By Simon Kaye
Manufacturers that source worldwide must coordinate closely with shippers to ensure familiarity with the customs rules and regulations of every country through which freight will pass. Without adequate preparation and planning, information snags, missing or ill-prepared shipping documents, and inappropriate cargo routing, can all lead to customs delays during border crossings, goods being rejected out of hand, or even cargo confiscation. Add heightened national security concerns concerning imported shipments, and customs regulation gets an even more complex regulatory overlay.

“10+2” Rule Requirements

A good example of the difficulties that unprepared manufacturers face is a new enforcement regime of the U.S. Customs and Border Protection agency (CBP), one that stands to increase costs for importing manufacturers. The SAFE Ports Act of 2006 directed CBP to gather data about shipments imported to the U.S. for better evaluation of terrorism and security risks. CBP has developed rules for an Importer Security Filing (ISF) that requires importers to submit additional security-related information on their shipments at least 24 hours before the goods are loaded on board an ocean vessel. This ISF is in addition to the 24-Hour Rule requirement to provide CBP with shipping manifest data in advance of cargo arrival.

The ISF will fundamentally alter both the timeline and manner in which import-related information is provided to CBP. The required filing must be made electronically and include 10 categories of detailed identification regarding the manufacturer, shipper, consolidator and importer, as well as information on the shipping-container stuffing location and various shipment identification numbers. This information must be provided as individual line items, so that shipments which contain merchandise subject to multiple classifications will require multiple ISF submissions. In addition, the carrier must provide CBP with two other items: a cargo stowage plan for the vessel and container status messages. Thus, the ISF requirement is being referred to as the “10+2” rule.

Whoever files the ISF will be responsible for the timeliness and correctness of the transmission, and must make every effort to update the filing if there is any change in the data while the merchandise is in transit to the United States. Although some of the required data elements can be obtained from existing purchase order systems, most companies will be required to coordinate information from several different sources to satisfy the ISF requirements. The interim final ISF rule took effect in January 2009, with full implementation a year or more away. It is already clear, however, that importers must make major changes in how they gather and report information about their shipments.

Electronic Tracking Solution

The information required by new security rules, as well as increasingly complex customs regulations, dovetails perfectly with the electronic tracking capabilities of a sophisticated freight forwarder. Government security and customs agencies are generally in synch with the goals and aims of professional freight-forwarding organizations that know how to improve throughput, navigate problems and deal with the governments and ports. For compliance it is vital to collect data and keep track of all freight in a way that creates a provable and thorough “paper trail” even of electronic tracking data.

Electronic tracking from a reliable freight forwarder meets these needs, and can help reduce the importer’s regulatory cost burden. A comprehensive real-time electronic tracking database lets manufacturers track freight as it moves across the world, and catalog results that can be searched, graphed and made useful.

Electronic tracking eliminates inefficiency from physical keying of routing numbers and freight identification instead of using EDI. In addition to automating and standardizing the data entry function, an effective electronic tracking system will be an intuitive solution that enables users to employ “real-world” search criteria to determine shipment status.

Effective electronic tracking includes such criteria as vendor or consignee identities, country of origin, and destination and most importantly a manufacturer’s own purchase order and bar code numbers.

The system will also:

*Give automatic alerts that key milestones such as loading, sailing, arrival, and delivery have occurred – and also warn about delays.

*Transmit customized emails at times and intervals as requested.

*Provide online and real-time updates on where a shipment is and what it consists of, right down to individual item descriptions, quantities and SKU codes.

*Work with and display both estimated and actual departure and arrival dates.

*Allow and document customer authorization of the original transaction and any subsequent amendments.

*Be password protected and encrypted for security.

The electronic tracking and documentation systems used by sophisticated freight forwarders are the comprehensive solution that enables companies to produce verified information on shipment status to meet all customs and security requirements. At every stage in the supply chain, they provide the visibility and transparency essential to cost-efficient shipping.

Simon Kaye is founder and chief executive office of Jaguar Freight Services with offices in London, New York, Philadelphia, Paris, Brussels and Hong Kong, and an operations network in Europe, North America, South America, Australasia, Asia, Middle East and Africa. He can be reached at 516-239-1900 or simon@jaguarfreight.com, www.jaguarfreight.com.