Welcome to this month s Magaya Insider newsletter.

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1 Do you like our Newsletter? Click Here & Tell us about it. Magaya Insider is Sponsored By Magaya Insurance Services provides concierge-style service for all your insurance needs. Contents the From the Editor Welcome to this month s Magaya Insider newsletter. Learn to use the new Denied Party Screening plug-in so you can compare the entities and parties in your Magaya system to ensure you are in compliance with this U.S. government exporting regulation. There s a lot of talk about how logistics affects total manufacturing process and costs. The Houston station of Distribution By Air makes the advantage real for their customers on site every day. See how in this month s case study. August 2014 Magaya Software YouTube Channel Featured this Month Magaya WMS Mobile: Get Control of your Warehouse and Inventory Data Creating Pickup Orders Click here to Subscribe to our channel and keep up to date with our latest training videos How to: Denied Party Screening In the Works New Customers: July 2014 Case Study: Distibution by Air Pricing Rules and Tiers Designed for wholesalers and companies that sell inventory, new pricing rules and tiers in Magaya software will offer a variety of ways to structure pricing of items. Just as the Magaya system enables you to set rates for cargo and carriers, you will soon be able to fine tune pricing of items. How it Will Work: Options for pricing will include: Set a sale for a certain time such as a holiday sale Define a Buy 1 Get 1 Free sale Set prices per customer, per item, or for all items in your Inventory Item Definitions list Round up prices or end prices in 99 cents The prices will be available for use in your Magaya Sales Orders and Commerce Quotations. This will help ensure the correct prices are given to the customer in these transactions, no matter what user creates the Sales Order or Quote. Look for this feature in an upcoming version of Magaya software.

2 the page 2 How To Denied Party Screening Introduction The Magaya Denied Party Screening plug-in helps your company comply with U.S. government export regulations that require verification of entities to determine if they are included on the list of denied individuals or companies. A Denied Party is any individual or company that has been denied exporting privileges and cannot import into or export from the U.S. because they have been sanctioned by the government for illegal acts. Failure to comply with these regulations is a violation of U.S. law and can result in fines, penalties, criminal or civil prosecution, and denial of export privileges. Magaya software includes a denied parties list which is updated regularly from the U.S. Bureau of Industry and Security (BIS), part of the U.S. Department of Commerce. The plug-in verifies entities in your Magaya system by comparing them to the U.S. Denied Party Screening list. First, activate the plug-in for your account, and then configure it to screen entities, vessels and shipments. Configure This plug-in needs to be configured to tell the system when you want to screen because there is a monthly service fee which includes a minimum quantity of screenings per month. If you go over the minimum, you will be charged per entity that you screen. To configure the Magaya Denied Party Screening plug-in, go to Maintenance > Configuration > Denied Party Screening. 1. Check the box Enable Denied Party Screening to activate the options below. These options include screening entities against the U.S. government list and screening for banned countries that you configure here. 2. Configure when the system performs the screening by setting these options: previous Screen new entities/contacts when creating them: This option tells the system to screen any new entity or contact as their profile is created. Screen entities/contacts when editing them. Screen shipments before filing to AES: This option tells the system to screen the entities in shipments before sending the EEI to AES.

3 the page 3 How To You can also screen manually at any time by right-clicking an entity. 1. Go to the Employees List and right-click an employee s name to access Roles. If you want the system to display the results after screening, check the box Always confirm screening results. Set the Minimum Threshold Acceptance to configure how accurate the system will perform the screenings. If set to Exact Match then the system will only find those entities with exact spelling match. This will not find an entity spelled one way in your Magaya system but a different spelling in the government list. For example, if a company spells its name Cargo de Miami, but you enter Cargo of Miami, the system will not match this name. To enable it to search for similar names and avoid missing an entity due to misspelling or spelling variation, set the threshold to Fair Match. This will result in a larger results list that you can check. Set Days to validate since last check by selecting a number from the dropdown. This is the number of days the screening will be considered good, i.e., valid. This setting depends on how often your company exports. Since the screening service is charged per entity, determine how often you need the screening performed. If you select 30 days, and you add a new entity to your system, that entity will be screened but others will not. You will only be charged for new entities during this time period. 3. Select banned countries: This setting varies, depending on the country in which your company is based. In the United States, the U.S. Department of the Treasury s Office of Foreign Assets Control (OFAC) determines which countries are banned. When you add countries to this setting, your system scans shipments to verify if any entities are in these banned countries. Your Magaya system will scan this list first when you tell the system to screen entities or screen a shipment. It will notify you if it finds one of these countries and display that notification in a dialog box. 4. Save the configuration. Assign Roles to Users Assign roles to the users who will configure the plug-in (besides the Administrator), to enable a user to change the status of a party, and for a user to screen entities, vessels, and shipments. previous The Roles assigned to the employee are displayed. The roles that pertain to Denied Party Screening include Compliance Officer and Run Screening Process. 2. Click the Add button. In the dialog box, select the type of role to assign to this employee. Click OK to save the role. Note: In the future, you can disable a role by clicking Deny in this box or delete the role from the list. Screen Entities and Vessels in Lists If you run the screening process and it was already done during the time period configured, the system will notify you that the entities do not require validation at this time, and no fee will be charged.

4 the page 4 How To Entities can be screened from any list such as Carriers, Forwarding Agents, Warehouse Providers, Customers, Vendors, etc. Right-click on an individual entity name, and select the option you want from the pop-up menu. To screen multiple entities, select them and right-click to access the pop-up menu. If you configured your system to screen entities when they are created or edited and you add a new entity, then the system will screen them against your banned countries list and the Denied Parties List. This screening is counted toward your total number of screenings per month. If a vessel is blocked, the system will notify you with the results screen. Review the list and either remove the vessel or clear it. All activity is logged in your Magaya system and available to view from the Options menu at the top of your Magaya Explorer. Screen Entities in a Shipment In a Shipment, select Actions > Denied Party Screening. If an entity is blocked, the system will notify you with the results screen. Review the list and either remove the entity or clear it. All activity is logged in your Magaya system and available to view from the Options menu at the top of your Magaya Explorer. To screen vessels, go to the Carriers list > Actions > Vessel List. Right-click a vessel to access the pop-up menu and select the option you want. (Selecting Process or Manual Check will screen the vessel.) To screen more than one vessel, select multiple vessels and then right-click. This will enable the option to process the screening only, not the other options on the menu. This screening is counted toward your total number of screenings per month. To see when it was last screened, select the screening history option. This displays the history for the selected vessel only. previous The options enable screening the entities in the shipment ( Process ) or viewing the screening history.

5 the page 5 How To During the verification, the system checks the shipment for the banned countries selected in your Configuration and for possible matches in the US government denied parties list. Note: If you run the screening process and it was already done during the time period configured, the system will notify you that the entities do not require validation at this time, and no fee will be charged. The results screen displays if suspicious entities have been found. (It also displays if your system is configured to always display the results screen regardless of what is found.) (Only users with rights of Compliance Offer role can clear a blocked entity by changing the status of the entity.) A reason for the status change is required. If no match is correct, set the status as Undetermined or Clear by selecting from the Status dropdown menu. When done, click the OK button on the bottom of the dialog box. If you click Cancel the screening is incomplete and will need to be done again to proceed. Blocked Shipments: If a shipment is marked as Blocked as a result of the screening process, the EEI cannot be sent to the AES. The system will notify you of this. Only a user with permission can go to the screening history list and clear the shipment status. To send the EEI, the shipment must be modified by removing the blocked entities and performing the screening process again. The other option requires a user with Compliance Officer role permission to change the status of the shipment and specify the reason in the Screening Results dialog box. Transaction Log of Screenings The system displays all the transactions from the Options menu on the top menu of your Magaya Explorer. The results screen has an option to display only suspicious entities. If this is unchecked, then all screened entities will appear. Use the arrow/next buttons to scroll through the entities listed. If an entity has more than one match, it will be marked with a status of Blocked. The list on the right displays any matches found for that entity. If more than one match displays, select the correct one and click the OK button next to the status field to clear it. Every time entities are screened, the results are logged in this list. previous

6 the New Customers Welcome to the 23 new customers who joined the Magaya Network in July 2014: (Roll your mouse over the names to see their location in the map) 1. Adcom Worldwide (Miami), Doral, FL 22.We Ship Art, Medley, FL 2. AGS Cargo LTDA, São Paulo, Brazil 23.WTI World Transportes Internacionais, LTDA, 3. AGS Cargo USA INC, Miami, FL 4. AGS Gruppo Italia SRL, Lonate Possolo, Italy 5. Asian Logistics Agencies, Marghera, Italy São Paulo, Brazil Be sure to join us on our LinkedIn Group: In the United States The Magaya Network Community! Click here to join now! 6. Bahamas Ferries, Nassau, The Bahamas 7. Dynamic Warehouse, Gardena, CA 8. Eagle Van Lines - JFK, Jamaica, NY 9. Fast Flow Inc., Miami 10. ITN of Miami, Inc. (POS), Port of Spain, Trinidad and Tobago 11. Jet Box International, Miami, FL 12. Jet Box International Limited, Port of Spain, Trinidad and Tobago In Central America Dynamic Warehouse, Gardena & In China the Caribbean U.S. Logistics Group, LLC, City of In Mexico In South America Industry In the Caribbean In New York 13. Jinny Corporation, New York Eagle Van Lines - JFK, Jamaica 14. Kintetsu World Express (USA) Inc. (KWE), Jinny Corporation Miami, FL 15. Line Cargo USA Corp., Doral, FL 16. Nittomax, Doral, FL 17. Representaciones C.A.H.E., C.A., Maracaibo, Venezuela 18. Servicio Internacional de Carga (SICarga), Colon, Panama 19. TPL Provider Assessoria em Comercio Exterior, São Paulo, Brazil 20. U.S. Logistics Group, LLC, City of Industry, CA 21. US Nisshin Shokai Inc., Dakota Dunes, SD In Europe In Texas In South Dakota AGS Gruppo Italia SRL, Lonate Possolo, Italy US Nisshin Shokai Inc., Dakota Bahamas Ferries, Nassau, Dunes Shanghai Sunivo Supply Agencies, Asian Logistics The Bahamas Chain Management In Florida AGS Cargo LTDA, São Marghera,Co., ItalyLtd., ITN of Miami, Inc. (POS), Shanghai, China Adcom Worldwide Doral Paulo,(Miami), Brazil LightSpeed Shipping, Posey Intl.Spain, Mexico, Mexico Port of Trinidad and Nassau, TheMiami Bahamas Representaciones C.A.H.E., AGS Cargo USA Inc., City,Tobago Mexico C.A., Maracaibo, Venezuela Fast Flow Inc., Miami X-press It, Eleuthera, Jet Box International TPL Provider Assessoria em Jet Box International, Miami Governor's Harbor, The Limited, Port of Spain, Trinidad Comercio Exterior, Kintetsu Bahamas World Express (USA) Inc. LTDA., São and Tobago Paulo, Brazil (KWE), Miami Internacional de Servicio WTI World Transportes Line Cargo(SICarga), USA Corp., Doral Carga Colon, Internacionais, LTDA, São Nittomax, PanamaDoral Paulo, Brazil We Ship Art, Medley

7 CASE STUDY: Distribution By Air Freight Forwarder Logistics Services Impacting Manufacturing and the Total Supply Chain There s a lot of talk about how logistics affects the total manufacturing process and costs. The Houston station of Distribution By Air is making the advantage real for their customers on site every day., By having the crating information at the manufacturing stage, we can find transportation options for the customer via various modes., Gerald Lopez, owner of the Distribution By Air Houston station

8 Distribution By Air Challenges At a Glance Distibution By Air Industry Freight Forwarder Solution Magaya Cargo System While Distribution By Air (the DBA-Houston station) are experts in packing and crating, their work doesn t stop there. Station owner Gerald Lopez said, Our customers utilize us in many different ways beyond packing and storage of items. Mr. Lopez knows in advance what will need to be packed, which gives him advanced notice of what needs to be shipped. By having this information at this manufacturing stage, we can find transportation options for our customers in advance, helping them make better decisions earlier. The impact of logistics on total manufacturing costs is a regular topic in trade journals and industry news. But at DBA-Houston, it s more than just a headline; it s a daily practice and a business advantage they have made work for them. Mr. Lopez and his staff help their customers by providing in-house services, working with the Radiant Group, and by using the latest technology. Working On Site as an Integrated Part of the Customer s Team The DBA Houston station is part of the Radiant Logistics group, a large network comprised of different brands, including the DBA brand. Mr. Lopez owns and operates the Houston station of DBA. His general manager is J.D. Enriquez. DBA has their own office, but their specialty is the ability to integrate his team on site at a customer s manufacturing facility. Distribution By Air (the DBA-Houston station) provides specialized export packing and crating for their customers, many who have included DBA-Houston staff on site inside their own location to get faster service and better integration on processes. The result is better visibility and proactive decision making about transportation needs. As a part of Radiant Logistics, Inc. (NYSE MKT: RLGT), the DBA-Houston station has access to competitive rates from a variety of carriers. DBA s customer needs to know the item descriptions, the part numbers and serial numbers in each crate. We give the customer visibility of what s in storage and what s inside each crate via a packing list we create from the software, Mr. Lopez said. Even after a crate is delivered to another country, we can tell the customer where to find a specific serial number, Mr. Lopez said. If a packing list was damaged during delivery, our customer doesn t need to open all the crates to find that one serial number. They can just ask us, and we look it up in our Magaya system. Logistics Integrated with Manufacturing and the Total Supply Chain When DBA works in house at a customer site, it gives the customer a quicker response time for crating and transportation costs, Mr. Lopez said. As a result, they have a faster turnaround time to sell their products. Since all manufacturers have to bid to sell their products, the logistics and supply chain related services we provide are a contributing factor when they quote what they sell, about 10-15% of their total costs. By having the crating information at the manufacturing stage, we can find transportation options for the customer via various modes so they don t have to find a vendor, Mr. Lopez said. One of his customers has a manufacturing plant with over 500 employees who manufacture different items in different departments. They have 5 buildings of over 100,000 square feet each. As cargo shipments arrive, the DBA on-site project manager, Edna Rodriguez, matches the details with the sales order to confirm accurate receipt. Then she enters the details of the items into the Magaya software system to alert the various departments of what commodities have arrived and how they will be used and by which department. As soon as the items are manufactured, they go to DBA s area. As they re building it, we re crating it, Mr. Lopez said. The team is skilled in building ISPM-approved crates. The International Standards for Phytosanitary Measures (ISPM) are standards for treating the wood used to build crates to ensure no insects or disease can be transported.

9 Distribution By Air This arrangement has also been a contributing factor of DBA-Houston s success, Mr. Lopez said. This keeps us ahead of the game. We can secure more cargo from the customer and ship it for them because we have this advanced information. DBA-Houston has been working with some of their customers for 10 years or longer. Many of the customers are in the oil and gas industry. More and more they express interest in our in-house services and how it can help them, he said. Having the technology helps us present our services to new customers too. The Networking and Technology Advantage Mr. Lopez joined the Radiant Logistics group in 2011 to have a larger network and better buying power. Radiant Logistics includes a network of over 100 company-owned and exclusive agent offices across North America that service a diversified account base of manufacturers, distributors and government agencies. They use a worldwide network of independent carriers and international agents. Mr. Lopez discussed how he implemented the software for his company s needs, entered data, and trained his staff. Like any software system, there s work to enter data into it, but it s user friendly. The Magaya team helped us a lot in the beginning with importing our customer information to the database. DBA now creates Warehouse Receipts, Cargo Releases, packing lists, and booking confirmations for drayage. They customized some documents and give their customers online access via Magaya LiveTrack. For other needs such as connecting with the corporate headquarters, the Magaya system is connected via an API integration. Mr. Lopez said using the Magaya system has cut down on a lot of man hours since we started using it. We re more efficient already, and we haven t even used it full force yet. We want to use bar coding, the EDI and other things. That could save us another 25% of our time because there will be less data entry and more visibility between departments and streamlined operations. The Distribution By Air brand of the Radiant group has offices in other cities in the U.S. and another location in Texas. But Mr. Lopez said his station differentiates itself as the one with the export packing and crating expertise. Because of the specialized services they offer, they needed a software program that could handle their processes. Their customers wanted more visibility in the warehouse to see what s on hand. Prior to using Magaya software, DBA was entering commodity data into spreadsheets. We would send a report of what s on hand as needed. One customer had almost 2,000 line items, Mr. Lopez said. Maintaining that would have required us to hire about a half a dozen people just to keep the spreadsheets updated, Mr. Lopez said. We talked to the corporate headquarters of Radiant about what we needed. Some other members of the Radiant group are also using Magaya software. Magaya software is installed at the Radiant corporate headquarters in Seattle, and DBA accesses it via the Cloud. It has helped us tremendously, Mr. Lopez said. It s a must have in our industry. Mr. Lopez heard about Magaya software by word of mouth within the networks that DBA and Radiant belong to in the industry such as the World Cargo Alliance (WCA), the Air Forwarders Association (AFA) and other industry groups. All rights reserved. Magaya, the Magaya logo and all products are all trademarked unless specifically specified as of a third party. Copyright 2014, Magaya Corporation info@magaya.com magaya.com