Can the Industry’s Strawman Make It Through U.S Customs?
April 1, 2003
In the year-and-a-half since the horrific events of 9-11, U.S. government officials seeking to prevent a second terrorist attack on their soil have steadfastly maintained that public and economic secu...
In the year-and-a-half since the horrific events of 9-11, U.S. government officials seeking to prevent a second terrorist attack on their soil have steadfastly maintained that public and economic security will be achieved together and one will not be achieved at the expense of the other.
That promise will be put to the test in the next few months and the future of the transborder business that has proved to be the engine of growth for Canadian for-hire carriers over the past decade stands in the balance.
In January, when U.S. Customs introduced strawman proposals that called for automated pre-notification of freight crossing the Canada-U.S. border four hours prior to loading, they were looking for an industry response, and they got it. Consolidated protests from trucking and shippers’ associations on both sides of the border warned that the advanced timing of these new rules threatened North America’s just-in-time delivery systems. The tremendous wave of industry protest, forced U.S. Customs and Border Protection (CBP, formerly U.S. Customs) to remove its strawman proposal and opened the door for key representatives from trucking and other transportation modes to come up with a cargo-security proposal that both government and industry can live with. That was a marked departure from the tight schedule and closed-door decision-making approach employed by CBP up to that point.
As Motortruck was going to press, members of the COAC – the Treasury Advisory Committee on Commercial Operations of U.S. Customs, a group of private sector individuals entrusted with advising CBP on Customs issues – were optimistic that they had achieved just that.
“We have a close relationship with Customs and Commissioner (Robert) Bonner made it clear he wants to work with the trade. We will be taken seriously,” Sandra Scott, Trade Advocate for Roadway Express and head of the subcommittee on truck manifest reporting, told the press.
The COAC is considering an alternative offered by that subcommittee, which included representation from the Canadian Trucking Alliance, that recommends:
Free and Secure Trade (FAST)-approved carriers provide 15 minutes pre-arrival notice (measured from the time information is transmitted to Customs). For non-FAST carriers, the time frame would be 30 minutes. The distinction reflects the fact that FAST carriers have already undergone extensive security screening. This compares to the strawman proposal of electronic notification 4 hours pre-lading.
Existing U.S. reporting exemptions for shipments to Canada be maintained. This compares to the strawman proposal of 24-hour electronic pre-lading notification. This does not impact on Canada Customs and Revenue Agency reporting requirements.
CBP rely on existing systems to satisfy pre-notification requirements and not impose any new systems development costs on industry at this time. The subcommittee was particularly concerned about the adoption of an “interim solution” in advance of the introduction of the Automated Commercial Environment (ACE) beginning in early 2004.
A notable example of CBP’s changed attitude on pre-notification is its recent admission that it’s willing to consider dropping the time frame for submitting advance cargo manifests on ocean imports to less than 24 hours. At the beginning of February CBP had begun enforcing the 24-hour pre-notification rule for ocean carriers despite widespread opposition from that industry. Yet recently Charles Bartoldus, Director of Border Targeting and Analysis, conceded the agency “got off to a very bad start” with the new rules and now that it has a better understanding of carriers’ concerns it is willing to listen and “will make changes.”
Sincere as the olive branch to industry may be, however, it’s unlikely the agency would back down from mandatory pre-notification, especially now when the Bush Administration is involved in Iraq and has already foiled at least two attempts at Iraqi-sponsored terrorist attacks in the U.S.
“We know that pre-notification is coming. What we don’t know is the amount of advanced notice that is going to be required,” says Senior Vice-President Graham Cooper of the Canadian Trucking Alliance.
There also remains a possibility that CBP, considering the enormity of making a mistake in such a situation concerning public safety, will be trying to build in a buffer beyond what it truly needs to safely check inbound cargo.
“Almost by nature, you ask for more than you think you can get. And if something happens you can always fall back on the position of ‘I told you so.’ I really think that plays a part in the equation,” said George Kuhn, Executive Director of the Canadian International Freight Forwarders Association.
And time is also an issue. Both industry leaders and Customs officials are feeling the pressure to meet the October 1 deadline to put rules governing electronic advance cargo-data reporting for exports and imports from all modes into effect. To give the private sector time to comment, CBP will have to publish its proposed rules by early June.
If saner heads do prevail, Jim Phillips, President and CEO of Canadian/American Border Trade Alliance, says a solution for secure cross-border hauls must meet two criteria: low-risk designation and risk-management targeting. Both of these depend on pre-arrival data.
For the trucking industry the aim is to find the latest possible moment a carrier can submit cargo information before arriving at the border to allow Canada/U.S. Customs enough time to target high-risk goods and to give carriers a green light.
“When is very critical in the sense that if you load the truck and you prep your manifest and then place the information at the disposal of whichever authorities require it, that is an acceptable thing to industry. However, if they want four or two hours notice prior to departure, that doesn’t make much sense because very often you only know what’s going to go on the truck once you’ve finished loading,” Kuhn says.
The Canadian Trucking Alliance believes that when pre-notification is resolved, the window need only be as long as the electronic system itself needs to flag questionable shipments, carriers and drivers to pull them out of a line, says Cooper. “That may be a matter of a few minutes. It’s a very sophisticated electronic system the Americans are building, so you don’t need hours of pre-notification to target high-risk freight…in theory.”
Phillips agrees. “In Michigan, electronic pre-notification is already passed to U.S. Customs 15 minutes before reaching the border for the big three automakers.
“What shippers and carriers need to remember is this,” adds Phillips. “To get facilitated treatment, you have to describe exactly what’s in a container. No general remarks like ‘miscellaneous’ or ‘farm equipment.’ Name it and explain it.”
Another development that bears watching, however, is renewed talk on Capitol Hill to inspect all import containers. Such proposals are part of the Democrats’ plan to step up their criticism of the Bush administration’s handling of the war on terrorism as the next election approaches. The Democrats have little chance to pass such legislation without bipartisan support, but that may be gained if the proponents of such a bill can generate enough support to make the Republicans skittish before voters.
“The danger is that there may be some kind of countermove on the part of the Republicans, so the call for increased inspections may gain more currency if they see the Democrats are striking a chord,” says Jon Kent, Capitol Hill Representative for the National Customs Brokers and Forwarders Association of America.
Still, Cooper welcomes the renewed dialogue . “The next formal step,” he says, “will be the publication of another proposal for rule making. We hope to see something that is reasonable for us to follow.”