By Clifford F. Lynch
It probably shouldn’t come as a surprise to anyone that the "strawman"
proposals floated by the Bureau of Customs and Border Protection in January were
roundly derided as, well, turkeys. The proposals, aimed at tightening security
over imports and exports, intended to accomplish with truck, rail and air
operations what Customs did with ocean operations a year earlier. Though it
apparently slipped the agency’s memory, the ocean rule was derided at the time
as "difficult" and "draconian." (That rule, which took
effect in December, mandated that importers provide detailed cargo manifests to
the agency 24 hours before the freight was loaded on to ships bound for U.S.
ports, rather than within two days after the ship’s departure as they had in
It follows that when Customs introduced its strawman proposal for the other
modes, the reaction was both swift and harsh, demonstrating how fragile things
made of straw can be. Virtually everyone in the import and export community felt
the requirements were too broad and threatened to disrupt efficient supply
chains. And they didn’t hesitate to say so.
Their reaction was understandable. Ocean freight doesn’t tend to be time
sensitive, but with express air and truck service, for example, minutes count.
So it’s no surprise that strawman proposals calling for 12-hour notice in
advance of most foreign lading and eight hours in advance of express shipments
drew fire. Truckers, for example, pointed out that in the case of just-in-time
operations, parts may not even be ordered four hours in advance of when they’re
needed on the factory floor, let alone 12. Others were quick to lodge complaints
about mandates that would force carriers, brokers, importers and exporters to
learn unfamiliar automated systems.
Customs did listen and modified its proposals somewhat. Nevertheless, many
import and export firms still are not pleased with the new regulations, which
would "require advance information in electronic format on cargo being sent
to and from the United States by land, air or sea." More than 125
statements were filed, many suggesting that Customs had deliberately
underestimated the financial implications in order to keep the impact figure
below the $100 million that would trigger a review by the White House Office of
Management and Budget. FedEx has been a particularly vocal opponent; the company
has publicly stated that its costs alone would be a "significant
portion" of the $100 million. Other objectors include the American Trucking
Association, Wal-Mart, General Motors, the Department of Defense and Japan.
Grocery manufacturers are particularly concerned because the FDA is proposing
similar, but separate, rules.
Still, the flashpoint issue seems to be the requirement that companies submit
the data electronically. New technologies will be necessary to accumulate,
manage and report shipment information, and many of the affected parties are
still struggling with the technology basics.
Homeland Security Secretary Tom Ridge has defended the new rules, saying,
"These security measures…are important to the protection of America and
the American people. Advance cargo information is essential not only to
preventing instruments of terrorism from being shipped into this country, but
also to speed the flow of legitimate cargo across our borders."
Nobody denies the need for security regulations (though I’ve often wondered
whether someone who’s attempting to smuggle weapons and other contraband into
the country would really list them on the shipment manifest). The larger
question is how disruptive the rules will be. That will depend on exactly what
rules finally become law, how much dislocation is needed for compliance and the
stringency of enforcement. Stay tuned.