As you know, in the wake of the September 11 terror attacks, the strengthening of homeland security has become a high priority for U.S. Congress (Congress), the U.S. Coast Guard (Coast Guard) and U.S. Customs (Customs). Each of these bodies is exploring and/or implementing practices to improve port and cargo security, giving emphasis to containerized, waterborne cargo. The objective of these efforts, of course, is to prevent the smuggling of terror weapons or weapons components inside containerized ocean cargo shipments.
To help foster better understanding of the initiatives which are in various stages of deployment, and how they could effect the timeliness of import and export shipping operations, the following brief reports covering several prominent initiatives, maybe of interest:
Customs and other Federal Government Agencies have begun to utilize import and export transaction information to support more stringent security measures. Full-order documentation, which is normally attached to inbound and outbound cargo, has proven to be highly relevant to the expanded cargo security reviews these agencies are exercising.
Import cargo, transported in-bond to U.S. cities or locations beyond the port-of-arrival for Customs entry, is experiencing added scrutiny. Historically, Customs has treated such un-cleared cargo, moving inside the U.S. under bond, as a significantly higher risk. Customs has proposed even broader accountability, which would require shippers to provide the same information for in-bond shipments as that mandated for follow-up entry summaries (Cf-7501). Carriers as well as import shippers are vigorously protesting this proposed change, maintaining that the added requirement would strangle cargo movement at ports-of-arrival and wreak havoc on just-in-time manufacturing processes. Some modifications to this proposal are expected. However, shippers and consignees/receivers would be well-served to be prepared for an increase in information requirements submitted for in-bond movements, making appropriate supply chains adjustments as well.
The U.S. Department of Transportation (DOT) is planning to impose a new regulation for (import and export) ocean shipments, which may be similar to the new air cargo rule concerning the status of unknown shippers. The air rule (known as FAA Emergency Amendment No. EA 109-01-01A) was deployed by the Federal Aviation Administration (FAA) on October 8, 2001. One of the expected, comparable stipulations for ocean freight would involve the verification of all cargo delivered to a carrier. In essence, to verify the business legitimacy of the shipper, a site visit by the companys freight forwarder would be required. This physical visit to the shippers plant or headquarters would entail the completion (by the shipper) of a DOT-mandated verification form prior to the date when a carrier receives the shipment.
Customs and the Coast Guard are expected to require and expanded level of shipping information detail from foreign and domestic shippers and carriers. Additionally, this order for broader information would occur at a point in the logistics process prior to shipment loading onto a vessel (for export) or shipment release (for import).
The Coast Guard now requires that vessel operators provide crew manifests and hazardous cargo information at least four (4) days in advance of vessel arrival. This four-day requirement may be extended to include all non-hazardous cargo as well.
Customs may require more detailed individual shipment information in connection with Less than Container Load (LCL) shipments of export and import cargo, if containerized by a freight consolidator. Presently, ocean containers loaded with multiple individual shipments from diverse shippers to various ultimate consignees, is transported on a Master Bill of Lading issued by the ocean carrier as Freight All Kinds, (FAK).
Bills of lading consigned to order or to order of the shipper will be required to disclose the ultimate U.S. consignee (or the foreign consignee for export shipments).
Seven legislative bills, which include provisions for port and cargo security, are currently moving through committees in the U.S. Senate and House of Representatives. The most far-reaching of these bills is Senate Bill S.1214 (a.k.a. the Hollings-Graham bill), sponsored by Senator Ernest Hollings. This piece of legislation, if enacted, would establish port and cargo security committees comprised of all parties involved in the movement of ocean cargo (including vessel operators, freight forwarders, import customs brokers, port labor and management). Each geographically based committee would be tasked with the same mission: to recommend and execute physical security for their homeport. Section number 16 of this bill has emerged as controversial, with its provision calling for a required Full entry summary information for in-bond cargo prior to departure from the original port of unlading. Most of these port and cargo security bills legislation fall into one of three primary categories:
Port facilities, (fences, entrance and egress, etc.);
Port and vessel personnel (background checks); and
Content of containerized cargo.
BDPs Regulatory Compliance Unit and legal counsel are tracking and interpreting the progress of these and other expanded homeland security initiatives. As they progress BDP will do everything in its power to mitigate any potential impact to our customers and trade partners. If you have questions, please contact BDP Regulatory Compliance, mford@bdpnet.com or 215-629-8924.
