Don't let checkpoints become chokepoints
James Aaron Cooke, Senior Editor -- Logistics Management, 3/1/2003
The cries of alarm that arose from the shipping community when the U.S. Customs Service announced its proposed advance notice rules in Washington, D.C., last month could be heard all the way up here in our offices outside of Boston.
Shippers and carriers have good reason to be worried. As now envisioned, the rules would require shippers to provide Customs with details about any truck shipment entering this country at least four hours before goods are loaded on the vehicle. The proposals also would require eight hours' advance notice for courier shipments, 12 hours' notice for other types of airfreight shipments, and 24 hours' notice for rail shipments. Export shipments by any mode would have to give 24 hours' advance notice.
U.S. Customs' concern, of course, is securing our nation's borders from attack in the war against Al Qaeda, and maybe soon against Iraq. But an unintended casualty could be an American economy that is combating recession.
Customs' proposed requirements could crimp well-established business practices that are helping many companies stay afloat in these tough economic times. For starters, most U.S. companies don't have safety stock piled in their warehouses to compensate in the event of a shipping delay. To save money, they have adopted lean inventory practices, keeping as few parts or materials on hand as possible. They depend on frequent, small shipments from their suppliers to keep their plants up and running and their retail stores stocked with goods.
In addition, many U.S. companies have taken advantage of free trade and open borders to set up shop in Canada and Mexico. It's not uncommon, for example, for an automaker to ship parts from the United States into Canada for some refinishing work and then back across the border for assembly, all in a matter of hours.
Although four hours' advance notice for a truck shipment might seem reasonable to someone who is uninitiated in the ways of supply chain management, such a requirement could undermine the cost-efficient operations of many American companies. Even with all the advances in planning software, for instance, many companies cannot calculate their production and supply needs far enough ahead to be able to draw up shipping plans four hours prior to shipment.
Many of these companies already have taken steps to ensure the security of their shipments, and are participating in programs like C-TPAT, the Customs-Trade Partnership Against Terrorism, and FAST, the Free and Secure Trade initiative for truck shipments between the United States and Canada. To participate in these programs, companies have to demonstrate to federal officials that they have strict security measures in place to guard against shipment tampering. Customs has established audit procedures to ensure that participants are in compliance. One wonders, then, why Customs couldn't establish a similar "certified shipper" program that would grant members some flexibility in compliance with the advance-notice rules.
At the moment, Customs seems determined to comply with the Trade Act of 2002 and put these new rules in place by October. It's important for all shippers—even those that will be unaffected by the advance notice rules—to press the federal government and Congress for enough flexibility to ensure that commerce keeps flowing steadily across our borders. The alternative is a border shutdown that will knock flat many U.S. companies in the middle of a recession. And if that happens, Osama bin Laden could succeed in crippling the American economy without launching another terrorist attack.





















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