SUMMER 2024

36 THE DISTRIBUTOR’S

36 THE DISTRIBUTOR’S LINK Robert Footlik Robert B. Footlik, PE is a retired Professional Industrial Engineer. With over 50 years’ experience as a Warehouse and Logistics Consultant to a wide variety of clients including Fastener Distributors, Bob has a wealth of valuable information for our industry and he is willing to share it. While Footlik & Associates is now closed, his expertise is still available to his friends and our readers. For friendly advice, a second opinion or just to start a conversation, he can be reached at robert@footlik.net. WHEN THE SUPPLY CHAIN BREAKS One of the real joys of teaching adult students as an adjunct professor is encountering a student who knows more about a topic than you. This is especially true when the subject is the kind of dry as dust lullaby that usually puts the class to sleep. Meeting someone who has a passion for a career based on what you thought was esoteric knowledge is a revelation. Lectures were done online, pre Zoom, with both live and time delayed classes. For those engaged in distance learning there was a 12 hour lag between the televised class and the availability to the student. The class was Distribution and Logistics and the topic was INCOTERMS. Promptly twelve hours after the lecture I received a call from a student based in New Jersey. She complimented me on the class and chastised me on the content. Said I didn’t make it sufficiently interesting. She worked for the Port of New York-New Jersey and INCOTERMS were the reason why she loved her job. Here’s what she taught me... You Never Heard Of INCOTERMS? Yes You Have! INCOTERMS is an abbreviation for “International Commercial Terms” and it as old as commerce. These are a set of standards for how to speak the language of commerce, regardless of your native tongue and the language at the other end of the transaction. One relatively simple table, updated every 10 years and maintained by CONTRIBUTOR ARTICLE the International Chamber of Commerce dictates the duties, obligations and legality of international trade and in most respects domestic trade too. Never heard of this? Perhaps you have heard of FOB (Free on Board) applied to a transaction where you bought something that a vendor will ship to you. A simple example is a purchase made online from a vendor other than Amazon. Their terms are that when the item ships your credit card will be charged. This means that you own it in transit, and although the vendor has conveniently arranged for shipping you are paying UPS or USPS to deliver the goods to your home or office. All is well and perfect, unless the package is damaged or lost in transit. Then what? Your first reaction is to contact the vendor and complain, but if you follow the FOB column in the chart on the next page of the article, it is clear that whatever happened in transit is your problem, not the vendor’s. In actuality, by local convention only, the vendor is more likely to just apologize and send a replacement for free. This works for cheap trinkets, but what if the item is a piece of very expensive jewelry? That’s your problem, because as the chart shows, you should have negotiated for insurance of the shipment. How does this change for an Amazon order? Amazon is totally responsible for the order throughout transit. It will be under Amazon’s control and in theory they have total responsibility. CONTINUED ON PAGE 116

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