New 24-hour rule could create shipping headaches
Staff -- Logistics Management, 1/1/2003
Another major piece of the U.S. Customs Service's plan for protecting the United States from terrorist attacks has been put in place. On Dec. 2, the agency implemented the "24-hour advance vessel manifest rule," often referred to simply as "the 24-hour rule."
Together with the Container Security Initiative (CSI), which places U.S. Customs inspectors in foreign ports, the 24-hour rule will allow Customs to evaluate containerized shipments for potential terrorist threats before they are laden on board a ship. Ocean carriers now must file complete manifest details for all shipments with Customs at least 24 hours prior to a vessel's departure from a foreign port. (Ocean consolidators, known as NVOCCs, may file directly with Customs or through an ocean carrier.) Carriers may not load containers if the required information has not been submitted to Customs within that time limit. The rule applies to shipments that are destined for the United States, will transit or be transshipped through the United States, or will remain on board a vessel as it loads and discharges in U.S. ports. Carriers have until Feb. 1 to comply.
Although there is widespread support for the purpose of the initiative, international traders are concerned about the difficulty of complying with its requirements. Until now, carriers could file inbound manifests with Customs as late as 48 hours prior to a ship's arrival at the first U.S. port—on some trade lanes, that was up to two weeks after a vessel leaves port, notes John Urban, president of international trade software provider GT Nexus.
The new deadline will force carriers to move up their cutoff times at receiving terminals worldwide. Ships' manifests, moreover, now must include information that had not been required by carriers in the past, such as the commodity's six-digit Harmonized Tariff System (HTS) code. Importers say that level of detail may not available so early, and worry that shipments could be delayed as a result.
Importers also are concerned about confidentiality, since the product-specific HTS code will now be visible to parties that have not had access to that information in the past, says Beth Peterson, vice president of product development at Qiva, a provider of international trade-management software.
Shippers that are using trade-management software are likely to have an easier time complying with the new regulations, since they already are electronically collecting and transmitting data for compliance purposes as well as creating audit trails of their compliance efforts, Peterson says. Many vendors have already modified existing software or have released new applications that are designed to help shippers, carriers and NVOCCs meet the new requirements. Still, the standard electronic messages used in international trade will need to be modified to accommodate additional data required under the 24-hour rule, she points out. In addition, differences between the data filed by customs brokers through U.S. Customs' Automated Broker Interface (ABI) system and the agency's Automated Manifest System (AMS), which ocean carriers use, create the potential for discrepancies and further delays, she says.
The rules are complex and many details remain to be ironed out. The bottom line for shippers: Although carriers are responsible for filing information with U.S. Customs and getting the go-ahead to load containers on board, it remains the shipper's responsibility to provide accurate and timely information in accordance with the terms and conditions of every ocean bill of lading.
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