Posted by Patrick Connaughton on June 23, 2008
The Bureau of Customs and Border Protection (CBP) published the Importer Security Filing and Additional Carrier Requirements documents in January, a notice of proposed rulemaking better know to the industry as ‘10+2’. Since then, CBP has continued to refine the ruling and gather feedback from the trading community. And the writing is on the wall, this rule will very likely be put into motion later this year. So what does this mean to importers?
In a nutshell, 10+2 is the pending regulation that will require filing for US bound ocean shipments to be electronically sent 24 hours prior to the vessel loading at its origin. This is intended to help allow enough time for Custom’s Automated Targeting System to flag high risk containers for inspection and security screening. The proposed penalty for failure to file the importer security filing is 100% of the value of the imported merchandise.
There are 10 categories of data the CBP wants from the importers and two sets of data from the carriers. The rule is controversial because it will mean most companies will need to adjust and update their processes and systems to handle this. Importers are worried because they are not 100% sure where the data is going to come from. In some cases, its not that the data is not available, it’s that it is intentionally hidden. For example, a reseller may not include the original manufactures’ details because what’s stopping buyers from now going directly to the source? The other wrinkle in this regulation is making importers directly accountable where most of these supply chain processes are typically handled by their carrier, customs brokers and other 3rd parties.
Another big issue is going to be timing. Today, it can take up to 72 hours to obtain this data so potential delays are inevitable at least early on. For many lean supply chains this is going to be a challenge because they do not account for storing freight at intermediate locations. Many are so streamlined that the goods come off the truck directly on to the boat.
The good news? The rule is not coming out for months and importers have time to prepare? My recommendations:
First, read up on the proposed rule found at http://edocket.access.gpo.gov/2008/pdf/E7-25306.pdf.
Then, after you regain consciousness, try to find something that been written that is actually decipherable.
One very well written article can be found at http://www.americanshipper.com/10%2B2/10+2_06-18_AS0308_lrsp.pdf.
Next, figure out where your technology provider stands. In Forrester’s TechRadar: The Extended Supply Chain Application Ecosystem, we called out Global Trade Management (GTM) as being one of the fastest moving categories of SCM software. Why? It’s the ever increasing complexity of import/export and new U.S. Customs and Border Protection (CBP) regulations like 10+2 that continue to make these software solutions an absolute necessity. GTM software vendors like Management Dynamics, GT Nexus and Tradebeam all have solutions in the works but are at varying stages of development. Ask them:
- Can your technology help me pre-classify goods?
- Can you provide a single platform for capturing and filing 10+2 info?
- Can you alert me when shipments exist without the required 10+2 fields?
- Can you auto-populate those fields into an electronic filing when they are available?
This is just a starting point. Feel free to setup an inquiry to learn more and be on the lookout for our upcoming market overview on GTM Software.
Patrick Connaughton, Senior Analyst – Supply Chain
Business Process & Applications