# SUPPLYCHAIN.md

> **What this file is:** The complete taxonomy of global supply chain logistics — every inflection point, sub-problem, edge case, formula, and reference table. Structured as a node tree with operational data. If you are an agent, start here. If you are a human, this is your map.

> **How to read this:** Each numbered section is a major phase. Indented bullets are sub-problems. `[!]` marks common failure points. `[?]` marks decision nodes. `[$$]` marks cost-sensitive nodes. Tables contain operational reference data. Formulas are computable.

> **Version:** 1.0 | **Status:** Living Document | **Last updated:** 2026-02-06
> **Part of:** [protocols.md](https://protocols.md) network

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GET https://supplychain.md/.well-known/agent.json
GET https://supplychain.md/.well-known/provenance.json
```

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---

## 0. OVERVIEW — THE SUPPLY CHAIN AS A GRAPH

```
DEMAND SIGNAL
  |
  v
[1] STRATEGIC PLANNING & NETWORK DESIGN
  |
  v
[2] SOURCING & PROCUREMENT
  |
  v
[3] PRODUCTION & MANUFACTURING
  |
  v
[4] PACKAGING, LABELING & UNITIZATION
  |
  v
[5] WAREHOUSING & INVENTORY
  |
  v
[6] ORDER MANAGEMENT & FULFILLMENT
  |
  v
[7] FREIGHT & TRANSPORTATION
  |    \
  |     v
  |   [8] CUSTOMS, COMPLIANCE & BORDER CONTROL
  |     |
  v     v
[9] LAST MILE DELIVERY
  |
  v
[10] FINANCIAL SETTLEMENT & INSURANCE
  |
  v
[11] RETURNS & REVERSE LOGISTICS
  |
  v
[12] VISIBILITY, TRACKING & DATA
  |
  v
[13] RISK, RESILIENCE & EXCEPTION MANAGEMENT
  |
  v
[14] SUSTAINABILITY & ESG
  |
  v
[15] AGENTS, AUTOMATION & COORDINATION
```

**Cross-cutting concerns (apply to ALL nodes):**
- Trust & identity (who is this agent/entity?)
- Regulatory compliance (which jurisdiction?)
- Financial flows (who pays, when, how?)
- Data standards (what format, what schema?)
- Time constraints (SLAs, deadlines, perishability)
- Sustainability & emissions (GLEC/ISO 14083)

---

## 1. STRATEGIC PLANNING & NETWORK DESIGN

**What happens here:** Before anything moves, decisions are made about where to source, where to hold inventory, how to structure the network, and how to anticipate demand.

### 1.1 Demand Forecasting
- Methods: time-series (ARIMA, exponential smoothing), causal models, ML-based
- [?] Use time-series for stable products with 24+ months history. Use ML for products with <12 months history or high variability. Use causal models when you can identify clear demand drivers (promotions, weather, economic indicators).
- [!] Overfitting to recent data. Always validate against holdout periods spanning at least one full seasonal cycle.

### 1.2 Network Design
- Core tradeoff: proximity to customer (speed) vs. consolidation (cost)
- Rule of thumb: 1 DC covers a country <500K sq km. 2-3 DCs for US/China/India. 5-7 for pan-European.
- Location factors ranked by impact: (1) proximity to demand, (2) labor cost/availability, (3) transportation infrastructure, (4) tax incentives, (5) natural disaster risk
- [?] Centralized (fewer DCs, lower fixed cost, slower delivery) vs. distributed (more DCs, faster delivery, higher fixed cost)

### 1.3 Inventory Strategy Formulas
- **Safety stock:** SS = Z × σ_demand × √(lead_time) + Z × σ_lead_time × avg_demand
- **Reorder point:** ROP = (avg_daily_demand × lead_time_days) + safety_stock
- **Economic order quantity:** EOQ = √((2 × annual_demand × order_cost) / holding_cost_per_unit)
- JIT: Only viable when supplier lead time variance < 2 days AND you have backup sources
- ABC analysis: A items (top 20% by revenue) get daily monitoring. B items weekly. C items monthly.
- [$$] Carrying cost = capital cost + storage + insurance + obsolescence (typically 20-30% of inventory value/year)

### 1.4 Make vs. Buy
- Make when: IP is core differentiator, quality control is critical, volume justifies capex
- Buy when: commodity component, demand is volatile, supplier has scale advantage
- Break-even analysis: compare total cost including overhead, quality costs, and opportunity cost of capital

### 1.5 Sourcing Strategy

| Strategy | When to use | Risk | Cost |
|---|---|---|---|
| Single source | Proprietary/specialized component | Highest | Lowest |
| Dual source | Critical components | Medium | Medium |
| Multi-source | Commodities | Lowest | Highest |
| Nearshore | Lead time sensitive, IP risk | Low-Medium | Medium-High |
| Offshore | Cost-driven, stable demand | Medium-High | Lowest |

---

## 2. SOURCING & PROCUREMENT

**What happens here:** Raw materials and finished goods are identified, evaluated, negotiated, and contracted from suppliers.

### 2.1 Supplier Discovery
- Identify potential suppliers by commodity, geography, capacity
- Evaluate certifications (ISO 9001, FSSC 22000, SA8000, fair trade)
- Assess financial health and production capacity
- [?] Single-source vs. multi-source strategy (see §1.5)
- [!] Over-reliance on single region (concentration risk)
- [!] Tier-2 and Tier-3 supplier opacity (you don't know who makes the parts that make the parts)

### 2.2 RFQ / RFP Process
- Minimum 3 quotes for competitive pricing
- Include: unit price, tooling/NRE, MOQ, lead time, payment terms, warranty, capacity
- Compare on **landed cost** not unit price (see §10.1)
- Evaluate: price (30%), quality/capability (25%), lead time (20%), financial stability (15%), communication (10%)
- [$$] Total cost of ownership vs. unit price
- [!] Spec ambiguity leading to quality disputes later

### 2.3 Incoterms 2020 — Complete Reference

**Critical: Incoterms define where risk transfers from seller to buyer. Getting this wrong means uninsured cargo.**

| Term | Risk transfers at | Seller arranges transport? | Seller pays insurance? | Use when |
|---|---|---|---|---|
| EXW | Seller's door | No | No | You control everything, have own forwarder |
| FCA | Carrier pickup | To first carrier | No | Most flexible, recommended default for exports |
| FAS | Alongside ship | To port | No | Bulk/breakbulk cargo only |
| FOB | On board vessel | To port of loading | No | Ocean freight, most common for Asia exports |
| CFR | On board vessel | Yes, to destination port | No | When seller has better ocean rates |
| CIF | On board vessel | Yes | Yes (minimum) | Common but risk transfers at ORIGIN |
| CPT | First carrier | Yes, to destination | No | Multimodal equivalent of CFR |
| CIP | First carrier | Yes | Yes (all-risk) | Multimodal equivalent of CIF |
| DAP | Destination (before unload) | Yes | No | Door delivery, buyer handles import customs |
| DPU | Destination (unloaded) | Yes | No | Only term where seller unloads |
| DDP | Destination (cleared) | Yes | Optional | Full door-to-door, seller handles import duties |

- [!] **CIF trap:** Risk transfers at origin port, NOT destination. Seller pays for insurance but buyer bears risk during transit. If cargo is damaged mid-ocean under CIF, the BUYER files the claim. Use CIP instead for better buyer protection.
- [!] **EXW trap:** Buyer is responsible for export clearance. In many countries, a foreign buyer cannot clear exports. Use FCA instead.
- [?] Incoterms choice cascades into who handles freight, insurance, customs

### 2.4 Purchase Orders
- Required fields: PO number, line items with SKU/description, quantities, unit price, Incoterm, ship-to address, required delivery date, payment terms, quality requirements, cancellation terms
- Always specify inspection rights and defect thresholds
- [!] Mismatched Incoterms interpretation between parties

### 2.5 Supplier Relationship Management
- Performance scorecards (on-time delivery, defect rate, responsiveness)
- Audit schedules (quality, labor, environmental)
- Capacity planning and demand forecasting collaboration
- [!] Supplier goes dark / becomes unresponsive

**Standards:** GS1 GTIN for product identification, UN/CEFACT for trade documents, ICC Incoterms 2020

---

## 3. PRODUCTION & MANUFACTURING

**What happens here:** Raw inputs are transformed into finished or semi-finished goods ready for shipment.

### 3.1 Production Planning
- Bill of materials (BOM) resolution
- Production scheduling against demand forecast
- Raw material availability check
- [?] Make-to-stock vs. make-to-order vs. assemble-to-order
- [!] BOM changes mid-production (engineering change orders)

### 3.2 Quality Control
- Incoming material inspection
- In-process quality checks (SPC, sampling plans)
- Final inspection and testing
- Certificate of Analysis (CoA) / Certificate of Conformance (CoC)
- [!] Defective batch discovered after partial shipment
- [!] Quality standards differ by destination market

### 3.3 Production Output
- Finished goods inventory receipt
- Lot/batch/serial number assignment
- Production records (traceability from input to output)
- [?] Shelf life assignment for perishable goods
- [!] Yield loss exceeds forecast — short shipment risk

### 3.4 Compliance at Origin
- Export control classification (EAR, ITAR for US; dual-use regulations)
- Country of origin determination (rules of origin for trade agreements)
- Certificates of origin issuance
- [!] Substantial transformation rules are complex and vary by trade agreement
- [!] Sanctioned entity screening (OFAC, EU sanctions lists)

**Standards:** ISO 9001 (quality), GS1 for lot/batch, REACH/RoHS for chemical compliance

---

## 4. PACKAGING, LABELING & UNITIZATION

**What happens here:** Goods are prepared for transport — protected, identified, grouped into shippable units.

### 4.1 Product Packaging
- Primary packaging (consumer-facing)
- Secondary packaging (cases, cartons)
- Tertiary packaging (pallets, crates, slip sheets)
- [?] Packaging material choices affect duties (some countries tax packaging separately)
- [!] Inadequate packaging → damage claims → insurance disputes

### 4.2 Labeling Requirements
- Product labels (ingredients, warnings, language requirements by market)
- Shipping labels (consignee, origin, handling instructions)
- Regulatory marks (CE, FCC, UL, WEEE)
- Barcodes: GS1-128 for logistics, SSCC for pallet-level tracking
- [!] Label non-compliance → goods held at customs
- [!] Language requirements vary by destination country

### 4.3 Unitization & Pallet Standards

| Type | Dimensions (L×W) | Region |
|---|---|---|
| GMA / North American | 48" × 40" (1219 × 1016 mm) | US, Canada |
| EUR / ISO 1 | 1200 × 800 mm (47.2" × 31.5") | Europe |
| Australian Standard | 1165 × 1165 mm | Australia |
| Asia Standard | 1100 × 1100 mm | Japan, Korea |

- Container loading plans (floor-loaded vs. palletized)
- Weight distribution for transport safety
- Calculating CBM (cubic meters) and chargeable weight:
  - Ocean: Revenue tons = max(weight in MT, volume in CBM)
  - Air: Volumetric weight = L × W × H (cm) / 6000
  - Truck (US): 1 cubic foot ≈ 10 lbs for DIM calculation
- [$$] Poor unitization = wasted container space = higher per-unit freight cost
- [!] Overweight containers rejected at port

### 4.4 Dangerous Goods Preparation
- UN number classification
- Proper shipping name
- Packaging group (I, II, III by danger severity)
- Dangerous goods declaration (IMDG for ocean, IATA DGR for air)
- IMO hazard classes: 1 (explosives), 2 (gases), 3 (flammable liquids), 4 (flammable solids), 5 (oxidizers), 6 (toxic), 7 (radioactive), 8 (corrosive), 9 (miscellaneous)
- [!] Misdeclared DG → vessel/aircraft rejection, fines, criminal liability

**Standards:** GS1 SSCC, IATA DGR, IMDG Code, UN Recommendations on Transport of Dangerous Goods

---

## 5. WAREHOUSING & INVENTORY

**What happens here:** Goods are stored, managed, and staged for outbound movement.

### 5.1 Facility Type Selection

| Type | Use when | Typical cost/sq ft/month |
|---|---|---|
| Distribution center | Regional hub, bulk storage, B2B | $4-8 |
| Fulfillment center | D2C, high SKU count, individual picks | $8-15 |
| Cross-dock | No storage needed, just transfer between vehicles | $6-12 |
| Cold storage | Perishables, pharma (see §5.3) | $12-25 |
| Bonded warehouse | Imported goods, duty deferred until withdrawal | $6-12 + bond costs |

### 5.2 Bonded Warehouse vs. FTZ vs. Standard

| Feature | Standard warehouse | Bonded warehouse | Foreign Trade Zone |
|---|---|---|---|
| Duty payment | At import | Deferred until withdrawal | Deferred until entry to commerce |
| Manufacturing allowed | Yes | No (storage/repackaging only) | Yes |
| Inverted tariff benefit | No | No | Yes — pay lower finished-good rate |
| Re-export without duty | No | Yes | Yes |
| Time limit | None | Up to 5 years (US) | No limit |
| Best for | Domestic goods, quick turnover | Import storage, re-export | Assembly, inverted tariffs, mixed sourcing |

### 5.3 Cold Chain Temperature Categories

| Category | Range | Products | Critical notes |
|---|---|---|---|
| Deep frozen | -25°C to -18°C (-13°F to 0°F) | Ice cream, frozen seafood, frozen meat | Break in chain = total loss, no recovery |
| Frozen | -18°C to -10°C (0°F to 14°F) | Frozen vegetables, frozen meals | Must maintain through entire transit |
| Chilled | 2°C to 8°C (36°F to 46°F) | Fresh produce, dairy, vaccines, biologics | Most pharma lives here. WHO PQS standards apply |
| Cool | 8°C to 15°C (46°F to 59°F) | Chocolate, some wines, certain chemicals | Often overlooked — chocolate melts above 15°C |
| Controlled room temp | 15°C to 25°C (59°F to 77°F) | Most pharmaceuticals, cosmetics, electronics | Must document excursions. GDP compliance for pharma |

- [!] A single temperature excursion can void an entire pharma shipment worth millions. Always require continuous monitoring with data loggers and real-time alerts.

### 5.4 Inbound Operations
- Receiving and inspection (quantity, damage, documentation check)
- Put-away (slotting optimization — fast movers near dock)
- Inventory record creation (WMS entry)
- [!] Discrepancy between ASN (advance shipping notice) and actual receipt

### 5.5 Inventory Management
- Cycle counting vs. full physical inventory
- **FIFO** (First In First Out): Default for most goods. Required for perishables.
- **FEFO** (First Expired First Out): Pharma, food, cosmetics — anything with expiry dates.
- **LIFO** (Last In First Out): Only for non-perishable commodities where tax accounting benefits apply.
- Zone-based: Group high-velocity SKUs nearest to packing stations. A-zone (<5 ft walk) for top 20% SKUs.
- Safety stock calculation → see §1.3 formulas
- [!] Inventory shrinkage (theft, damage, mis-picks, system errors)
- [!] Obsolescence risk for slow-moving stock

### 5.6 Outbound Operations
- Order picking (piece, case, pallet level)
- Packing and quality check
- Staging for carrier pickup
- Loading and shipment confirmation
- [!] Mis-pick → wrong item shipped → return + re-ship cost

### 5.7 3PL Evaluation & Pricing
- **Must-haves:** WMS integration (API or EDI), real-time inventory visibility, SLA with penalties
- **Key metrics:** cost per unit shipped, order accuracy (target >99.5%), on-time ship rate (target >99%), inventory accuracy (target >99.5%)
- **Red flags:** no real-time visibility, manual processes, unwillingness to share audit data
- **Typical pricing:** pick fee ($0.20-0.50/pick) + pack fee ($0.50-2.00/order) + storage ($15-45/pallet/month) + receiving ($25-50/pallet)

### 5.8 Warehouse Technology
- WMS (Warehouse Management System) — the system of record
- RF/barcode scanning for accuracy
- Automated storage and retrieval (AS/RS)
- Robotics (AMR, goods-to-person)
- [?] Level of automation depends on volume, SKU count, labor cost

**Standards:** GS1 for identifiers, EDIFACT DESADV for ASN, EDI 945/947 for warehouse transactions

---

## 6. ORDER MANAGEMENT & FULFILLMENT

**What happens here:** Customer demand is captured, validated, allocated, and orchestrated into physical fulfillment.

### 6.1 Order Capture
- Order entry (EDI 850, API, portal, email, phone)
- Order validation (credit check, inventory availability, pricing)
- [?] ATP (available-to-promise) vs. CTP (capable-to-promise)
- [!] Order entry errors (wrong SKU, wrong quantity, wrong address)

### 6.2 Order Allocation & Promising
- Inventory reservation against available stock
- Sourcing logic (which warehouse, which supplier, which manufacturing line)
- Delivery date calculation (lead time + transit time + buffer)
- [?] Split shipment vs. hold for complete order
- [$$] Split shipments multiply freight cost

### 6.3 Fulfillment Orchestration
- Pick/pack/ship workflow triggering
- Carrier selection and rate shopping
- Shipping label and document generation
- [?] Parcel vs. LTL vs. FTL vs. intermodal decision (see §7.1 for mode selection)
- [!] Carrier capacity unavailable at peak season

### 6.4 Order Modification & Cancellation
- Change order processing (quantity, date, address changes)
- Cancellation handling (inventory de-allocation, carrier cancellation)
- [!] Change request arrives after shipment has left warehouse
- [!] Partial cancellation on multi-line orders

### 6.5 B2B vs. B2C Fulfillment
- B2B: Pallet/case quantities, compliance labeling (retailer-specific), routing guides, chargeback risk
- B2C: Each-pick, consumer packaging, return label inclusion, last-mile carrier integration
- [!] B2B retailer chargebacks for non-compliance (wrong label, late shipment, wrong quantity)

**Standards:** EDI 850/855/856/810, GS1 for identifiers, retailer-specific routing guides

---

## 7. FREIGHT & TRANSPORTATION

**What happens here:** Physical movement of goods from origin to destination across one or more modes.

### 7.1 Mode Selection Decision Matrix

| Factor | Ocean | Air | Rail | Truck |
|---|---|---|---|---|
| Cost per kg (approx) | $0.05-0.30 | $2.50-8.00 | $0.10-0.50 | $0.10-0.80 |
| Transit (Asia→US West) | 14-25 days | 2-5 days | N/A | N/A |
| Transit (Asia→Europe) | 28-40 days | 3-7 days | 15-20 days | N/A |
| Transit (US cross-country) | 7-14 days | 1-3 days | 3-7 days | 3-5 days |
| Best for | >2 CBM, cost-driven | <500kg urgent, high-value | China-EU mid-speed | Domestic, <1500 mi |
| Min booking | 1 CBM (LCL) | 1 kg | 1 container | 1 pallet |
| Carbon intensity | Medium | Highest (10-15x ocean) | Lowest | High |

**Decision logic:**
- Value-to-weight ratio > $50/kg → consider air
- Lead time buffer < 5 days → must air
- Volume > 15 CBM → FCL ocean (cheaper than LCL)
- China to Europe, 15-20 day tolerance → rail (best cost/speed balance)

### 7.2 Ocean Freight

**FCL** (Full Container Load): you rent the whole container. Cost: $1,500-8,000 per container depending on lane/season.
**LCL** (Less than Container Load): shared container. Cost: $50-120 per CBM. Higher per-unit cost but lower total for small shipments.
Breakeven: FCL becomes cheaper than LCL at roughly 10-12 CBM.
Peak season: Aug-Oct (pre-holiday). Rates can 2-4x. Book 4-6 weeks ahead.

**Container Specifications:**

| Type | External (L×W×H ft) | Internal (L×W×H ft) | Capacity | Max payload |
|---|---|---|---|---|
| 20' Standard | 20×8×8.5 | 19.3×7.7×7.8 | 33.1 CBM | 28,200 kg |
| 40' Standard | 40×8×8.5 | 39.5×7.7×7.8 | 67.6 CBM | 28,750 kg |
| 40' High Cube | 40×8×9.5 | 39.5×7.7×8.8 | 76.2 CBM | 28,560 kg |
| 20' Reefer | 20×8×8.5 | 17.8×7.5×7.3 | 28.3 CBM | 27,400 kg |
| 40' Reefer | 40×8×9.5 | 37.8×7.5×8.4 | 59.3 CBM | 29,520 kg |
| 20' Open Top | 20×8×8.5 | 19.3×7.7×7.7 | 32.1 CBM | 28,100 kg |
| 40' Flat Rack | 40×8×8.5 | 39.5×7.2×6.5 | N/A | 39,200 kg |

- [!] Blank sailings, port congestion, container shortage
- [!] Overbooking / rolled containers (carrier bumps your cargo to next vessel)

### 7.3 Air Freight
- General cargo, express, charter
- Transit: 1-5 days
- Dimensional weight: 1 CBM = 167 kg (IATA standard)
- [$$] 4-8x more expensive than ocean per kg
- [!] Capacity constraints during peak; dimensional weight pricing surprises

### 7.4 Truck (FTL/LTL)
- FTL: Full truckload (dry van, reefer, flatbed)
- LTL: Less than truckload (shared space, hub-and-spoke)
- [!] Driver shortage, hours-of-service regulations, detention/demurrage

**US LTL Freight Classes** (determines LTL pricing, based on density):

| Class | Density (lbs/cu ft) | Example goods |
|---|---|---|
| 50 | 50+ | Sand, bricks, nuts/bolts |
| 55 | 35-50 | Hardwood flooring, cement |
| 60 | 30-35 | Car parts, steel |
| 65 | 22.5-30 | Bottled beverages, books |
| 70 | 15-22.5 | Food items, auto engines |
| 77.5 | 13.5-15 | Tires, bathroom fixtures |
| 85 | 12-13.5 | Crated machinery |
| 92.5 | 10.5-12 | Computers, refrigerators |
| 100 | 9-10.5 | Wine cases, boat covers |
| 110 | 8-9 | Cabinets, framed artwork |
| 125 | 7-8 | Small appliances |
| 150 | 6-7 | Furniture, auto sheet metal |
| 175 | 5-6 | Clothing, couches |
| 200 | 4-5 | Mattresses, snowmobiles |
| 250 | 3-4 | TVs, aircraft parts |
| 300 | 2-3 | Kayaks, assembled chairs |
| 400 | 1-2 | Lightweight furniture |
| 500 | <1 | Ping pong balls, inflatables |

- [!] **Freight class trap:** Carriers reclassify and bill at the correct class if you declare wrong. Always measure actual density. Reclassification fees are $50-150+ per shipment.

### 7.5 Rail & Intermodal
- Intermodal (container on rail)
- Bulk (tank cars, hopper cars)
- China-EU rail: 15-20 days (best cost/speed balance for this lane)
- [!] Limited flexibility, fixed schedules, last-mile still needs truck
- [?] Through bill of lading vs. separate bills per leg
- [!] Handoff points between modes are where things break

### 7.6 Carrier Selection & Booking
- Rate negotiation (contract rates vs. spot market)
- Carrier vetting (safety record, insurance, certifications)
- Booking confirmation and space allocation
- [?] Direct service vs. transshipment (fewer handoffs vs. more route options)

**Major Carrier SCAC Codes:**

| SCAC | Carrier | Mode |
|---|---|---|
| MAEU | Maersk | Ocean |
| CMDU | CMA CGM | Ocean |
| MSCU | MSC (Mediterranean Shipping Co) | Ocean |
| EGLV | Evergreen | Ocean |
| COSU | COSCO | Ocean |
| HLCU | Hapag-Lloyd | Ocean |
| ONEY | ONE (Ocean Network Express) | Ocean |
| YMLU | Yang Ming | Ocean |
| ZIMU | ZIM | Ocean |
| FDEG | FedEx Ground | Truck/Parcel |
| FXFE | FedEx Freight | LTL |
| JBHT | J.B. Hunt | Truck/Intermodal |
| SNLU | Schneider | Truck |
| ODFL | Old Dominion | LTL |
| SAIA | Saia | LTL |
| XPOL | XPO Logistics | LTL |

### 7.7 Documentation
- **Bill of Lading (B/L)** — the critical document
  - Master B/L (carrier-issued) / House B/L (forwarder-issued)
  - [?] Negotiable vs. non-negotiable (affects ownership transfer)
  - [!] B/L discrepancies → cargo hold at destination
- **Air Waybill (AWB)** — always non-negotiable
- **CMR** (road) / **CIM** (rail) waybills
- **Packing list** — what's in the shipment
- **Commercial invoice** — value declaration for customs
- **Certificate of origin** — for preferential duty rates
- [!] Document errors are the #1 cause of shipment delays

**Documentation checklist by shipment type:**

All international: commercial invoice, packing list, B/L or AWB.
US imports add: ISF 10+2 (24 hrs before vessel loading), CBP Form 7501, customs bond.
EU imports add: ENS (Entry Summary Declaration), SAD (Single Administrative Document), EORI number.
Dangerous goods add: SDS, DG declaration, UN number/class/packing group.

### 7.8 Freight Forwarding
- The freight forwarder is the orchestrator (often the agent's primary interface)
- Consolidation (grouping multiple shippers' cargo) / deconsolidation at destination
- Carrier management across modes
- [?] Asset-based (own trucks/warehouses) vs. non-asset (pure brokerage)
- [!] Forwarder insolvency risk (who holds your cargo?)

### 7.9 Pricing, Surcharges & Cost Structure

**Ocean:** Base rate + BAF + CAF + THC + EBS + GRI
**Air:** Rate per kg (actual or volumetric) + fuel surcharge + security surcharge + handling
**Truck:** Per mile/km + fuel surcharge + accessorial charges (liftgate, inside delivery, detention)

**Surcharge reference:**

| Surcharge | What it means | Typical range |
|---|---|---|
| BAF (Bunker Adjustment Factor) | Fuel cost fluctuation | $200-800/container |
| CAF (Currency Adjustment Factor) | Currency fluctuation protection | Varies |
| PSS (Peak Season Surcharge) | Aug-Oct premium | $200-1,000/container |
| GRI (General Rate Increase) | Carrier-announced rate hike (usually quarterly) | Varies |
| THC (Terminal Handling Charge) | Port handling at origin and destination | $100-300/container |
| Detention | Container held beyond free time after pickup | $75-200/day (4-7 free days typical) |
| Demurrage | Container sitting at port/terminal beyond free time | $100-300/day (3-5 free days typical) |
| Per diem | Chassis usage (US-specific) | $25-75/day |

- [$$] **D&D trap:** A 40' container sitting 10 days over free time can rack up $2,000+ in charges. Always track free time dates.
- [!] Hidden surcharges not quoted upfront

### 7.10 Parcel Carrier Size & Weight Limits

| Carrier | Max weight | Max size | Oversize threshold |
|---|---|---|---|
| UPS Ground | 150 lbs (68 kg) | 165" (L+2W+2H) | >96" length or >130" L+girth |
| FedEx Ground | 150 lbs (68 kg) | 165" (L+2W+2H) | >96" length or >130" L+girth |
| USPS Priority | 70 lbs (31.7 kg) | 108" combined L+girth | >1 cu ft triggers DIM pricing |
| USPS Parcel Select | 70 lbs (31.7 kg) | 130" combined L+girth | >1 cu ft triggers DIM pricing |

- Girth formula: 2 × width + 2 × height (length is the longest side)
- Oversize surcharges: $30-90 per package
- Additional handling triggers: not fully encased in cardboard, cylindrical, metal/wood, >70 lbs, >48" on any side

### 7.11 Cold Chain in Transit
- Temperature monitoring (data loggers, IoT sensors)
- Reefer container settings and pre-cooling
- Temperature excursion protocols
- [!] Break in cold chain → product loss → liability dispute
- [!] Who is liable during handoff between carriers?

**Standards:** DCSA for ocean events, IATA ONE Record for air, FIATA documents, UN/LOCODE for locations

---

## 8. CUSTOMS, COMPLIANCE & BORDER CONTROL

**What happens here:** Goods cross international borders — duties are assessed, regulations are enforced, sovereignty is exercised.

### 8.1 HS Code Classification
- Structure: 2-digit (chapter) → 4-digit (heading) → 6-digit (subheading, internationally harmonized) → 8-10 digit (country-specific)
- Classification determines duty rate, quota applicability, regulatory requirements
- GRI (General Rules of Interpretation): classify by (1) specific description, (2) essential character, (3) last heading in numerical order
- [?] When uncertain: file for a binding ruling (US: CBP ruling, EU: BTI)
- [!] Misclassification → wrong duty rate → audit risk, penalties, seizure up to 4x duty value
- [!] Same product can have different HS codes depending on material composition
- [!] "Parts and accessories" often have different duty rates than finished goods

**Common HS Code Chapters (Top Traded):**

| Chapter | Description | Examples |
|---|---|---|
| 84 | Machinery & mechanical appliances | Engines, pumps, computers, printers |
| 85 | Electrical machinery & equipment | Semiconductors, phones, batteries, cables |
| 87 | Vehicles & parts | Cars, trucks, auto parts |
| 39 | Plastics & articles thereof | Packaging, tubes, sheets, films |
| 73 | Iron & steel articles | Fasteners, containers, structures |
| 90 | Optical, medical, measuring instruments | Sensors, medical devices, cameras |
| 94 | Furniture, lighting, prefab buildings | Chairs, lamps, mattresses |
| 61-62 | Apparel (knitted / woven) | T-shirts, suits, dresses |
| 64 | Footwear | Shoes, boots, sandals |
| 30 | Pharmaceutical products | Drugs, vaccines, medical preparations |
| 27 | Mineral fuels & oils | Petroleum, natural gas, coal |
| 71 | Precious metals & stones | Gold, diamonds, jewelry |
| 44 | Wood & articles thereof | Lumber, plywood, furniture parts |
| 72 | Iron & steel (raw) | Raw steel, flat-rolled products |
| 76 | Aluminum & articles thereof | Foil, extrusions, structures |

### 8.2 Customs Valuation Methods (WTO priority order)

Customs determines dutiable value using these 6 methods in strict order. Only move to next if prior method cannot be applied:

1. **Transaction value** — actual price paid. Used ~90% of the time. Must be arm's-length sale.
2. **Transaction value of identical goods** — same goods, same country, same time period.
3. **Transaction value of similar goods** — functionally equivalent goods.
4. **Deductive method** — resale price in importing country minus margins, duties, transport.
5. **Computed method** — cost of materials + fabrication + profit + general expenses.
6. **Fallback method** — reasonable means, flexible application of methods 1-5.

- [!] Related-party transactions (parent↔subsidiary) get extra scrutiny. Prepare transfer pricing documentation.
- [!] Valuation disputes — customs authority disagrees with declared value

### 8.3 Tariff & Duty Rates

| Market | Tariff schedule | Avg duty | Range |
|---|---|---|---|
| US | HTSUS | ~3.4% | 0-37.5% |
| EU | Combined Nomenclature | ~5.1% | 0-17% |
| China | — | ~7.5% | 0-65% |

**De minimis thresholds** (below which no duty/tax applies):

| Country | Threshold | Notes |
|---|---|---|
| US | $800 | Highest in world |
| EU | €150 (duty), €0 (VAT) | VAT always applies |
| UK | £135 | — |
| Canada | CAD $20 | One of the lowest |
| Australia | AUD $1,000 | — |
| Japan | ¥10,000 | — |

- MFN (Most Favored Nation) duty rates
- Preferential rates under trade agreements
- Anti-dumping and countervailing duties
- Section 301 / safeguard tariffs
- VAT / GST on imports
- [$$] Duty optimization: FTZ, bonded warehousing, tariff engineering, first sale valuation
- [!] Tariff changes can happen with little notice (political risk)

### 8.4 Trade Agreements

| Agreement | Coverage | Key requirement |
|---|---|---|
| USMCA | US, Mexico, Canada | Rules of origin, certificate of origin |
| EU FTAs | Extensive network | EUR.1 certificates |
| RCEP | 15 Asia-Pacific countries | Gradual tariff reduction through 2035 |
| CPTPP | 11 Pacific Rim (not US/China) | Regional value content 35-55% |

- To qualify for preferential rates: product must meet origin rules (tariff shift, substantial transformation, regional value content)
- [!] Trade agreement rules of origin are extremely complex

### 8.5 Free Trade Zones (FTZ)
- **When to use FTZ:**
  - Importing components for assembly → pay duty on finished product rate if lower (inverted tariff benefit)
  - Re-exporting goods → no duty paid at all
  - Holding inventory pre-sale → defer duty until goods enter domestic commerce
  - Quality inspection → reject defective goods before paying duty
- **When NOT worth it:** low volume, simple pass-through, goods already at 0% duty rate

### 8.6 Regulatory Compliance by Sector
- **Food:** FDA (US), EFSA (EU), CFIA (Canada) — prior notice, facility registration, FSVP
- **Pharmaceuticals:** GDP, controlled substance permits, serialization (DSCSA)
- **Chemicals:** TSCA (US), REACH (EU), GHS labeling
- **Consumer products:** CPSIA (US), CE marking (EU), product safety testing
- **Agriculture:** Phytosanitary certificates, fumigation, ISPM-15 wood packaging
- **Textiles:** Fiber content labeling, flammability testing
- [!] Non-compliance → cargo detained → storage charges accumulate → delivery fails

### 8.7 Customs Brokerage
- Licensed customs broker (required in most countries)
- Power of attorney / authorization
- Entry preparation and filing
- Duty payment and drawback claims
- [?] In-house customs team vs. broker
- [!] Broker errors can result in penalties to the importer of record

### 8.8 Trade Compliance Programs & Security Filings
- C-TPAT (US), AEO (EU), PIP (Canada) — trusted trader programs
- ISF (Importer Security Filing, "10+2") — must file 24 hours before vessel loading
- AMS (Automated Manifest System) — advance cargo information
- [!] ISF late filing → $5,000 penalty per occurrence

### 8.9 Export Controls & Sanctions
- US: EAR (Commerce Dept) and ITAR (State Dept)
- EAR: check ECCN classification → check Commerce Country Chart → determine if license needed
- ITAR: defense articles, almost always need license for export
- **Denied party screening — ALWAYS screen all parties** (buyer, consignee, end user, intermediaries) against:
  - US: SDN List, Entity List, Denied Persons List, Unverified List
  - EU: Consolidated Sanctions List
  - UN: Security Council Sanctions
- [!] Screening must happen at EVERY transaction, not just onboarding
- [!] Beneficial ownership obscures sanctioned parties
- [!] Red flags: unusual routing, reluctance to state end-use, military addresses, cash payment for high-value goods
- [!] Non-compliance → criminal liability

**Standards:** WCO HS nomenclature, WTO valuation agreement, GS1 EPCIS for chain of custody

---

## 9. LAST MILE DELIVERY

**What happens here:** Goods travel from the last distribution point to the final recipient.

### 9.1 Carrier Selection by Profile

| Carrier type | Best for | Typical cost (US domestic) |
|---|---|---|
| National (UPS/FedEx/USPS) | Broad coverage, reliable tracking | $8-25 per parcel |
| Regional | Lower cost in coverage area, faster local | $5-15 per parcel |
| Crowdsourced (Uber-style) | Same-day urban delivery | $10-30 per delivery |
| White glove | Heavy/bulky goods, installation | $100-500 per delivery |

### 9.2 Dimensional Weight Pricing
Carriers charge the GREATER of actual weight or dimensional weight:
- UPS/FedEx DIM divisor: 5,000 (metric) or 139 (imperial)
- USPS: DIM pricing for packages >1 cubic foot
- Formula: (L × W × H in inches) ÷ 139 = DIM weight in lbs
- [$$] Lightweight, bulky items (pillows, lampshades) get hit hardest by DIM pricing

### 9.3 B2B Last Mile
- Delivery appointment scheduling
- Dock/warehouse receiving requirements
- Lumper services (unloading labor)
- POD (proof of delivery) with exceptions noted
- [!] Missed appointment → reschedule fee + detention charges
- [!] Receiver refuses delivery (damage, wrong product, no PO)

### 9.4 B2C Last Mile
- Parcel carrier delivery (USPS, UPS, FedEx, DHL, regional carriers)
- Delivery options (standard, express, same-day)
- Delivery notifications and tracking
- [?] Deliver to door vs. locker vs. pickup point vs. neighbor
- [!] Failed delivery attempts → redelivery cost, customer frustration
- [!] Porch piracy / theft after delivery
- [$$] Last mile is 40-50% of total shipping cost

### 9.5 Proof of Delivery
- Signature capture (electronic or physical)
- Photo proof of delivery
- Geolocation timestamp
- Exception documentation (damage, partial, refused)
- [!] Disputes over whether delivery actually occurred

**Standards:** GS1 EPCIS for delivery events, carrier-specific APIs

---

## 10. FINANCIAL SETTLEMENT & INSURANCE

**What happens here:** The physical supply chain triggers financial flows — invoices, payments, reconciliation, claims.

### 10.1 Landed Cost Calculator
```
Landed cost =
  Product cost (unit price × quantity)
  + International freight
  + Marine/cargo insurance (typically 0.3-0.5% of CIF value)
  + Customs duties (duty rate × dutiable value)
  + Customs broker fee ($125-250 per entry)
  + Port/terminal charges (THC)
  + Domestic freight (port to warehouse)
  + Handling/warehousing fees
  + Inspection fees (if applicable)
  + Currency conversion cost (bank spread, typically 1-3%)
```

- [!] **Most common landed cost mistake:** Using FOB price as dutiable value when importing CIF. US customs uses transaction value (typically FOB + additions). EU customs uses CIF value. This difference can swing duty by 10-15%.

### 10.2 Payment Methods

| Term | Risk to buyer | Risk to seller | Use when |
|---|---|---|---|
| Advance payment (T/T before ship) | Highest | Lowest | New/untrusted supplier, low leverage |
| Letter of Credit (L/C) | Low | Low | High value, international, unfamiliar parties |
| Documentary Collection (D/P) | Medium | Medium | Established relationship, moderate trust |
| Open Account (Net 30/60/90) | Lowest | Highest | Strong relationship, buyer has leverage |

- L/C cost: 0.75-1.5% of value + bank fees ($500-1,500)
- [!] L/C documents must match terms EXACTLY (discrepancy = non-payment)
- [?] Payment method choice depends on trust level, country risk, transaction size
- Consider credit insurance (0.1-0.5% of insured value) for open account with foreign buyers

### 10.3 Invoice & Reconciliation
- 3-way match: PO vs. receipt vs. invoice
- Freight audit (compare quoted rates to invoiced rates)
- Duty drawback claims (recover duties on re-exported goods)
- [$$] Freight audit typically finds 2-5% overcharges
- [!] Reconciliation across multiple currencies, tax jurisdictions, and payment terms

### 10.4 Insurance Claims
- Cargo insurance (all-risk, named perils, warehouse-to-warehouse)
- Filing claims (proof of loss, survey report, supporting documents)
- Subrogation (insurer recovers from responsible party)
- [!] Claims denied due to inadequate documentation or packaging
- [!] General average in ocean shipping (all parties share loss proportionally)

### 10.5 Dispute Resolution
- Commercial disputes (quality, quantity, timing)
- Freight claims (damage, loss, delay)
- Customs penalty appeals
- [?] Arbitration vs. litigation vs. mediation
- [!] Jurisdiction and governing law clauses matter enormously

**Standards:** ISO 20022 for payment messages, SWIFT for banking, EDI 810/820 for invoices/payments, ICC UCP 600 for L/C rules

---

## 11. RETURNS & REVERSE LOGISTICS

**What happens here:** Goods flow backwards — from customer/consignee back through the chain.

### 11.1 Return Rate Benchmarks

| Category | Return rate |
|---|---|
| Apparel | 20-30% |
| Electronics | 8-15% |
| Home goods | 10-15% |
| Average e-commerce | 15-20% |
| B2B | 2-5% |

### 11.2 Return Authorization
- RMA (Return Merchandise Authorization) process
- Return reason classification (defective, wrong item, no longer needed, damaged in transit)
- Return eligibility rules (time window, condition requirements)
- [?] Restocking fees vs. free returns

### 11.3 Reverse Transportation
- Return shipping label generation
- Carrier pickup or drop-off
- [$$] Return shipping cost allocation (seller-paid vs. buyer-paid)
- [!] International returns trigger re-import duties and customs paperwork

### 11.4 Inspection & Disposition

```
Returned item received
├── Inspection passed, original packaging intact → Restock (aim for 40-60% of returns)
├── Inspection passed, packaging damaged → Repackage and restock
├── Minor defect, repairable → Refurbish → Sell as refurbished (recover 50-70% value)
├── Major defect, not cost-effective to repair → Liquidate (recover 5-20% value)
├── Hazardous / regulated → Dispose per regulations
└── Recall item → Quarantine → Follow recall procedure
```

- [!] Disposition delays tie up working capital
- [!] Refund issued before return received → fraud risk

### 11.5 Sustainability & Circular Economy
- Product take-back programs
- Packaging return and reuse
- End-of-life recycling obligations (WEEE, EPR)
- [!] Regulatory obligations for product end-of-life vary by country

**Standards:** GS1 for return tracking, retailer-specific return policies

---

## 12. VISIBILITY, TRACKING & DATA

**What happens here:** Information flows alongside (or ahead of) physical goods — the nervous system of the supply chain.

### 12.1 Shipment Tracking
- Carrier tracking events (pickup, in-transit, out-for-delivery, delivered)
- Container/vessel tracking (AIS data for ocean)
- Milestone-based tracking vs. continuous GPS tracking
- [?] Event-driven (push) vs. polling (pull) architecture
- [!] Tracking data gaps during handoffs between carriers/modes

### 12.2 Supply Chain Visibility Platforms
- Multi-carrier, multi-mode visibility
- ETA prediction (ML-based, accounting for weather, congestion, historical patterns)
- Exception alerting (shipment delayed, temperature excursion, customs hold)
- [?] Build vs. buy visibility platform
- [!] Data quality depends on carrier integration quality

### 12.3 Data Standards & Interoperability
- **GS1 EPCIS 2.0** — the standard for supply chain event data
  - What (object), Where (location), When (time), Why (business context)
  - ObjectEvent, AggregationEvent, TransactionEvent, TransformationEvent
- **DCSA** — ocean shipping event standards
- **IATA ONE Record** — air cargo data model
- **EDIFACT/X12** — legacy EDI (still dominant in many industries)
- **JSON/REST APIs** — modern integration
- [!] No single standard covers all modes and all parties
- [!] Data translation between standards is lossy

### 12.4 EDI Transaction Sets (Most Common)

| Code | Function | Direction |
|---|---|---|
| 850 | Purchase Order | Buyer → Seller |
| 855 | PO Acknowledgment | Seller → Buyer |
| 856 | Advance Ship Notice (ASN) | Seller → Buyer |
| 810 | Invoice | Seller → Buyer |
| 997 | Functional Acknowledgment | Either direction |
| 214 | Shipment Status | Carrier → Shipper |
| 204 | Motor Carrier Load Tender | Shipper → Carrier |
| 990 | Response to Load Tender | Carrier → Shipper |

- EDI: Legacy systems, large retailers that mandate it, high-volume B2B
- API: Modern systems, real-time needs, custom integrations, D2C
- Many large retailers (Walmart, Amazon, Target) still require EDI. Budget $5K-15K for EDI setup + $200-500/month for VAN.

### 12.5 Document Digitization
- Electronic Bill of Lading (eBL) — DCSA, Bolero, essDOCS
- Electronic customs filing
- Digital certificates of origin
- [?] Legal recognition of electronic documents varies by country
- [!] Paper-to-digital transition is uneven — some ports/carriers still require paper

### 12.6 Analytics & Intelligence
- Demand forecasting
- Lead time analysis
- Carrier performance benchmarking
- Cost-to-serve analysis
- Network optimization (where to hold inventory, which routes to use)
- [$$] Data-driven decisions can reduce logistics cost 5-15%

**Standards:** GS1 EPCIS 2.0, DCSA, IATA ONE Record, UN/CEFACT, ISO 28000

---

## 13. RISK, RESILIENCE & EXCEPTION MANAGEMENT

**What happens here:** Things go wrong. This node is about anticipating, detecting, and recovering from disruptions.

### 13.1 Supply Disruption Probability Matrix

| Risk | Probability | Impact | Mitigation |
|---|---|---|---|
| Supplier bankruptcy | Low | Critical | Dual-source critical components, monitor financial health |
| Port congestion | Medium | High | Buffer inventory, alternative port routing |
| Natural disaster | Low | Critical | Geographic diversification, force majeure clauses |
| Geopolitical (tariffs, sanctions) | Medium | High | Nearshoring options, tariff engineering, FTZ usage |
| Labor strike (port/transport) | Medium | Medium-High | Advanced shipping before contract expiry dates |
| Pandemic disruption | Low | Critical | Safety stock increase, multi-region sourcing |
| Cyber attack on logistics systems | Medium | High | Backup manual processes, redundant systems |
| Raw material shortage | Medium | Medium | Forward contracts, substitution planning |
| Currency fluctuation | High | Medium | Hedging, multi-currency contracts |
| Regulatory change | Medium | Medium-High | Compliance monitoring, scenario planning |

### 13.2 Exception Management
- Shipment delay handling (re-route, expedite, notify customer)
- Damage at receipt (claim filing, replacement sourcing)
- Customs hold resolution (provide additional documents, pay duties, get inspection)
- Carrier no-show (backup carrier activation)
- [!] Exception resolution speed directly impacts customer satisfaction and cost

### 13.3 Contingency Planning
- For every critical path, identify the alternative route that adds the fewest days
- Maintain relationships with backup carriers (don't just list them — actually ship with them occasionally)
- Pre-clear alternative ports of entry (have customs bonds and broker relationships ready)
- Keep 2-4 weeks of safety stock for A-items during high-risk periods
- [!] Plans that aren't tested don't work when needed

### 13.4 Business Continuity
- Disaster recovery plans for warehouses and systems
- Alternative port/airport routing
- Emergency supplier activation
- Communication protocols (who gets notified, in what order, how fast)

### 13.5 Compliance & Audit
- Record retention requirements (5-7 years for customs, varies by country)
- Audit trail completeness
- Regulatory examination readiness
- [!] Incomplete records during audit → assumed non-compliance → penalties

---

## 14. SUSTAINABILITY & ESG

**What happens here:** Environmental impact is measured, reported, and reduced across the chain.

### 14.1 Scope 3 Emissions
- Scope 3 = typically 70-90% of a company's total emissions
- This is the supply chain scope — upstream and downstream

**Emissions by transport mode:**

| Mode | CO2 per ton-km |
|---|---|
| Ocean | ~10-15g |
| Rail | ~20-30g |
| Truck | ~60-100g |
| Air | ~500-600g |

- Air freight produces 10-15x more CO2 than ocean per ton-km

### 14.2 Reporting Frameworks
- GHG Protocol (voluntary, widely adopted)
- CDP (disclosure platform)
- CSRD (EU mandatory reporting)
- GLEC Framework / ISO 14083 (transport emissions quantification)

### 14.3 Carbon Border Mechanisms
- CBAM (EU Carbon Border Adjustment Mechanism): importers must report and eventually pay for embedded carbon in steel, aluminum, cement, fertilizers, electricity, hydrogen
- [!] CBAM scope is expanding — more product categories expected
- [$$] Carbon costs are becoming a real line item in landed cost calculations

### 14.4 Circular Economy & Waste
- Product take-back programs
- Packaging return and reuse
- End-of-life recycling obligations (WEEE, EPR)
- [!] Regulatory obligations vary by country
- [?] Sustainability as cost center vs. competitive advantage

**Standards:** GLEC Framework, ISO 14083, GHG Protocol, CSRD, CBAM

---

## 15. AGENTS, AUTOMATION & COORDINATION

**What happens here:** Autonomous agents operate within this taxonomy — discovering each other, negotiating, transacting, and coordinating across nodes.

### 15.1 Agent Roles in Supply Chain
- **Shipper agent** — represents cargo owner, expresses intent (move X from A to B by date D)
- **Forwarder agent** — orchestrates multi-modal routing, consolidation, documentation
- **Carrier agent** — offers capacity, provides tracking, issues transport documents
- **Customs agent** — handles classification, filing, duty payment, compliance
- **Warehouse agent** — manages inventory, pick/pack/ship, storage optimization
- **Finance agent** — handles payments, L/C, insurance, reconciliation
- **Visibility agent** — aggregates tracking data, predicts ETAs, alerts on exceptions

### 15.2 Agent Discovery & Capabilities
```yaml
# Example: Forwarder agent announces capabilities
agent_id: "did:web:forwarder.example"
type: "freight_forwarder"
capabilities:
  modes: [ocean_fcl, ocean_lcl, air, truck]
  coverage:
    origin: [CNSHA, CNSHE, CNNGB]  # Shanghai, Shenzhen, Ningbo
    destination: [USLAX, USNYC, USLGB]  # LA, NYC, Long Beach
  services: [consolidation, customs_brokerage, warehousing, insurance]
  certifications: [C-TPAT, AEO, NVOCC_FMC]
  standards: [DCSA, IATA_ONE_Record, GS1_EPCIS, EDIFACT]
sla:
  quote_response: "15_minutes"
  booking_confirmation: "4_hours"
  document_issuance: "24_hours"
```

### 15.3 Coordination Patterns
- **Request-for-quote (RFQ):** Shipper agent broadcasts intent → forwarder/carrier agents respond with quotes
- **Multi-step booking:** Quote → Hold → Book → Document → Track → Deliver → Settle
- **Event streaming:** Carrier agents emit EPCIS events → visibility agents aggregate → shipper agents consume
- **Exception escalation:** Agent detects anomaly → escalates to human or triggers contingency workflow
- [?] Fully autonomous vs. human-in-the-loop at decision points
- [!] Agent trust bootstrapping — how does a new agent establish reputation?

### 15.4 Data Exchange Between Agents
- Messages use domain-specific schemas (cargo, route, event, document, payment)
- Translation layer between standards (DCSA ↔ EDIFACT ↔ ONE Record ↔ EPCIS)
- Signed attestations for non-repudiation
- [!] Schema versioning — agents running different versions
- [!] Eventual consistency — events arrive out of order

### 15.5 Trust & Identity
- DID-based identity (did:web, did:key)
- Verifiable credentials for licenses, certifications, KYC/AML
- Reputation scoring based on transaction history
- [?] Centralized registry vs. decentralized web of trust
- [!] Key rotation and revocation

---

## APPENDIX A: DECISION MATRIX — WHICH NODE MATTERS MOST?

| Scenario | Critical Nodes | Key Risk |
|---|---|---|
| Perishable food import | 4 (DG/cold packaging), 5.3 (cold chain storage), 7.11 (cold chain transit), 8.6 (FDA/EFSA), 9 (speed) | Temperature excursion |
| High-value electronics | 2.3 (Incoterms/insurance), 7 (theft risk), 8.1 (HS classification), 10.4 (insurance) | Cargo theft, misclassification |
| Bulk commodity (grain, ore) | 3.3 (yield), 7.2 (ocean FCL), 8.3 (duties), 10.2 (L/C) | Price volatility, vessel delays |
| E-commerce parcel (B2C) | 6 (fulfillment speed), 7.1 (air/express), 8.3 (de minimis), 9.4 (last mile), 11 (returns) | Failed delivery, returns cost |
| Pharma / controlled substance | 3.2 (GMP quality), 4.2 (serialization), 5.3 (cold chain), 7.11 (cold chain), 8.6 (GDP/DEA), 12 (traceability) | Regulatory non-compliance |
| Hazardous materials | 4.4 (DG classification), 7 (carrier restrictions), 8.6 (regulatory), 13 (spill response) | Misdeclaration, safety incident |
| Automotive parts (JIT) | 2.1 (sourcing), 5.5 (safety stock vs JIT), 6.2 (delivery timing), 7 (reliability) | Production line stoppage |

---

## APPENDIX B: COMMON FAILURE MODES (RANKED BY FREQUENCY)

1. **Documentation errors** — wrong HS code, missing certificate, B/L discrepancy
2. **Timing failures** — late booking, missed cutoff, delayed customs clearance
3. **Communication gaps** — handoff between parties without information transfer
4. **Cost surprises** — demurrage, detention, accessorial charges, duty reassessment
5. **Quality issues** — damage in transit, temperature excursion, wrong product shipped
6. **Compliance failures** — regulatory hold, sanctioned party, missing permit
7. **Capacity constraints** — no space on vessel/aircraft, no trucks available, warehouse full
8. **System failures** — EDI rejection, API timeout, WMS outage, carrier tracking gap
9. **Payment disputes** — L/C discrepancy, invoice mismatch, currency conversion
10. **Force majeure** — weather, strike, pandemic, canal blockage, political instability

---

## APPENDIX C: REFERENCE DATA

### Major Ports (UN/LOCODE)

| Code | Port | Country | Notes |
|---|---|---|---|
| CNSHA | Shanghai | China | World's busiest container port |
| CNSZX | Shenzhen | China | Yantian + Shekou terminals |
| SGSIN | Singapore | Singapore | Major transshipment hub |
| NLRTM | Rotterdam | Netherlands | Europe's largest port |
| USLAX | Los Angeles | USA | Busiest US port complex (with Long Beach) |
| USLGB | Long Beach | USA | Adjacent to LA, handles larger vessels |
| USNYC | New York/Newark | USA | Largest US East Coast port |
| USSAV | Savannah | USA | Fastest-growing US port |
| DEHAM | Hamburg | Germany | Major North European hub |
| KRPUS | Busan | South Korea | Major Asian transshipment hub |
| AEJEA | Jebel Ali | UAE | Middle East hub, free zone |
| GBFXT | Felixstowe | UK | Largest UK container port |

### Weight & Volume Conversions

| Conversion | Value |
|---|---|
| 1 CBM | 35.315 cubic feet |
| 1 metric ton | 1,000 kg = 2,204.6 lbs |
| 1 TEU (usable capacity) | ~33 CBM |
| Ocean revenue ton | 1 CBM = 1,000 kg (charge whichever is greater) |
| Air volumetric weight | 1 CBM = 167 kg |

---

## APPENDIX D: STANDARDS REFERENCE MAP

```
IDENTIFICATION
├── GS1 GTIN .............. Product identification
├── GS1 SSCC .............. Logistics unit identification
├── GS1 GLN ............... Location identification
└── UN/LOCODE ............. Port and location codes

TRANSPORT DOCUMENTS
├── FIATA FBL/eFBL ........ Bill of lading (forwarder)
├── DCSA eBL .............. Electronic bill of lading (ocean)
├── IATA e-AWB ............ Electronic air waybill
└── UN/CEFACT ............. Trade document standards

EVENT TRACKING
├── GS1 EPCIS 2.0 ......... Supply chain events (cross-industry)
├── DCSA T&T .............. Ocean tracking and tracing
├── IATA ONE Record ....... Air cargo data sharing
└── ISO 28000 ............. Supply chain security

CUSTOMS & TRADE
├── WCO HS ................ Product classification
├── WTO Valuation ......... Customs value determination
├── WCO SAFE Framework .... Authorized trader programs
└── Country-specific ....... (HTS, CN, TARIC, etc.)

FINANCIAL
├── ISO 20022 ............. Payment messaging
├── SWIFT MT/MX ........... Banking messages
├── ICC UCP 600 ........... Letter of credit rules
└── ICC Incoterms 2020 .... Trade term definitions

SUSTAINABILITY
├── GLEC Framework ......... Emissions calculation
├── ISO 14083 ............. Transport emissions quantification
└── CSRD / CBAM ........... EU sustainability reporting / carbon border

COMMUNICATION / EDI
├── UN/EDIFACT ............ International EDI standard
├── ANSI X12 .............. North American EDI standard
├── JSON/REST APIs ........ Modern integration
└── AsyncAPI / WebSocket .. Event streaming
```

---

## APPENDIX E: GLOSSARY

| Term | Meaning |
|------|---------|
| **3PL** | Third-party logistics provider |
| **ASN** | Advance Shipping Notice |
| **AWB** | Air Waybill — air cargo transport document |
| **B/L** | Bill of Lading — transport contract and receipt for goods |
| **BAF** | Bunker Adjustment Factor — fuel surcharge |
| **CBM** | Cubic meter — standard volume measurement |
| **CFS** | Container Freight Station — where LCL cargo is consolidated |
| **CY** | Container Yard — where FCL containers are staged |
| **D&D** | Demurrage and Detention — charges for keeping containers too long |
| **DDP** | Delivered Duty Paid — seller bears all costs to buyer's door |
| **DID** | Decentralized Identifier — self-sovereign identity |
| **DIM** | Dimensional weight — volumetric weight calculation |
| **EORI** | Economic Operators Registration and Identification (EU) |
| **EPCIS** | Electronic Product Code Information Services — event tracking standard |
| **FCL** | Full Container Load |
| **FEFO** | First Expired, First Out — inventory rotation for perishables |
| **FOB** | Free on Board — risk transfers at port of loading |
| **FTZ** | Foreign Trade Zone — deferred duty area |
| **GRI** | General Rate Increase — carrier-announced rate hike |
| **HS Code** | Harmonized System Code — product classification for customs |
| **HTSUS** | Harmonized Tariff Schedule of the United States |
| **Incoterms** | International Commercial Terms — who bears risk/cost at each point |
| **ISF** | Importer Security Filing — pre-arrival cargo data (US) |
| **L/C** | Letter of Credit — bank-guaranteed payment instrument |
| **LCL** | Less than Container Load |
| **LTL** | Less than Truckload |
| **MOQ** | Minimum Order Quantity |
| **NVOCC** | Non-Vessel Operating Common Carrier — forwarder that issues own B/L |
| **POD** | Proof of Delivery |
| **RMA** | Return Merchandise Authorization |
| **SCAC** | Standard Carrier Alpha Code |
| **SDS** | Safety Data Sheet (for hazardous materials) |
| **SSCC** | Serial Shipping Container Code — pallet/unit load identifier |
| **TEU** | Twenty-foot Equivalent Unit — standard container measure |
| **THC** | Terminal Handling Charge |
| **TMS** | Transportation Management System |
| **UN/LOCODE** | United Nations Location Code — standard port/location identifier |
| **VAN** | Value Added Network (for EDI transmission) |
| **WMS** | Warehouse Management System |

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## HOW TO USE THIS FILE

**If you are an agent:**
1. Read this file top-to-bottom to understand the full supply chain problem space
2. Identify which nodes (1-15) are relevant to your current task
3. Use the formulas (§1.3, §10.1) to compute costs and quantities
4. Use the reference tables (§7.1, §7.2, §7.4, §8.1, §8.3) for operational data
5. Check the decision matrix (Appendix A) for scenario-specific guidance
6. Review failure modes (Appendix B) to anticipate problems
7. Use the standards reference (Appendix D) to determine what formats/protocols apply
8. Refer to node 15 for agent coordination patterns

**If you are a human:**
1. Use this as a checklist when planning supply chain operations
2. Use the `[?]` markers to identify decisions you need to make
3. Use the `[!]` markers to identify risks you need to mitigate
4. Use the `[$$]` markers to identify cost optimization opportunities
5. Use the reference tables for quick lookups during operations

**If you are building a system:**
1. Each numbered node maps to a potential microservice or module
2. The arrows in the overview graph show data/event flow dependencies
3. The standards reference maps to integration requirements
4. The agent section (15) provides the coordination protocol layer
5. The EDI table (§12.4) defines system integration touchpoints

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*This document is part of the [protocols.md](https://protocols.md) network.*
*License: CC-BY-4.0 — All rights reserved on code and structure. No MIT grant.*
*Contact: proofmdorg@gmail.com*