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Senate bill would penalize imports delayed on docks

By James Cooke -- Logistics Management, 10/1/2004

Ignoring shippers' concerns, the Senate last month passed a maritime security bill that would penalize imports that don't move off the docks quickly. S.2279, backed by Sen. Ernest Hollings (D-S.C.) and Sen. John McCain (R-Ariz.), would require shipments that do not clear Customs within seven calendar days to be removed to public stores or a General Order warehouse for inspection. General Order warehouses are bonded facilities where unclaimed or disputed shipments are held while awaiting clearance. The proposed law also would impose a $5,000 penalty for "each bill of lading" connected with uncleared cargo.

Other key provisions include a requirement that awards of grant money under port security programs reflect national security priorities. The bill also would direct the U.S. Maritime Administration and the Federal Law Enforcement Training Center to educate federal and state officials about maritime and intermodal transportation to help them carry out their security responsibilities.

Trade groups strongly oppose the bill on several counts. For one thing, it does not include exceptions for delays resulting from inclement weather, labor disputes, port congestion, and similar situations. Opponents also note that General Order warehouses usually are located in urban areas, so moving presumably dangerous containers through city streets would actually increase risk. The bill would assess fines against bills of lading, but does not specify who would be responsible for paying those penalties, they say. Finally, opponents believe the bill's authors are placing the blame on the wrong parties. "[The bill] presumes that the importers are not doing what they need to do get the containers off the pier," says Joan Padduck, president of the Coalition for New England Companies for Trade (CONECT).

That presumption is wrong, says Peter Gatti, executive vice president of the National Industrial Transportation League (NITL). "In most instances, the importer has no control over the time period in which Customs clears the cargo," he says. "This is a typical example of the members (of Congress) trying to outdo each other on security, and they wind up crippling the system they are trying to protect."

But Senate Commerce, Science and Transportation Committee staffer Dabney Hegg says the penalty for uncleared cargo will be discretionary and would be applied only if cargo remains on dock for an "excessive" period of time without being claimed.

Because so little time remains in the current session of Congress and no companion bill has been filed in the House of Representatives, prospects for passage appear doubtful. "With no companion bill in the House," says Gatti, "it's unlikely that this will be passed into law this year."

Meanwhile, attempts to attach other maritime security amendments to the Senate Intelligence Reform Bill (S.2845) failed on procedural grounds, reports Washington trade lawyer Peter Friedmann. One amendment, proposed by Sen. Frank Lautenberg (D-N.J.), echoes the Hollings plan to move uncleared containers off the docks after seven days.

The other, written by Sen. Charles Schumer (D-N.Y.), required that 10 percent of all inbound containers be manually inspected by the Department of Homeland Security. That equates to more than 900,000 containers annually—about a 9,000 percent increase in the manual inspection rate, says Friedmann.

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