Sysko at msysko@auditlogistics.com.
 

Westin Long Beach is located one mile from the beach with many of the 469 guestrooms and suites facing beautiful harbor views.  Guests take comfort in the Westin Heavenly Bed® and enjoy Starbucks® coffee.  Local attractions include the new Aquarium of the Pacific, many top restaurants and a lively night life.
 

Audit Logistics, LLC is a Denver based freight and warehouse management company that mainly services the hospitality industry.  The company benefits hotel owners by offering web-based reporting, low costs, and green programs for both freight and warehousing. For more information please contact Danñelle Whatley at dwhatley@auditlogistics.com.
 

By Andre Esteves – Project Manager

The US Customs and Border Protection Agency (CBP) have officially begun full enforcement of the new Importer Security Filing regulation on January 26, 2010, and non-compliance could cost you quite a bit in fines. The new customs regulation, commonly known as the “10+2” initiative, requires importers and carriers to provide additional advance trade data to CBP as part of the Security and Accountability For Every Port (SAFE Port) Act of 2006, for non-bulk cargo shipments arriving into the United States by vessel. It is important to know that the purchaser could be held ultimately responsible for timely filing of the ISF and not even know it.

The CBP, for the purposes of ISF filing, defines an importer of record as the party causing the goods to enter the limits of a port in the United States. In other words, when you issue a Purchase Order to a foreign entity you are in fact causing the goods to enter the US. Regardless if you are acting on behalf of a client, you are the importer of record responsible for filing the ISF and any fines due for late filing or incorrect data. The penalty imposed by the CBP is $5,000.00 in liquidated damages for a late filing, or $5,000.00 per error on an improperly filed ISF. There is no statute of limitation on these penalties and you could potentially be held liable for fines years after the fact.

So what is the Importer Security Filing?

The reason the ISF is known as the “10+2” initiative is because it consists of 12 data elements; 10 from the importer + 2 from the carrier. The data elements the importer is responsible for are as follows:

1. Importer of Record Tax ID Number
2. Consignee Tax ID Number
3. Seller Name and Address
4. Buyer Name and Address
5. Ship to Party
6. Manufacturer Name and Address (per line item)
7. Country of Origin (per line item)
8. Commodity HTS-6 Code (per line item)
9. Container Stuffing Location
10. Consolidator Name and Address

The ISF must be filed electronically at least 24 hours prior to vessel loading. It must be filed via the Automated
Broker Interface (ABI) and therefore the actual filing task is typically assigned to a representative of the importer
who is in the ABI system, such as a customs broker.

Navigating Around the ISF

The ISF regulation is not as scary as it may seem and can be easily managed by working with a good US customs broker and cooperative vendors. However, some purchasing firms do not want the added responsibility and risk. Thankfully there are options, albeit limited and perhaps not very cost effective.

According to the ISF regulation, the PO issuer is the ultimate responsible party and importer of record. One way to effectively transfer the importer responsibility of the ISF regulation is to issue PO’s to domestic entities and use domestic terms of sale. If that entity brings the merchandise into the United States from their offshore plant then they are considered the importer of record and will be responsible for customs compliance.

Another option would be to bring in goods to the United States via air or ground freight since the ISF only applies to Ocean cargo. These are viable options for product imported from Canada or Mexico for ground freight and smaller purchase orders for air freight. In any event, these options will drive up costs while reducing risk and now more than ever purchasing firms should carefully consider their options and plan ahead to avoid unexpected cost exposure for years to come.

By Matt Sysko

Freight claims can be a bit scary at times. Admit it, it’s a nightmare! Who damaged it? How did it get damaged? Was it the carrier’s fault? Concealed damage?How do I get it replaced? Will I be compensated for it?

Hi, I’m Matt Sysko, Audit Logistics Freight Claims and Research Manager. I’m here to explain the claims process and some exciting new updates within ALOT©, our online tracking inventory tool.

As you already know there is potential for damage in any shipment. Despite everyone’s best efforts to avoid accidents, they do happen. The contents of apackage can become damaged for a variety of reasons, such as inadequate packaging, weather, a traffic accident, or improper handling by the carrier.

Freight Claim Processing in ALOT©

Processing claims involves several steps, including, gathering documentation, and entering the claim in a tracking environment, submitting the claim,generating follow‐up to the carrier’s letters, generating claim forms and entering claim updates throughout the “life” of the claim. There are numerousfeatures within ALOT© that assist me with freight claim processing.

Freight Claim Reporting in ALOT©

ALOT© provides a number of management reports that assist me with tracking claims and determining the efficiency of our carriers. It also includes reportsbased on claim status, reason for closure, and amount recovered. There are also accounting reports, including specific details and performance charting.These reports will be sent out quarterly or when a close out is requested by the purchasing agent. The reports have several different delivery formats: AdobeAcrobat PDF (*.pdf), Microsoft Excel (*.xls), Internet HTML (*.htm), and Rich Text Format (*.rtf).

Life of a Claim

As you can tell, a very specific claims process has to be followed with the carrier to ensure that full compensation is received for the damaged items under theterms of the carrier’s insurance. Each claim process will be specific to the item(s) damaged and whether or not it can be repaired.Contacting your Audit Logistics Project Manager immediately to notify them of the damage is the first thing that must be done. To be safe, it is important tocall as soon as possible, preferably within 15 days. You then will be informed of the next steps in the claims process. Missing a deadline can cause the claim tobe delayed or immediately dismissed without further consideration.

Claim Filing Checklist

Prior to submitting your claim, please ensure it includes the following information:

• Description of the damage and an explanation of how it happened
• Complete original invoice, showing all discounts
• Repair invoice (if applicable)
• Inspection report (if applicable)
• Pictures clearly showing the damage

Important Terms

Cargo Claim: A “Cargo Claim” is a demand made upon a transportation company for payment, due to freight loss or damage alleged to have occurred while shipment was inthe possession of carrier. Pursuant to the National Motor Freight Classification (NMFC) Uniform Bill of Lading, all cargo claims must be filed within 9 months.

Concealed Damage Freight Claim: Internal damage not apparent until the package has been opened, you only have 15 days after delivery of the shipment to report any concealed damage. Ifyou do not report within this 15­day period, the carrier may decline the claim.

By Luke Dobson

Ocean carriers are set to continue implementing rate increases after the rise on 15th October, with a review of the rates expected on 15th November which may result in a GRI for December 1st, as well as another GRI likely on January 1st. These increases seem to be affecting all major trade lanes, particularly Asia to Europe and Europe to USA. In order for shipping lines to obtain their desired rate levels, they continue to increase demand in the market by removing vessels from various loops, therefore limiting the space on board the vessels remaining on the service. Just in the last week alone, 3 carriers have removed vessels from various trade lanes to help drive their prices up. Some shippers that are moving large volumes of containers are even experiencing the need to use multiple carriers to ensure all cargo gets loaded.

Popular opinion seems to be for these increases to continue well into the New Year with little relief expected until the rates stabilise at a point where the carriers are satisfied.  These GRI’s coupled with increasing surcharges, is making sea freight more expensive in general at the present time, however CAF and BAF appear to be increasing at a slower rate than earlier this year. The increases have a tendency to fluctuate depending on the trade lane, but the GRI could range from between USD150 to USD500 per TEU. It’s possible that had some increases been introduced earlier this year, the current increases wouldn’t be as aggressive, as what we are currently experiencing. With a lot of the carriers waiting for other carriers to announce their GRI’s before announcing their own, this could create an interesting upcoming few months.

By Darlene Henke

During a renovation or construction project there are thousands of details that require the attention of Owners, Designers, Purchasing Agents, Project Managers, and many other team members involved.  One area that can impact the entire team is the coordination of goods for delivery to the property.  Below are 8 important areas to keep in mind when considering Logistics:

1. Goods in Storage – most warehouses will limit liability as it relates to insurance to pennies on the dollar.  Example, if a chair weighing 100 lbs is lost and liability was limited to $0.60 per pound, only $60 would be paid regardless of value. Additional insurance can be purchased through the warehouse or third party logistics provider.
    
2. Airfreight – carriers limit their liability similar to warehouses - usually to $0.50 per pound. More than 70% of airfreight shipped for hotels requires additional insurance to cover the value of goods. 
    
3. Proof of Delivery (POD) – contrary to popular belief, signing a POD “subject to inspection” does not create the basis for a claim. It is the legal responsibility of the claimant to prove who was atfault for loss or damage. When exceptions are noted at time of delivery "subject to inspection" – proving the carrier was at fault legally will be challenging. 
    
4. Port of Entry – FF&E coming from Asia can be routed to ports other than just Long Beach. If time exists in the schedule, an alternate port of entry may be closer to the hotel. Utilizing the closer port will reduce the freight budget and transit across the US.
    
5. Claims – if noted at the time of delivery, claims can be filed up to 9 months from the delivery date. If damage is concealed, a claim must be filed within 15 days of delivery; there is no guarantee or legal liability for the carrier to honor concealed damage claims.
    
6. Fuel Surcharge –fuel prices should not be as volatile as in 2008 but could change in the event of a national or natural disaster. Once the economic recovery starts, fuel prices will be likely to increase again.
    
7. Chinese New Year –every year this causes delays in shipping, at ports, and ultimately in receiving goods. In 2010 the New Year will hit around Valentine’s Day – make sure lead times have a little leeway if arriving right before, during, or after this time. 
    
8. Green Strategy – yes, there is such a thing in logistics. The EPA endorses specific organizations and all responsible logistics providers should be participating. It is up to you to make it a requirement for your project – ask your provider today if they are a member of one of these EPA approved organizations.

By Matt Walker

With the current state of the economy, it is prudent to take the extra step of ensuring each portion of your project is fully insured. There is not an industry standard for insurance on freight or warehousing per say, but the average coverage per truck load is $100K; the average replacement insurance offered by a typical warehouse is $.60 per pound, but this varies in each state. Real world examples of this could be, if you have an item valued at $50K which is shipping on an LTL carrier, you would initially believe the item would be fully insured under the $100K policy. However, that LTL carrier is most likely going to be hauling additional items, which may bump the total value of what the truck is carrying over the $100K limit. If an accident or theft were to occur, you may not be fully reimbursed. On the warehousing side for example, if you were to have 100 pieces of artwork valued at $100 a piece, weighting 100 pounds per piece, and they were to become damaged or stolen, under the typical warehouse liability limits, you would only be reimbursed $60 per piece. Audit Logistics, LLC’s project managers are aware of these loop holes, and proactively work to ensure, that you, the client, is fully insured for each freight shipment, and at each warehouse. Audit Logistics, LLC has a $1M insurance policy which will apply to any one occurrence, for both the freight and warehousing divisions over and above the liability limit set by the carrier, or individual state. For freight, if were to ship a $50K piece of artwork, our Project Managers will work to ensure the item is shipped on an approved carrier, and will purchase an insurance rider if necessary. On the warehousing side, if we believe there will be a point in the project when the value of merchandise in the warehouse will exceed the particular states liability limits, and Audit’s $1M policy, we will offer additional coverage, generally at $.14 per $100 of value insured.

By, Geoff
Gould

In previous issues of this newsletter we’ve discussed how the major shift in manufacturing from domestic sourcesto the emerging Asian markets has impacted supply chain logistics within the United States. The transportationindustry continues to globalize rapidly, and issues which in the past may have only affected one part of a supplychain now must affect the other links in the chain and cannot just occur in isolation.

While the rising cost of fuel was the largest issue affecting the transportation industry last year, the globaleconomic turndown has quickly assumed center stage in 2009. One consequence of the globalization ofinternational business is that a recession in the USA quickly spills beyond our borders and affects all partiesinvolved in our commerce. The ripple effect turns into a boomerang effect as American supply chains becomeaffected by economic hardships facing international shippers and carriers which in turn are precipitated byproblems within the American economy.

While the decreased shipping rates caused by lowered demand have provided a boom to shippers and forwardersin the short term, the consequence of reduced rates is that just like domestic carriers, large ocean carriers areforced to reduce staffing levels. Additionally, the decrease in international trade volumes has left carriers withexcess containers and vessels which are being left empty at major ports such as Singapore and Hong Kong, the firstand third busiest world ports respectively. The forecast remains grim as the world’s largest ocean carrier, theDanish company Moller‐Maersk, has experienced drops in its share prices and has publicly stated that it doesn’texpect conditions to improve until 2010 at the earliest.

As carriers scramble to adjust to conditions in the marketplace, many are undertaking measures which will havestrong impacts on North American supply chains. In addition to labor and equipment, the third major expense forcarriers is fuel. Aside from downsizing workforces and cancelling orders for new equipment, carriers areexperimenting with different ways to maximize fuel efficiency.

While this may be a positive step for “green” logistics, it will have some unwelcome effects as well. An easy way tominimize fuel usage is to only ship full containers and in turn, full vessels. Some carriers are now beginning to delayscheduled sailings in order to maximize tonnage on each voyage. We who serve the hospitality industry are alreadyexperiencing the effects of this trend, and we can expect other industries such as retail to experience the sameproblems in the near future. Some expected effects of the unpredictability of international shipping are decreasedcapabilities for a just‐in‐time shipping model and an increased dependence on domestic warehousing operations inorder to compensate.

With American supply chains firmly entrenched in the overseas model, it will not be feasible to restore theAmerican manufacturing sector and domestic sourcing in the foreseeable future. Domestic companies will have toadopt a reactive and highly flexible stance as economic conditions continue to remain unstable and thetransportation industry ‐one which affects all others ‐ remains in an uncertain state.

By Dennis O’Brien, Project Manager

There are generally two methods employed to audit inventory to ensure accuracy:  physical inventory and cycle counting. Some organizations opt for a combination of the two, but a good cycle counting program can eliminate the need for physical inventories.  The best way to ensure that a minimum of 97% accuracy is maintained is to continually count the inventory. That is, count part of the inventory every day and count each part several times per year. These audits are known as cycle counting.  This method is more accurate than physical inventory counts because, though physical inventory counts include every item in each count, they are performed much less frequently.

There are two methods of cycle counting:  geographic and ranking methods.  The size of the inventory determines which is the most effective.  The geographic method entails a simple count from one end of the warehouse to the other.  This method is recommended for smaller inventories of 500 part numbers or less in small distribution and warehousing operations.  Distributors and warehouses with large inventories would benefit from using the ranking method.  This  method uses “Pareto’s Law” to assign each item a rank like “A”, “B”, “C” or “D” based on cost, lead time, usage, etc.  By using “Pareto’s Law” to rank items, the most critical items are counted more frequently than those that are easily acquired if needed.

By Rhonda Davis, Controller

At Audit Logistics we are always looking for ways to prevent waste.  Over the last year we have made great strides with our nationwide recycling program for our clients in the hospitality industry and by building our relationship with our SmartWay Transport Partners.  Up until now it was mainly the operations and warehouse team members that were better able to contribute to the “greening” of America by selling and managing our services.  But beginning December 1st, the accounting department’s vision of saving trees has become a reality.  For every new project we bring on board, Audit Logistics opens a bank account.  For every bank account opened, we order pre-printed checks.  As you can imagine, we have a secure room dedicated to blank checks.

With the continued development of ALOT, we have implemented an invoice processing module and we are now able to use generic blank check stock for paying invoices.   This allows us to save money for our clients as well as eliminate the massive shredding that must be done at the close of every project as a typical project uses only a portion of the preprinted check stock that we were ordering.  By purchasing blank check stock we use only what is needed for each project, thus eliminating the waste.   Better yet, we have also been able to distribute the manpower hours from shredding to more beneficial office duties.