The (Narrative) War For PPE

Image courtesy of Justin Chin–Bloomberg/Getty Images

Eastbound and Down

  1. The buyer solicits their requirement to known vendors, and if they cannot meet the demand, the network extends to other pre-vetted sources such as GPO’s and other medical supply chain providers with active experience. Third- and fourth-order broker “connections” are always circling the margins of a deal in desperate times because they are not known quantities with an established track record, and thus require the most extreme and accurate vetting possible.
  2. That vetting process should include — at a minimum — past performance history, list of current references from other medical supply buyers, itemized summary of specific partners for factory sourcing and logistics, documents validating those partners (Chinese export license, FDA registration numbers, freight forwarder license, etc), review of insurance and customs bond (if the broker is the importer of record), and written proposal of service. If the broker cannot provide ALL of these items, they are not an established vendor, and will be scrambling to stitch together the deal on the fly while pretending to be competent.
  3. The purchase order issued by the buyer should specify exact quantities, delivery dates, mode of transport, certification requirements for the goods, incoterm, and any specific delivery requirements. Ideally, the purchase order is also backed with a letter of credit, rather than being a pure cash-for-goods deal. This allows the bank to offer an additional layer of security for the buyer in the event of broker-supplier non-performance.
  4. Even in these uncertain times, there is still a very clearly defined and common import process, and it certainly doesn’t include smuggling goods across state lines in clandestine trucks. The shipment is transported from the factory in China to the origin airport, where Chinese customs officials will examine the documents and articles. The airfreight provider will consolidate all of the product onto air pallets and fly to the U.S. Upon shipping, the articles will be cleared by the customs broker for the importer of record in the U.S., including notification to FDA that articles are coming in which are registered medical devices. Once on ground, the freight will be transported to a Container Freight Station, be stripped from the large air pallets, and restacked for ground transport on normal pallets. At this time, a U.S. Customs officer (and likely an FDA official) will detain the shipment for a time and examine the articles and documents to ensure compliance with all import and sales regulations. Once cleared, the goods are loaded to a normal LTL or over the road truck and sent to the final destination named by the buyer. Shipping documents (bills of lading, commercial invoice, and packing list at a minimum) are prepared with hard copies traveling with the freight, and digital copies held by all stakeholders.
  5. At no point in time does any other law enforcement agency get involved, except in cases where fraud, smuggling, or other specific criminal behaviors are suspected. These alerts to other agencies are triggered when buyers or sellers have shown cause to be flagged, shipment processes are arranged outside of normal parameters, or a pattern of financial transactions indicates a likelihood of fraudulent activity. In none of these cases are the agencies authorized to seize cargo for the benefit of redirecting it to more “in need” buyers or locations. If the cargo must be seized, it’s because it has become contraband by virtue of the product itself being counterfeit, laws were broken as part of the transaction, or one of the parties to the transaction has committed a crime. Quite simply, that’s how this works, legally or customarily.

Calcifying Narratives

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