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Issue 6 2017 - Freight Business Journal


Cargonexx eyes investment in logistics start-ups


Hamburg-based trucking start-up Cargonexx has developed what it describes as intelligent online pricing soſtware that matches supply and demand for freight shipments. Rolf-Dieter Lafrenz, the founder and CEO of the company, points to a US start-up, Convey, which has just announced one of the biggest funding rounds to date for a trucking player, and remarks: “The acceptance for logistics start- ups is increasing. “Investors are realising that


Europe offers tremendous opportunities,” Lafrenz continues. “A few years ago, no high-tech logistics start-ups existed. This trend started only recently when transforming technologies grew out of the teething phase. The logistics industry has become


more and more diverse and innovative since then. “This also offers new business


models and possible revenues for investors. Right now, there is a lot of potential in this market as artificial intelligence and digital logistics services disrupt the industry and investors realise that there are value opportunities in high-tech start-ups beyond the Silicon Valley.” “The industry is quite


conservative,” Lafrenz suggests, “but it is moving in the right direction. More and more logistics companies want to be digital and we offer a simple solution.” Lafrenz believes that the main


focus of the logistics industry of the future will be on artificial intelligence (AI) and intelligent


management of the supply chain. The resulting changes will affect “the complete transportation workflow on road, sea, air and last- mile delivery”, he considers. “We are only at the starting point


of these major developments that will redefine the industry and its rules of the game. Just imagine that you might be able to control and monitor the complete supply chain from an office chair because everything is automated and can be tracked online. Production will be automated, goods will be shipped by an autonomous truck and delivered at the desired because every possible traffic jam can be predicted. “Amazon has just announced


plans for mobile drone stations. The parcels and freight market


is huge and not yet distributed. A lot of players are flowing onto the market and only the ones with the most innovative and competitive concepts will survive,” Lafranez argues.


The Cargonexx offering Cargonexx offers a solution to empty mileage which in turn supports the reduction in fuel consumption and CO2 emissions.


Tackling the top five customs challenges


Technology has come a long way in digitising customs procedures, but there are common pitfalls that can cause trouble when importing or exporting goods. The global customs landscape is already extremely complex, and with Brexit, there’s the prospect of a whole new set of barriers between the UK and the continent. A well-functioning customs programme is essential, writes Sian Hopwood, senior vice-president B2B at supply chain soſtware specialist, BluJay Solutions Here are the top five mistakes


Many companies still struggle with common mistakes. For example, if information is missing from commercial invoices, it must be obtained another way. Invoice data is one of the key sources for customs declarations, so at best, that can mean delays in shipment. At worst, it can affect relations between supplier, customer and customs office — and companies can be fined or have process simplification privileges revoked. There are also risks if electronic


declarations aren’t filled out accurately (for example, using incorrect preference certificates or item descriptions, false classifications, and so on). These all increase costs and hamper productivity — and interrupt the flow of goods. The good news is that by


implementing intelligent, multi- country customs management technology, with capabilities like automated check algorithms to flag errors, you can combat these issues.


that companies make, and how Cloud-based logistics management can help bypass them.


Incorrect customs classification A thorough description of goods is essential in order for proper customs classification. From the importer’s perspective, clear agreements must be made with the supplier. A goods description is sufficient when information for each item is listed, including purpose for use, material, and characteristics. Once this information is listed, goods can be attributed to a customs tariff number. It is sensible for the supplier to


include the importer’s item number in its invoice. If the attribution is not definitive, false tariff classifications can


lead to excessive duties


payments. A good customs handling solution will support both ends of the supply chain, streamlining communication, and enabling information to be shared


automatically. Create a database within your


customs soſtware for all common items, with master data and the customs tariff numbers to be used respectively. This will save you time in the import and export process.


Subsequent payments and excess customs duties Within the customs classification, a product is classified into the electronic customs tariff and assigned a tariff number. If the goods are declared under the false customs tariff number during import, the customs office will charge only the duties associated with the specified code number. False


tariff classifications


are particularly tricky because Customs rarely inspects the goods itself. The inspection rate is generally about 1.5%, so errors in customs declarations can remain undiscovered for many years. And, while it’s possible to get a refund for excess duties paid if the customs


Employing artificial intelligence to predict spot market prices in the truck business, the Cargonexx platform offers a ‘one-click- trucking’ service that is based on a machine learning pricing engine, and it has now registered more than 3,000 transportation companies in just eight months. According to Lafrenz: “There


are other digital platforms for freight exchange in Germany and across Europe. But in the field of road transportation Cargonexx is unique, because Cargonexx is not just a simple platform for freight exchange. We are a digital forwarder. “And the biggest unique selling


point of Cargonexx is of course the machine learning approach. Most of the freight exchange platforms available today are using rule- based systems. Our algorithm is self-learning. We call it MANNI (Multidimensional Artificial Neural Network Intelligence) and it


analyses influencing factors


100 notebooks. To eliminate this simple error, the quantity of items should always be specified on the commercial invoice, even if this is not always required. Total price: The total price is


shown on the invoice so one can check the completeness of multi- page documents, and organisations must specify the currency in which the invoice was issued. Customs value for goods for free: Since


delivered


office examines the characteristics of the goods, it could just as easily result in additional payments. Moreover, depending on the country, action can be enforced for three to ten years aſter the item has been shipped. It’s far better to get the


classification right the first time. Avoid subsequent payments and excessive duty payments by regularly updating your master data.


Missing information Number of items: Customs declarations with missing or false information on the number of items are instantly rejected by the customs authorities. Customs soſtware should be able to check the information entered and trigger an alert if it is found to be incorrect. For example, the indicated number of pieces in combination with the weight serves as the basis for automated plausibility checks - a shipment weight of 1.536 kilograms does not match a quantity of


no


transaction value is available for these items, alternative methods for the customs value calculation must be used. Customs value


///IT


like the type of cargo, weather conditions and traffic flows. These factors are the basis for calculating and predicting spot market prices. At the very beginning, we trained it with 750,000 real data sets. Today, the algorithm refers to a data set of 2 million entries. With every booked shipment, MANNI gets even more precise.” The company was founded


last year by Lafrenz and Andreas Karanas and the Cargonexx platform has been in operation in Germany since December. This year, Cargonexx use has extended into Austria, Poland and Denmark. “We are now active in four


different European countries but, in the near future, we want to make Cargonexx available for the whole European market. In the long run we want to create a mobile version of our Cargonexx platform and offer different services alongside the supply chain,” Lafrenz confirms.


of origin, penalties may result. Depending on the country of import, different certificates of origin may be required for the same product and different rules for the re-export may apply. Again, with the right soſtware, you can harmonise the customs regimes of multiple countries into a single output.


Compliance According to the Union Customs Code for the EU, all participants in the export of any goods are deemed duty debtors as long as the import information has not been submitted, or until the goods leave the EU again. False preference certificates, therefore, and indirect participation in tax evasion or minor tax fraud, can be considered under criminal law and can lead to administrative fines. With complex supply chains,


you can become an accomplice more quickly than you would think. Because of this, automated plausibility checks are essential to help ensure you remain complaint with local customs authorities. The reality is that complex


calculation methods are subject to firm rules and can vary between countries. Fictional goods values are not permitted.


Incorrect certificates of origin It is possible for certificates of origin to be declared invalid aſter the import because the authorities doubt the correctness of the goods’ origin. Without a valid certificate


customs processes offer an uncomfortably large number of opportunities for error. It’s essential to have the right technology in place to combat human error and decrease the amount of admin time required to get customs right. With Brexit on the horizon, now is the time to act - make sure you have a flexible, intelligent system in place that can handle any extra regulations as they come in.


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