You can track a shipment through its various milestones to see it delivered, but tracking the success of trade compliance can be a bit difficult when no news is considered a sign of success. Nic Beehler, Director of Tradeflow at Expeditors, shares his thoughts on how underlying issues can reveal themselves over time and how to advocate for investments in measuring trade compliance.
Chris Parker (Host): Hello, everyone, and welcome to The Expeditors Podcasts, where you can hear about front of mind topics in the logistics and freight forwarding industry through the lens of a global logistics provider. I'm your host, Chris Parker, and today's topic: managing and measuring what doesn't happen. You can track a shipment through its various milestones to see it delivered, but tracking the success of your supply chain and trade compliance as a whole can be a bit difficult. Why would it be, though, as long as you're able to avoid delays, fines, and errors? Right? No news is good news. Is there anything to be done with no news? I mean, what value does measuring what's not happening have, and why invest in that? And how does data give a clear picture of where you stand with compliance. With me today is the director of Tradeflow at Expeditors, Nic Beehler, to chat more about it. Welcome to the podcast, Nic.
Nic Beehler: Thanks, Chris. Thanks for having me today.
Chris Parker: Yeah, it's a pleasure to have you. Tradeflow, what is that, and what's its relationship to Expeditors?
Nic Beehler: Yeah. So, Tradeflow is a trade data management or global trade management system. It's a web-based system that we at Expeditors developed. We sell to our customers. The customers that we have are really focused on trade compliance, moving goods across borders, and managing all the complexities –all the different data attributes that you need to convey the customs authorities and other regulatory agencies.
Chris Parker: Gotcha. Okay. And you as director, what do you do for Tradeflow?
Nic Beehler: So, I oversee a team and the development of our system, the implementation with our customers, all of our marketing, operations, all the different aspects. We're like a little, small business or, in the Expeditors world, like a small branch within the company.
Chris Parker: But you're not a subsidiary. You're infused into Expeditors, essentially.
Nic Beehler: Yeah, we are. We're not a subsidiary. We actually are part of the Expeditors company, a solution that we offer.
Chris Parker: Gotcha. Okay. So, the question I've been asking people this lately, been really curious about it too, why do you care about data and compliance and providing the service to customers?
Nic Beehler: Yeah. I think it's really interesting because we deal a lot with customs and trade, and these things relate to government decisions, political strategy. I mean, it's very much, it's like front page news the last few years with the US/China relations and the trade war. And even going back further, things like government subsidizing industries, companies trying to undercut and sell below price in a target market that ties into anti-dumping. So, there's all these things, I think, that governments do for good reasons. Then it gets to the point of, "Okay, you're a company, you're trying to move your goods across borders. All this complexity has been laid out for you. And how do I manage that?" Then it comes down to the data points. These are all the data points I need to collect and manage and distribute and audit, and it starts to get pretty complex.
Chris Parker: Sure. And so, then Tradeflow is able to collect all that, synthesize it, make it make sense for people in one location, essentially.
Nic Beehler: For sure. Yeah. Definitely centralizing it, so it's in the platform. And it's also aggregating a lot of different countries because every country does things a little differently, so there's classification schedules, there's screening lists. And they are country-based or regional union-based at times. So, it's like, you're a customer, you've got your data, that's always changing, and then all of the trade data, the public trade data, that's all changing too. And you're just trying to synthesize and keep up with it all.
Chris Parker: Okay, cool. And while we're on the topic of data, let's get right into today's topic. I picture you on this deep, personal journey, hiking through the Cascades, and you stop for a drink of water and take in the magnificence and grandiosity before you. And all of a sudden, a hummingbird lands on your shoulder and whispers into your ear, "Measuring successful trade compliance is difficult due to the lack of positive data points," and you spend the rest of your time contemplating the wisdom of the Pacific Northwest. Is that more or less how we got to where we're talking about this topic today?
Nic Beehler: In a way, yeah. Definitely taken a lot of walks. You've painted a much more beautiful picture than my neighborhood walks. I'm a little envious of that, actually. Maybe something to strive towards this year.
Chris Parker: Sure.
Nic Beehler: No. So, it goes back; I was reading this book last year, it's called Upstream, and it was really focused on managing things upstream, not downstream. Very simple concept. But beyond that, what I found was really interesting was a lot of examples in there, whether it was public traffic safety or healthcare, there's a lot of things in those worlds that you're trying to prevent bad things from happening. You're trying to prevent car accidents, people from tripping on a sidewalk. Or in healthcare, you're trying to prevent a greater pandemic outbreak or other things. And it's like, how do you know you're successful? How do you know that you've avoided that thing from happening? It doesn't show itself by its nature. So, you spent this time, you spent this money, how do you know you were successful?
Nic Beehler: And it really resonated to me in the trade compliance world because it's very similar in that you're trying to suppress things from happening or mitigate them if they do, and so you don't get those positive signals, you don't get that feedback. So, for me, it really resonated, and I started thinking about, "Okay, that's what we do. We're trying to manage things that don't happen."
Nic Beehler: You have to take a bit of a macro view of things, I would say, which can be a before and after, so you have to say, "Okay, here's our current state, here's what we're doing. Are we stopping and measuring what we're doing?" And it doesn't have to be overly scientific because that sounds like, "Geez, how do we stop and measure? We're so busy. There's stuff coming at us left and right."
Chris Parker: Yeah. And when do we start?
Nic Beehler: Right. I mean, it's like you could have started five years ago. Sure. But you could always start today. And so, I think it's important to measure something, and it could be the number of emails that you're sending to your broker or to your forwarder. You could probably track that with some collaboration with your IT group. It could be survey results that you do. A lot of time, we at Expeditors, we'll do business reviews with our customers, and I'm sure vendors would do reviews as well. So, your forward or a broker would do a review with another customer. So, I think measure your current state.
Nic Beehler: And then you may have already been implementing a system or a process, but certainly, if you are looking to implement something and you're trying to get approval from your management, you're trying to say, "Okay, well, this is going to be an expense. We're going to invest in a system and a platform to manage this stuff. How are we going to know that we're successful? How can we come back in a year and tell our management that we saved 2,000 hours or we saved X amount of dollars?" So, if you don't measure the current state, you're going to have a hard time coming back later and showing those savings.
Chris Parker: When you've worked with customers in the past or peers in your space, what has been the common relationship that's been described between customers and their data?
Nic Beehler: It does depend on the company, the customer, and the industry they're in. Definitely some industries like healthcare, for example, I know I used that analogy earlier; healthcare is a highly regulated industry for good reason. Food, same thing. So, you do see that certain customer, certain industries have more complexity than others. Another example would be the defense industry, or you could say aerospace, defense contractor – people who are shipping goods that need licenses. So, yeah, you definitely see patterns that certain industries are just more exposed to the complexity of the trade data than others. That's for sure.
Chris Parker: Which means, then, more exposure to risk and failure and other kinds of headaches along the way. Right?
Nic Beehler: Yeah, for sure. So, another aspect of this is tolerating failure. I think there's certain industries that can tolerate failure more than others. The ones that are more highly regulated have less tolerance for failure. Again, those things, defense contractor, food. You don't want to have food that makes everyone sick. You don't want to have a healthcare product that doesn't work or injures someone. So, there's less tolerance for failure there, but you might have a product that we can tolerate some failure just so that we can learn from it. So, I think that's another other aspect of this, too.
Chris Parker: When looking at those failures, then, I don't want to focus on in too negative of a way, but how can those be reversed? What good can come out of understanding your risk tolerance?
Nic Beehler: Yeah. So, I would say if you're looking to change, you're looking to try to do something different, can you tolerate a little bit of failure? And it might be temporary. So, an example would be, "Okay, let's try this system out for three months," and assuming you don't have a long-term commitment for multiple years, so you obviously got some flexibility there. So, "Let's try this out for three months, and let's see how it goes. It might be a little bit of ramp-up at first, so let's give it some time. And then, did we find that did it make things better? Or it could have made things worse." Certainly, that's always an option. "We tried this system out, we found that our stakeholders, maybe it's our forwarders, our brokers, they hate it, or our people hate it."
Nic Beehler: And so, there's always that possibility that trying something won't work, but you need to give it a little bit of time. And so, that's why I would say is, "Can we tolerate some failure?" in quotes there, in that, "Yeah, maybe it made things worse, but we can pull back from that. Okay, at least we tried something, and our people, our employees, hopefully, appreciated that we are trying to help them. That if they are overwhelmed with work and complexity, we tried something. And then, now, okay, let's try something else." There's always another option to try.
Chris Parker: So, speaking to analysts or compliance specialists, even legal teams, how can they advocate, I guess, a little bit more for measuring and investing in measuring what doesn't happen?
Nic Beehler: Yeah. It's tough because they don't have access to as many positive signals that perhaps the logistics team has, that when they see their shipments moving, and they see whether they're on time or not, they field the requests for documents or the requests for information. Freight's got to move; it needs information. If it doesn't have the information, it stops. It's always happening. That information is ever-present. So, for those people that are managing the trade compliance side, can they collaborate with the logistics side? Who is getting those positive signals? Or they're giving us signals, at least. And it might just be a conversation just to sit down and say, "Hey, how's it going? How's the freight moving? Are you getting what you need from us? What are the kinds of questions that you're getting from our forwarders and our brokers? Are they finding information is missing? Did they find that information was inaccurate?"
Nic Beehler: Say we implemented a system like a Tradeflow system, and you're feeding data over to them. Is that information reliable? Or did they say, "No, this is not right. That's not the right data element." Or did the information actually feed? Did the data feed itself happen? So, I think those logistics groups, they are getting those signals more often, and they're just always there. So, can you talk to them? Can you just have a conversation and get that feedback and then start to correlate it to what you're doing in your group, managing the trade compliance side?
Chris Parker: What can trade compliance teams be asking themselves to improve the relationship and come up with new or, I don't know, meaningful ways to understand their data?
Nic Beehler: We talked earlier about measuring where you're at today, and then if you try something, measure it after you try it, whether that's three months or 12 months. I think another aspect of this is you can look further back; you can look two, three years backwards and see what your company and your department experienced. Maybe you went through an audit, like a full-blown audit, with Customs or another authority. Or maybe it wasn't to that extent, but you got a lot of requests for information. Like in the US, they have CF28s, requests for information, and it's not really an audit, but they're trying to understand what you're doing as an importer.
Nic Beehler: And so, yeah, try to go back and see what you can collect, and that'll actually help build that baseline a little bit better, too. It's more retroactive, so it's not as perfect as doing it in the moment. But I think as much as you can self-reflect and look backwards and go, "Okay, how has it been? How did we get to where we're at today?" Especially if you're looking to make any kind of investment in systems, you want to be able to tell that story to your management and say, "Hey, we just went through two years where we spent a lot of time answering questions from Customs or answering questions from our stakeholders, like our brokers, and we're here today, we're having this conversation because we know there's a better way." But you need to have something to show. You have to be able to go back and pull and share that experience. And so, I think anything that can be data's great, or if it's more anecdotal, I think that's okay, too. But there's got to be something that you've looked back retroactively on.
Chris Parker: And this is something that allows you to identify trends before they become big disasters that can really impact a company. Give me an example of something that would be something you would not be able to identify in the short-term, but once you look back further, you can be like, "Oh, that's not going the right direction."
Nic Beehler: Yeah. There's probably a few examples. It's tricky because, yeah, these things like compliance issues can be slow-moving, and they can definitely creep up over time. And along with that, it may take a while to show the success, but on the other side, it's like, "Okay, you may not realize, but you had this slow moving issue creeping up." And for instance, let's say you're shipping to your customers all around the world, you don't really have a good sense of who they are, you're just taking orders, and it's like, "Hey if they want to buy our product, we'll ship to them. Great. We'll take the business.” That's a real loose compliance approach, and it's not recommended.
Nic Beehler: There could be a party that's a denied or restricted party by one of the governments around the world, and they get on those lists for different reasons. So, if you don't really know your customer or know your supplier on the front end, and you're not screening them to determine if they're on a list, you might be fine at first. This might go on for a year or two or more, but eventually, it's probably going to catch up with you, and someone's going to figure that out, whether it's just a random coincidence or someone maybe realizes later and goes, "Hey, you're not screening. You're not really checking." And someone starts checking, and they realize, "Oh, shoot, we've been shipping to someone we shouldn't have been, or buying from a supplier that's denied." So, yeah, you got to be careful because that stuff can lurk there in the shadows and creep up on you later.
Chris Parker: Yeah. And something that I'm thinking about is if you're lenient in your trade compliance and you're shipping to destinations that aren't really in line with any regulations, there are processes that are being cemented and strengthening as these shipments are being delivered. And once you look back and say, "Okay, we actually need to make some huge changes," I would imagine they're pretty difficult to undo. You're not only tangling a fishing net, or a fishing wire, or something like that; you're also super gluing it together in some ways. Right?
Nic Beehler: Yeah. Yeah. I mean, there's the expression, "There's no time like the present." Right? So, even if you do find that you have this tangled fishing net, it sure is hard to untangle, but you'd better not wait any longer to do that. I'm trying to think if I could extend the fishing metaphor for you further, but I don't think I can.
Chris Parker: It just came to me. I don't know.
Nic Beehler: Yeah. Maybe I'll think of it tomorrow.
Nic Beehler: But no. Yeah. I mean, just because you found something that was all tangled up doesn't mean you should do nothing. I mean, that's probably stating the obvious. And a lot of times, if you do find yourself in hot water on one of these issues, it can benefit you as a company if you realize it, you self-report it, and you start mitigating it right away. That usually does benefit you. So, if you get to a point where you have to self-disclose something, and you get fined, maybe that fine is less than it otherwise would have been. So, yeah, it definitely helps to, if you're looking back like we talked about, you're looking back two, three years, if you discover something, "Okay, what are we going to do about it now? Let's put some systems in place, some processes, some checkpoints, so it doesn't happen again. We have more visibility. We have more control." That can be really helpful. I think it's much better, too than just throwing staff at the problem. A better process will always win over just more staff.
Chris Parker: Yeah. And this speaks to your earlier point about trying to avoid slapping on solutions onto things with a really short-term perspective. I mean, thank goodness you were recording for however many years to identify these things, to avoid just bigger headaches, bigger trouble, bigger loss of business, and things like that. Bad press. What not.
Nic Beehler: Yeah. I always appreciate talking to the companies that take this really seriously; they're really invested. And there's always the companies that don't, and you have to strike that line and somewhat convince them, "Hey, this is really important. There's a lot of value here." But I always love talking to the companies that they buy-in; they get it. And sometimes they had an issue, they had an audit, they had something in the past, and that cemented that culture of compliance in that company. You learn the hard way sometimes. That's true. It's always better if you don't have to learn the hard way. But I definitely enjoy talking to those customers that they've got that culture of compliance just like we do at Expeditors, and so we're seeing like-minded there.
Chris Parker: What are those kind of qualities, then, that exist in successful companies? Outside of a culture of compliance, is there anything else that you feel like you've been able to see or that just tends to be a commonality between the companies that are just doing really well?
Nic Beehler: Yeah. There's probably a few things that come to mind. I mean, attention to detail will be one. That's a general skill that we appreciate in a lot of areas. I think in the compliance world, it's super important. Another one would be just not letting things persist and fester. Don't tolerate that slow-moving, creeping issue because it's like, "Oh, it might be okay for now. Oh, just that one time." It's like, "No, just that one time is not okay. We have to stop right now." So, I think that's really important. People that just, they don't tolerate deviating from the right path and then they have that attention to detail to notice it and to be willing to commit to working on it. So, yeah, we appreciate that because I think that's very much in our Expeditors culture, too.
Chris Parker: Yeah. A commitment to discipline, if you could boil that down.
Nic Beehler: Yeah. For sure.
Chris Parker: Yeah, absolutely. What would be some unique sources, I guess, of information that a company could look to that they may already be receiving in order to really understand whether they're being successful, compliant, et cetera?
Nic Beehler: Yeah. So, this might be someone of our reach, but I think it could work. If you look at employee satisfaction scores, I know at Expeditors we do that. We score ourselves all the time. And so, if you can get a sense from your department, are your employees satisfied? How is that changing year over year? And maybe look deeper than just the overall score. Look at the comments, the real anecdotal material underneath there. What are they saying? And hopefully, too, it's not just a once-a-year employee survey. You're sitting with your employees; you're talking with them, your one-on-ones, you're asking them the question, "How is it going? How is your workload? What could we be doing different? Could we be doing something better?"
Nic Beehler: Hopefully, you're having those conversations throughout the year because a lot of times is your people, your analysts, your specialists, they're on the frontline; they're the ones talking to the forwarders and all the stakeholders in your supply chain. So, just make sure, I guess, you're close to your employees. You're going to get probably a lot of information. And overall, that may not relate to this topic, but I think it's a good opportunity, though, to really search and pull out this topic and understand, "Are we doing the right things? Are we managing in the right areas? And ultimately, are we preventing those bad things from happening?"
Chris Parker: Some companies will offer, I mean, they do customer survey scores, as well. What kind of value can they be getting from those?
Nic Beehler: Yeah. So, I think if you're an importer, an exporter, you're working most likely with supply chain partners; you're working with suppliers. You've got to buy your stuff from somewhere. So, hopefully, you value the way your suppliers view you, whether that's a formal survey or whether that's a business review, something's going on there. And then on the actual movement of the freight, you're working with a freight forwarder or logistics partner, you're having business reviews with them. And they're sharing their feedback, and they're saying, "Hey, here's where we found a lot of trouble in the last quarter. We had to ask for information a lot in this one area." Maybe as an importer, you rolled out new products, and it made sense. It's like, "Okay. Yeah, we're still perfecting that. That's great to hear. We'll add that extra layer of information. We'll add that data, and we'll make sure you're getting it regularly."
Nic Beehler: So, I think it could be a business review, a formal business review. These things could surface themselves in conversations here and there, maybe weekly meetings. If you're bringing on a new partner, you're probably having like a weekly meeting with them or a monthly meeting. So, I think just be willing to ask the question of them. Don't wait for someone to offer it up and say, "Hey, we're having trouble in this area." I think it's in your interest to know sooner than later, just so you can start working on it, so it doesn't become a full-blown disaster later, and then you're really scrambling to fix it.
Chris Parker: So, moral of the story is information is everywhere, you just have to know what to look for, how to capture it, and even if it doesn't necessarily tell you anything from day to day, that's still really really valuable stuff. Because once you look back five years, three years, or whatever, a story has been told, regardless.
Nic Beehler: For sure. Yeah.
Chris Parker: If someone were to not buy that at all, what would you say to them?
Nic Beehler: Yeah. It's tough because there is so much data today, and there's the paralysis by analysis, or maybe it's the other way around. And so, you got to be careful; you got to pick and choose, that is for sure. However, there, obviously, there is a story there, and I just think it's a bit of a symptom of shipments, customs entries, just moving freight around the world. It's fast and furious, it's moving all the time, and it's really hard to stop and just analyze things and go back and look retroactively and see what was our story the last two years.
Chris Parker: Sure. You got to keep the world moving. Yeah.
Nic Beehler: Yeah. It's like, "How much time do you have for the strategy work?" "Well, I don't have time for strategy because I'm just trying to stay afloat." That's a reality for a lot of people. I just think you got to realize it's in your interest, though, to do that, especially in trade compliance world. We talked about earlier; things can be slow-moving, slow-brewing. You really should be stopping and reflecting and looking backwards at some regularity, not necessarily every week, but do a quarterly. Go back and look the last quarter or the last year and see how things are going, how things have changed, ask your people, all those things. Or just pick a few of them, at least.
Chris Parker: And honestly, if you're in a go, go, go mode, if you are staying afloat, it's probably a good sign to start taking measurements so that you can see, "How can we avoid being in this operation, and how can we avoid being in this mode?" Because that is not sustainable for anyone, for employee satisfaction, for customer satisfaction. If everything is down to the wire, that is a signal in and of itself that we need to start looking inward, and we need to start looking historically, or laterally, however, to come up with a clear picture as to what we can do to avoid this and be successful.
Nic Beehler: Yeah. That's a great point. I mean, because you've got to say, how sustainable is that if we're running around like crazy every day? It was exciting at first, but then, after a while, it's like, "Okay, I don't know if we can keep this up."
Chris Parker: Yeah. This is nonsense. Yeah.
Nic Beehler: It's not sustainable.
Chris Parker: Well, Nic, thank you so much for chatting with me about this. If people were interested in getting in contact with you or to learn more about you and Tradeflow, where can they go?
Nic Beehler: Yeah, you can find me on LinkedIn. You can also learn more about our Tradeflow product by going to our expeditors.com and find us online there. And definitely reach out to me on LinkedIn if you're interested in learning more, and happy to about this topic or our system and what we offer in Tradeflow.
Chris Parker: Absolutely. Thanks again, Nic, and it was a pleasure talking with you.
Nic Beehler: Thanks, Chris. Appreciate being here.
Chris Parker: And before you go, make sure you're subscribed on whatever podcast app you're using so you won't miss the next episode. To learn more about Expeditors, you can find us on LinkedIn, Facebook, Instagram, and Twitter, or simply visit us at expeditors.com. Take care, and I'll see you next time.