OTTAWA, Ont. Shipping Canadian exports to the U.S. is going to get a whole lot more difficult thanks to the new prenotification regulations, says CTA CEO David Bradley. Bradley made the remark in response to the latest announcement from the US Department of Homeland Security (DHS) introducing final rules for mandatory electronic pre-notification of manifest data for all cargo shipments to the U.S.
While the regulations have yet to be published in the Federal Register, U.S. Secretary of Homeland Security, Tom Ridge, last week revealed the content of the new rules sent to the U.S Congress for approval.
According to Bradley, "the goals of the new measures improved security and trade facilitation through the elimination of paper-based customs procedures and automated pre-screening and risk assessment — are laudable."
But the trucking industry is very concerned over the cost of the measures, the ability of government to effectively manage the new system, the impact on time-sensitive shipments, and delays at the border that will result at least in the initial stages through a complex system of processing information from over 36,500 trucks daily, said Bradley.
One of the hardest hit will be less-than-truckload carriers, who will have to provide individual prior notice data on each and every shipment on the truck.
“It’s a bit like trying to squeeze an elephant through the eye of a needle," he said.
The new rules "will be tantamount to economic re-regulation of the cross-border trucking industry,” said Bradley.
“The cumulative cost of the myriad of U.S. domestic security measures is staggering and will drive smaller carriers or carriers that are not in a financially stable situation out of the transborder marketplace."
Not only are there concerns over costs, he said, but also very real concern over what impact these pre-notification rules will have on just-in-time shipments and whether the government systems can actually manage the process.
According to Bradley, the new rules "are better than earlier drafts, but still add to the increasing complexity and cost of crossing the border.
"The earlier versions of the rules would definitely have ground just-in-time shipments to a halt. The new rules may not halt J-I-T shipments, but they could disrupt them and the potential is there for mass confusion at the busiest border crossings at least in the short-term. What normally would take years to plan and implement is now occurring in a matter of months."
Moreover, different U.S. government agencies are "bumping into each other trying to implement overlapping programs,” said Bradley. Notably, the U.S. Food and Drug Administration recently announced its own electronic pre-notification rules, which come into force Dec. 12 with different time periods and systems than the Homeland Security rules.
"We have already heard from some of the major border crossings that they are concerned the FDA rules are going to create havoc and long lines of trucks trying to deliver food products to the U.S."
In a regulatory impact assessment, DHS admitted U.S. carriers would face initial costs to purchase and implement the systems necessary for electronic data interchange. However, the department argued will be offset by the time savings gained by faster clearance across the border.
It is estimated there are 22,000 trucking companies delivering inbound shipments to the U.S., with most activity (97.2 per cent) at the Canada-U.S. border. DHS claims 60 per cent of shipments to the U.S. by truck arrive with manually presented hard copy information.
That might be true in the future, but faster clearance will require more than just electronic prenotification, said Bradley.
"It will require investment in border infrastructure, proper staffing levels, more shipper involvement in programs like FAST and cooperation on all the other security-related measures in the pipeline,” he said.
The timelines for the DHS rules for trucks are: (1) Free and Secure Trade (FAST) shipments: 30 minutes prior to arrival at the border; (2) Non-FAST shipments: one hour prior to arrival at the border. (Outbound shipments from the U.S. to Canada are for the most part exempt.)
Manifest information that will need to be transmitted to the U.S. Customs & Border Protection agency includes: conveyance/equipment number; carrier identification number; trip/freight bill/pro bill number; container/seal number; foreign origin location; scheduled date and time of arrival at first U.S. port of entry; numbers and quantities of cargo as contained in bills of lading; weight of the cargo; precise description of the cargo; internationally recognized hazardous material code; complete shipper and consignee name/address/identification number.
Not all ports will be ready to implement the rules at the same time. Once a port is ready and official notice given, truckers will have 90 days to comply.
Follow this link to Customs site where the final rules are available: http://www.customs.gov/xp/cgov/import/communications_to_industry/advance_info/
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