10 + 2: It's still coming

We didn’t mention it in this month’s News Alert, but that doesn’t mean it still isn’t something that every importer should be thinking about and developing a checklist to manage.

The formal name is the Importer Security Filing, or ISF for short. It will require that importers (or their designated agents), file ten data elements with Customs 24 hours prior to loading cargo at a foreign port. These data elements are:

• Manufacturer name and address (if unknown, CBP will accept the supplier’s name and address)
• Seller name and address (for “no sale” transactions, CBP will accept the owner’s name and address)
• Container stuffing location (an address is required)
• Consolidator name and address (name of the company responsible for coordinating or packing the container)
• Buyer name and address (for "no sale" transactions, CBP will accept the owner's name and address)
• Ship to name and address
• Importer of record number
• Consignee number
• Commodity’s 6-digit HTS number (per the CBP Web site, CBP will accept the 10-digit HTS code)
• Country of origin

What does this mean for importers? It means that if you are a company who does not get your documents until you pay for them, or the supplier is slow in issuing them, or you’re working through a trading company who shrouds the actual identity of the factory, you are going to have to engage suppliers now in a discussion of providing you this information.

Customs has released the data sets to the trade to begin programming, but they are in draft form only since the final rule has yet to be published. At a recent meeting of COAC (the Commercial Operations Advisory Committee), CBP indicated that they are still targeting a late summer, early fall release of the final rule. It must first clear the Department of Homeland Security’s general counsel and then it moves to the Office of Management and Budget for final approval and publishing in the federal register.

A host of suggestions have been made by the trade over the past several months, from delaying the program, to testing it first with a pilot program, to a recent suggest that there be an online profile that importers can create and CBP can use for screening when data doesn’t change greatly from shipment to shipment. Because the rule is being reviewed, CBP is prohibited from making any comments about it, either public or private.

What is for certain, though, is that companies should start laying the groundwork to obtain this information. CBP envisions a period of informed compliance while people work through the processes and then enforced compliance. Penalties for non-submission can reach as high as the domestic value of the merchandise. Have a plan, start now.

California State Senate Approves $30/TEU fee

An infrastructure and environmental mitigation bill has passed the California Senate and awaits the signature of Governor Schwarzenegger. The $30/TEU fee would apply on containers moving through Los Angeles, Long Beach and Oakland. A similar bill, authored by Sen. Alan Lowenthal, was presented in 2006 and the governor rejected it and suggested several amendments. Over 150 amendments were made to this new iteration and it is expected to be signed into law.

The fees would be charged to the beneficial cargo owners and are eted to generate about $400 million/year in revenue which would be split evenly among intermodal rail projects and environmental mitigation for trade projects. Unsurprisingly, trade associations are opposed for a variety of reasons. Some claim that the issue should be addressed by the federal government and the state doesn’t have the necessary authority. Others claim that it will lead to cargo diversions to other ports because LA/LGB is becoming “too expensive.”

With regards to “too expensive” allegation, the fact of the matter is that there is no other port complex in the United States which has the capacity to handle the volumes that LA/LGB processes. The nation’s largest traders have set up shop in the area and their distribution warehouses are geared to handle cargo which arrives at this port complex. Further, until the Panama Canal widening is completed (which is years down the line) which will accommodate post-Panamax container ships, these ports have a stranglehold on traffic.

This would be just another in a laundry list of fees which shippers would have to pay to do business in Southern California. Already in place is the traffic mitigation fee (Pier Pass) and the Clean Trucks Program will start this fall (pending a court challenge by the American Trucking Association). The Alameda Corridor Charge (ACC) is assessed on containers which move out of the LA basin by rail.

Shippers on the Asia – USWC trade lane, though, have become accustomed to the concept of “all-in” rates. On other lanes, such as Europe to North America, the charges by both the carriers as well as the warehouses which handle the deconsolidation of the cargo, read like a grocery list as long as your arm. There’s a fee for everything, even to recover the additional fuel costs for the propane that forklifts in the warehouse consume.

Typhoon closes Hong Kong

I was advised this evening by Robert Lee of our partners in Hong Kong, Link Force Cargo Ltd., that their offices and much of Hong Kong are closed today due to a typhoon.

It would appear that they're catching the brunt of a Tropical Cyclone and are closed for business today (Wednesday) locally. So please accept our apologies, but it appears that we will have a one day delay in getting information from them.