Challenge:

When dealing with international supply chains, one of the problems that can sometimes arise are dishonest overseas business partners. In this case, the company in Saudi Arabia that we were dealing with was always urging us to quickly move the shipments for their "best customer". No matter which customer the shipments were for, it was always their “best customer”. In addition, the rates that they were giving us weren’t leaving much profit for us. After rushing to get their shipments processed and sent, they were always claiming that there were problems with the documents, and would refuse to pay our invoices, in whole or in part.

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Action:

Given that they wanted to play this game, we changed the rules. We told them that we would send them copies the documents prior to releasing the shipment. They would have to approve the documents. If they didn’t approve, then they would have to list the errors which we would correct. They would then have to approve the revised documents before we sent the shipment. They were informed that it didn’t matter how urgent the shipment was,  since they wanted to play this game, then this was how it would be.

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The next shipment to their "best customer" was held until they signed off that the documents were okay. They actually didn’t sign off in time for us to send the shipment on the flight that it had been booked on. They complained, as the shipment was urgent, but we didn’t back down. Since they could see that we were serious, they signed off and the shipment moved.

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On a later shipment, they tried to say that documents that they had approved were not correct, and that they weren’t going to pay part of our invoice as a result. We responded that they had actually approved it, and hinted that they probably didn’t want to find out what would happen if they continued down this path (i.e. every single shipment would be held until this invoice was paid, and then they could explain to their customer why this was happening).

 

Result:

Eventually, they relented and stopped trying to squeeze us. This put our relationship on a different basis, and no further shipments went out without them signing off that the documents were in order. By being tough with them, we established boundaries. And we had no further difficulty with that partner going forward.

 

 

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