In January, CTA presented a submission to the then U.S. Customs Service on advance manifest requirements of the U.S. Trade Act of 2002. CTA also participated in the truck working group established by ...
In January, CTA presented a submission to the then U.S. Customs Service on advance manifest requirements of the U.S. Trade Act of 2002. CTA also participated in the truck working group established by the Advisory Committee on Commercial Operations (COAC) to provide advice on implementation of the Trade Act pre-notification requirements and will remain engaged in that process as we move forward towards implementation.
Under recommendations developed by the COAC truck working group, all commodities entering the U.S. – including food – would be subject to either a 15 or 30 minute minimum pre-notification standard, measured from the time Customs Border Protection (CBP) receives cargo data from the broker or carrier.
Now we have a new set of prior notice requirements to contend with. These are contained in the Bioterrorism Act. Under the proposed rules, pre-notification would have to be submitted by noon of the day prior to the import of food products regulated by the U.S. Food and Drug Administration (FDA). Since we first learned of these proposals a few weeks back, CTA has been consulting with member carriers, other trade associations in both Canada and the U.S., and Canadian government officials on how the Bioterrorism Act provisions will affect the cross border movement of food products.
Total food tonnage shipped by truck between Canada and the U.S. is roughly equal to 433,600 truckload weight equivalents (for a truck with a payload of 45,000 lbs and a gross vehicle weight of 80,000 lbs).
Since not all food shipments would travel in truckload, the number of trucks that would arrive at the border requiring prior notice would be significantly higher than the number of truckload equivalents. Shipments of food between Canada and the U.S. in 2002 that would fall under the proposed FDA pre-notification regulations represent approximately 9.8 million tonnes or 13.4 per cent by weight of all Canada – U.S. trade by truck, according to the Bureau of Transportation Statistics.
CTA in no way questions the need for heightened security throughout the supply chain in the post September 11 world. We have supported the introduction of Partners in Protection – the Canadian equivalent of CTPAT – and have been working with government officials from both Canada and the U.S. on the development of security cards for transportation workers operating both domestically and internationally. Nevertheless, the prospect of two sets of prior notice requirements from different agencies of the U.S. federal government is a major concern.
The prior notice requirements set out in FDA’s proposed rule stand in stark contrast to the COAC recommendations. Not only is the time frame substantially different, there is a separate information system, different parties would be called upon to provide the information, and the data elements are not the same.
Consider, for example, the logistical problems confronted by a less-than-truckload (LTL) carrier moving shipments of food and non-food products into the U.S. on the same truck. The pallets containing food products would be subject to potentially 12 hours pre-notice, with data (including the name of the trucking company and when and where it will cross the border) supplied by the U.S. importer. The same food pallets, as well as all other shipments on the truck, would be subject to CBP requirements to be met by either the broker or carrier, supplied through a different information system, and in a different time frame.
While in some respects simpler, a full truckload shipment of food products (i.e., a load moving directly from a Canadian exporter to a U.S. importer) would also be subject to the two sets of requirements – and again, with different parties providing the information, through different systems, with different data elements and in different time frames.
CTA does not take issue with the principle of moving to advance electronic information for border clearance. This is in the trucking industry’s interest.
However, CTA would suggest that instead of developing two processes – one for food and one for everything else – that a single interface be developed, and the various government agencies share information that is relevant for their purposes. This is the principle behind the U.S. International Trade Data System (ITDS), which is currently under development. Until such time as ITDS is operational, CTA would encourage FDA to work closely with CBP to find a way to receive the information it needs from customs’ systems rather than implementing new requirements of its own.
We need to satisfy U.S. legislative requirements, but at the same time provide enough flexibility to not seriously disrupt trade flows and harm business operations on both sides of the border. Several examples are presented below to illustrate this concern.
When a U.S. importer of a fresh fish product, such as salmon, lobster, herring or cod purchases such a commodity, it is often done in a same-day manner. A typical transaction would be as follows: A fish broker is contacted by a fishing vessel as it approaches port.
This contact allows the broker to be aware of the time of arrival and the commodity on-board.
The broker then begins to find same-day U.S. buyers for the commodity, and at the same time dispatches a trucking company to accept the load immediately upon the vessel’s arrival at port.
The trucking company is dispatched to the port unaware of its final destination. Typically the truck is loaded within two hours.
These loads are dispatched in close proximity to the U.S. border and are scheduled to be received the same day.
The movement of live food further illustrates this point. Live crabs have a limited life span in crated water as they secrete ammonia and quickly die.
Consequently, as crabs arrive at Canadian ports they are sorted and graded by size and strength and sold to a seafood broker.
Since crabs only survive 40 hours in a crate and buyers will only accept a crate for purchase with less than a four per cent mortality rate, the crab must be immediately shipped to its final destination or the shipper risks the loss of the entire shipment.
U.S. imports of fresh produce are also moved in a just-in-time manner. For example, mushroom suppliers request that trucking companies allocate on a daily basis a certain number of trailers to store and ship that day’s harvest.
The carrier has knowledge of the number of trucks that will be dispatched to the U.S. on a given day, but knowledge of the ultimate destination is rarely finalized until the trucks are loaded.
Bulk shipments of flour are loaded on Canadian trucks at terminals in close proximity to the border, destined for U.S. bakeries. Production schedules at the U.S. facilities will determine where the truck will end up, and the ultimate destination can literally change en route depending on bakery schedules.
The FDA proposal would curtail the practice of “topping-off” diverse product to only previously identified products. Such a limitation would add significant cost throughout the supply-chain.
It is extremely difficult to assign a dollar amount to such a practice but virtually all LTL shipments crossing the border engage in such a practice.
Security, yes. But, duplication of regulations – that’s costly and hard to stomach.
– David Bradley is president of the Ontario Trucking Association and chief executive officer of the Canadian Trucking Alliance.