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“10+2” filings late 70%
of time
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U.S. importers and their
agents are required to electronically file detailed data about cargo
shipments 24 hours prior to vessel loading in a foreign port, but less than
one-third of the documents submitted so far meet the deadline, according to
the official in charge of the government security program.
The news indicates that companies are still
experiencing growing pains as they try to comply with the “10+2” rule that
went into effect on Jan. 26.
The Importer Security Filing (ISF) requires 10 types of data
identifying where a container originated, the cargo contents, the
consolidator and buyer, plus two data fields provided by the ocean carrier
(the vessel stow plan and container status messages normally issued to
customers). The information is automatically analyzed by computers to
identify high-risk shipments that should receive X-ray inspections. U.S.
Customs and Border Protection is not enforcing the rule during the first
year to allow industry to develop the software and systems for gathering
and filing the data with minimal disruption to daily operations.
The agency has received more than 350,000 ISFs as
of April 1 from 31,443 importers, customs brokers and freight forwarders,
but only 30 percent of those arrived on time, said Richard DiNucci,
director of the Secure Freight Initiative, at the Customs-Trade Partnership
Against Terrorism’s annual conference in New Orleans last week.
The top five “10+2” filers by volume are all
C-TPAT Tier 3 importers, but even these elite trusted shippers are having
trouble with the timeliness of their submissions.
Tier 3 companies are ones that CBP has recognized
for exceeding normal supply chain security standards, making them eligible
for the lowest possible cargo examination rates and other trade
facilitation benefits.
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DiNucci
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DiNucci told about 1,000 industry representatives
that the on- time rate for those five companies ranged from 28 percent to
41.4 percent, according to Beth Peterson, president of San Francisco-based
trade consultants BPE Global, who attended the presentation.
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Peterson
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CBP is now receiving about 9,500 to 10,000
filings per day, up from 1,200 per day during the first week of the
program, she reported to AmericanShipper.com.
One statistic still missing from CBP briefings is
the number of filings to date compared to the universe of filings that
should have been submitted if everyone was participating. ISFs are to be
done at the “lowest” bill of lading level being filed through the vessel
Automated Manifest System, meaning the total number of ISFs should equal
the number of house or straight bill of ladings filed since the rule went
into effect.
Although big shippers are believed to have an
advantage in terms of in-country resources to track down necessary
information and information technology, DiNucci said CBP is seeing a
healthy number of small and medium-size enterprises submitting the “10+2”
document, including one filer who only imported one shipment in all of
2008.
CBP has also received hundreds of vessel stow
plans and millions of container status messages, Acting Commissioner Jayson
Ahern said last week during a hearing of the House Appropriations
subcommittee on homeland security.
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Ahern
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The highest number of ISF rejections (10,000) by
CBP are due to duplicate filings, which are caused by an importer filing
without realizing a supply chain partner at origin already did so, or
filing an update in a different system than the original, according to
Peterson’s account of DiNucci’s presentation.
Most other errors are typically data entry
mistakes, such as a filer using an ISF number for a transaction that has
already been used by a different party, or a mistyped commodity tariff
number or importer of record number, DiNucci said.
The “10+2” interim final rule gives importers the
flexibility to provide a range of acceptable responses for certain data
elements that may be difficult to obtain early on from foreign suppliers.
Four pieces of information (manufacturer, ship-to-party, country of origin
and commodity code number) can be updated up to 24 hours before vessel
lading. Two (consolidator’s name and container stuffing location) can be
provided no later than 24 hours prior to vessel arrival at a U.S. port.
So far, importers are eschewing the flexible
arrangements and filing accurately the first time, DiNucci said. Less than
1 percent of the filings have been updated using the extended time windows.
The ship-to-party, manufacturer, stuffing location, and consolidator data
fields, for example, have only been updated in 0.5 percent of the
transactions. Part of the reason for this could be cost, because an
importer that is using a logistics partner to do the filing will have to
pay a service fee for the extra filing work.
Some shippers are still having trouble getting
their ocean carriers to speed up issuance of a bill of lading number that
is required as a cross-check on the ISF form. DiNucci encouraged importers
to contact CBP if problems persist so that the agency can lean on the
carrier to speed up the bill of lading process.
CBP plans to issue the first report cards -- now
being called progress reports -- to filers by the end of the month to let
them know how well they are doing with providing accurate or timely
information, DiNucci said. The agency is leaning towards issuing a batch
report to companies doing the filing themselves, or multiple customers,
every 60 days.
“For this to be a success, ISF filers need progress
reports on a daily basis so they can improve their ISF filing in time to
comply with the mandatory ISF regulations that are less than 10 months
away,” Peterson opined.
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New data elements required for 10+2:
• Manufacturer
(or supplier) name and address
• Seller
(or owner) name and address
• Buyer
(or owner) name and address
• Ship
to name and address
• Container
stuffing location
• Consolidator
name and address
• Importer
of record number or foreign trade zone applicant ID number
• Consignee
number(s)
• Country
of origin
• U.S.
Commodity Harmonized Tariff Schedule number
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Many companies have hesitated to implement “10+2”
until they better understand the process and have systems in place to
support the ISF filing. Early on, some mistakenly held out hope that the
new Obama administration would put the brakes on a program that raises
costs for importers and potentially could delay cargo if shipping data is
unavailable by the filing deadline. CBP has insisted that shippers should start
filing as soon as possible to learn from mistakes since errors are not
being penalized. But the leniency policy will change next year, DiNucci
reminded the audience, and CBP will be less inclined to overlook filing
errors by companies that failed to take advantage of the 12-month grace
period.
“If you come to me on Jan. 25, 2010 and you have
made no attempt to file by then, there’s nothing for us to talk about,”
DiNucci warned.
DiNucci advised importers to:
• Begin the classification process sooner than
for preparation of the customs entry so that the information is available
in time for the ISF.
• Decide who will transmit the ISF and how.
• Know all your supply chain partners.
• Require suppliers to provide “10+2” data sooner
than before.
• Add data fields to existing forms such as the
commercial invoice, purchase order and advance ship notice to capture as
much of the required information through normal business processes.
DiNucci strongly encouraged industry compliance
managers to participate in trade surveys about the ISF and said he is
extremely interested in seeing the results to learn how people are coping
with the implementation so far.
American
Shipper is conducting an ISF benchmark survey through the end of
this week. Give
your input on “10+2” here.
DiNucci also appeared to shut the door on
applying “10+2 to other modes in the future. “We have no intention of
implementing other modes. We are not going into other modes. Our focus is
ocean.”
CBP officials in the past have suggested that
“10+2” eventually could be modified for air and surface freight
transportation once the huge challenge of implementing the rule for the
ocean environment is mastered.
However, the difficulty of obtaining advance
commercial data for ocean shipments could be multiplied in the air cargo
environment where speed is of the essence and shipments are exported in a
matter of hours instead of days.
Another factor is that expanding the regulation
would require new legislation from Congress because the SAFE Port Act only
authorizes “10+2” for ocean shipments. — Eric Kulisch
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