Deja Vu All Over Again At CBP With New Customs Requirements For Container Residues
October 1, 2009
It seems like we have been through all this before. The US Customs and Border Protection Agency (CBP) comes out with proposed new rules or programs, doesn't consult meaningfully with industry, forges ...
It seems like we have been through all this before. The US Customs and Border Protection Agency (CBP) comes out with proposed new rules or programs, doesn’t consult meaningfully with industry, forges ahead regardless, rushes implementation, gets industry in a lather and then at the very last minute pulls back for long overdue sober-second thought.
Anybody remember the rush to get FAST cards, ACE implementation, or DTOPS?
On July 17 2009, CBP published a ruling modification requiring all empty tanker trucks, ISO 20-foot tanks, rail tanks and large bulk carriers to provide a manifest and file a Customs entry for all cargo residue entering the US starting Sept. 16.
Prior to this change, cargo residue was treated as part of the Instrument of International Traffic, exempting it from manifest and entry requirements. Now, the little bit of residue left in a tank truck after unloading will have to be measured, valued and treated like a good for CBP purposes.
The original notice proposing the rule change was issued in August 2008.
At the time, CTA and other groups objected strenuously.
However, CBP categorically rejected everyone’s concerns, once again leaving cross-border carriers and shippers to struggle to implement costly operational and policy changes in response to new CBP rules that many feel are over-the-top and unrealistic and which have not been subject to a meaningful consultative process.
CBP claims the rule is needed to protect the health and safety of CBP officers, arguing that officers have a right to know if they are in close proximity to a partially empty container that may contain substances that may pose a risk. That’s fair enough.
CTA does not dispute the importance of that objective. However, the ruling extends beyond chemicals and hazardous materials to include all bulk commodities, such as wood chips or milk, which pose little or no health and safety risk.
Moreover, under current practice, a manifest indicates the presence of residue.
An alternative but more effective approach could be to require a description of the residue on the manifest. This would allow CBP officers to reasonably assess product safety while acknowledging that the product is in residual quantities.
This is a more realistic and operationally feasible solution than having to somehow measure all residues and classifying them for Customs entry.
The challenge of measuring a quantity of cargo residue can be enormous and costly.
Many companies simply don’t have the capability. In the case of liquids, viscosity is a factor in accurate measure.
Adjustments to quantities will be required in nearly every instance, negating the purpose of providing a quantity to CBP in the first place.
If the quantity is residual, it is minimal by definition. Does CBP expect drivers, shippers or receivers to stick their heads into a tank to try and measure residual quantity? What about their health and safety? How will CBP check if the quantity is accurate?
Furthermore, in the absence of a formal transaction, it is unclear who the owner of the residue is. How will CBP determine ownership? Who will they sanction in the case of errors? If an entry is required, there will be Customs broker charges associated with the preparation, submission and post-import adjustment of an entry.
And, what about border crossing times? Since residue is currently treated as part of the Instrument of International Traffic, carriers are not required to wait for a Customs entry. Under the new requirements carriers will be subject to additional delays where currently there are none as they wait for the Customs broker to file the entry.
CBP contends the ruling will not adversely impact FAST shipments.
Currently if a carrier is a member of C-TPAT/FAST, the carrier hauling residue is able to take advantage of FAST lane privileges regardless of the importer’s status in the low-risk programs since there is no current requirement for a Customs entry. Once the ruling takes effect and an entry is required for the residue, the importer will have to be C-TPAT certified for the carrier to be able to use the FAST lane.
These otherwise empty trailers will be forced into regular traffic lanes. One mid-size CTA carrier with 35 cross-border residue trips a week estimates the cost of manifesting and subsequently waiting for a Customs broker to file an entry will exceed $150,000 per year. Washing each tanker prior to entering the US is not viable.
There is significant additional overhead associated with the cost of cleaning agents, administration, and the purchase and/or rental of additional trailers that will be needed to ensure customer service needs are met. All of this is also likely to require extra miles and will impinge upon drivers’ hours-of-service.
Then on Aug. 25 -about three weeks from the Sept. 16 launch date -CBP announced that while not withdrawing the new requirements, a decision had been made to postpone enforcement of the new rule for a minimum of 60 days to provide an opportunity for CBP and industry to assess the impact to trade and address the many questions that remain.
Better late than never, I suppose. And, we are certainly pleased that CBP appears to now be listening. But it follows a disturbing pattern and unnecessarily puts the industry through periods of panic when meaningful consultation from the get-go could have perhaps avoided all the disruption. We have between now and November to try and get things on the right track. •
-David Bradley is president of the Ontario Trucking Association and chief executive officer of the Canadian Trucking Alliance.
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