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| NEWSLETTER | |
| Changes That Might Affect You!!! | April 15th, 2003 |
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“FREEDOM” |
Source: “ Freedom ” http://www.ajmatthews.com/Patriotic44.html
In this issue
General Rate Increase Announcement by TSA
According to a Los Angeles Ocean freight forwarder the GRI will be $525/20FT $700/40FT (a second source varied only slightly with $500/20FT & $700/40FT), and for containers moving inter-modal $720/20FT, $900/40FT and will become effective after 5/01/2003. TSA carriers (Transpacific Stabilization Agreement) hope to achieve this GRI for the new 2003/2004 service contracts. While there is little question that the carrier's revenues suffered from the low rate levels, last year's West Coast labor problems, and the additional cost for implementing the 24- hour rule the GRI is a substantial amount. Ocean Carriers have made no secret of their intention to make use of their service contract authority and their antitrust immunity.
TSA carriers are: APL,CMA CGM, COSCO Container Lines, Evergreen, Hanjin Shipping, Hapag-Loyd, Hyundai Merchant Marine, “K” Line, Mitsui, Maersk Sealand, P&O Nedloyd, NYK Line, OOCL, and Yangming.
There is a possibility that some of the carriers will lower their base rate while going along with the GRI. This will have the net effect of raising the rates of ocean freight less then the proposed GRI amount. Also keep in mind that this GRI has not been implemented and while it is still too early to predict at what level this GRI will be settled one can deduct that it is the American consumer that will pay for the GRI.
Sources:
NCBFAA Membership Approves Establishment of
Standing NVOCC Committee
San Antonio, TX – At its
Annual Conference here, the National Customs Brokers and Forwarders Association
of America, Inc. (NCBFAA) membership voted to establish a standing committee to
address the special concerns and issues faced by Non-Vessel Owning Common
Carriers (NVOCC). The NCBFAA will have the group assembled and working within
the month.
The NCBFAA will draw extensively on
the wealth of knowledge represented by its NVOCC member firms in developing
this new committee’s agenda. However, in the interest of inclusiveness, the
NCBFAA will welcome input from the entire NVOCC community.
Initial areas of concern that the group will address are:
- U.S. Customs 24-hour rule, which has had a significant impact on NVOCCs’ business arrangements.
- Instances of rate discrimination by carriers and their associations.
- The developing situation involving the adverse effects of the Peoples Republic of China’s maritime regulations.
- The question of antitrust immunity for carriers.
- Elimination of tariff filing requirements.
"This is an important step in the NCBFAA’s efforts to establish itself as
the leading voice of the whole transportation logistics community," said
Billy App, NCBFAA Freight Forwarding Committee Chairman. "Many of the
challenges facing these NVOCCs are distinct from those of forwarders and with
this group in place these issues will be fully and fairly addressed using the
full resources of the NCBFAA governing body."
With headquarters in Washington, DC, the NCBFAA (www.ncbfaa.org) represents
nearly 700 member companies - the nation's leading freight forwarders, customs
brokers, ocean transportation intermediaries (OTIs) and air cargo agents.
Established in 1897 in New York, NCBFAA is the strong, effective national voice
of the industry. Through its various committees, counsel and representatives,
the Association maintains a close watch over legislative and regulatory issues
that affect its members. It keeps them informed of these and other related
issues through its weekly Monday Morning eBriefing, Quarterly NCBFAA
Bulletin, and various meetings and conferences throughout the year.
* * * * *
Sources:
Tax Savings for the Exporter!!!
Goods of high value incur a sizable state tax
liability, so it is important to use exemptions of California state taxes for
goods to be exported when ever possible. Goods bought in California for
exportation, are exempt from state sales tax. A Shipper Export Declaration is
required to prove exportation; vendors often charge the state sales tax and
then refund it when the SED is provided to them.
To use this
exemption the goods must be sent directly to, and received by the broker. They
have to be entered into the IAB warehouse (they cannot be shipped directly to
Mexico). This is key, a shipper cannot have the goods sent to their location
and then sent to IAB’s warehouse, the goods MUST be sent directly to
International Automated Brokers and then forwarded to Mexico. If you have any
questions ask your account representative.
http://www.boetaxes.ca.gov/business/vol1/sut/sutl.pdf
See page 1119 (note: the above link
is a pdf page, and is 340 pages long)
Information has been
obtained from sources believed to be reliable. We do not guarantee the
accuracy, adequacy, or completeness of any information and are not responsible
for any errors, omissions, or for the results obtained from the use of such
information.
The Department of Homeland Security
Organization
of the Department of Homeland Security
Terrorists
today can strike at any place, at any time, and with virtually any weapon. This
is a permanent condition and these new threats require our country to design a
new homeland security structure.
The
United States faced an enormous threat during the Cold War. We created a
national security strategy to deter and defeat the organized military forces of
the Soviet bloc. We emerged victorious from this dangerous period in our
history because we organized our national security institutions and prepared
ourselves to meet the threat arrayed against us. The United States is under
attack from a new kind of enemy – one that hopes to employ terror against
innocent civilians to undermine their confidence in our institutions and our
way of life. Once again we must organize and prepare ourselves to meet a new
and dangerous threat.
Careful
study of the current structure – coupled with the experience gained since
September 11 and new information we have learned about our enemies while
fighting a war – has led the President to conclude that our nation needs a more
robust and unified homeland security structure.
Mission of the New Department
The
mission of the Department of Homeland Security would be to:
·
Prevent terrorist attacks within the United States;
- Reduce America’s
vulnerability to terrorism; and
- Minimize the damage and
recover from attacks that do occur.
The Department of Homeland
Security would mobilize and focus the resources of the federal government,
state and local governments, the private sector, and the American people to
accomplish its mission.
Organization
The creation of the Department
of Homeland Security would empower a single Cabinet official whose primary
mission is to protect the American homeland from terrorism. The
Department of Homeland Security would have a clear, efficient organizational
structure with four divisions.
·
Border and Transportation Security
- Emergency
Preparedness and Response
- Chemical,
Biological, Radiological, and Nuclear Countermeasures
- Information
Analysis and Infrastructure Protection
Even after creation of the new
Department, homeland security will still involve the efforts of other Cabinet
departments. The Department of Justice and the FBI, for example, will remain
the lead law enforcement agencies for preventing terrorist attacks. The
Department of Defense will continue to play a crucial support role in the case
of a catastrophic terrorist incident. The Department of Transportation will
continue to be responsible for highway and rail safety, and air traffic
control. The CIA will continue to gather and analyze overseas intelligence.
Homeland security will continue to require interagency coordination, and the
President will still need a close adviser on homeland security related issues.
Accordingly, the President intends a strong continuing role for the White House
Office of Homeland Security and the Homeland Security Council.
Above article is as it appears on http://www.whitehouse.gov/deptofhomeland/sect2.html
For more information click on link below.
http://www.whitehouse.gov/deptofhomeland/
Tid bits about the 24 hour Rule
Below is the question and answer web page that Customs has published.
http://www.customs.gov/xp/cgov/import/carriers/24hour_rule/
This Q & A session is 36 pages long…… so I took the liberty of cutting it down to 3 pages. The information below is taken from the Customs Question and Answer page regarding the 24-hour rule. The 24 hour rule currently only applies to Ocean freight and air Freight, not freight coming to the United States via truck or rail.
Trucked or Railed
into the U.S.
What
constitutes a precise description of cargo?
Entry/Entry Summary
"Do Not Load”
Ports will issue "do not load”
messages to the carriers/NVOCCs for clear violations of the 24-hour rule. Initially, enforcement efforts will focus
only on the cargo description. If the
cargo description is clearly in violation of the 24-hour rule -- a blank
description, “FAK”, “STC” (with or without other description), “consolidated cargo”,
"general merchandise", “26
pallets”, "various retail merchandise", or another similarly vague
description -- ports will issue a "do not load” message on these
shipments. Programming for the “do
not load” message is complete in AMS, that feature will be utilized and all
automated participants will be required to have this programming in place on March 4, 2003. Until March
4, 2003, the "do not load” message will be made to the
carrier's/NVOCCs representative both in AMS and by telephone and/or fax or by
email, if the carrier can provide the port with a single email address to use
as a point-of-contact.
Once the ports have issued the
"do not load” message cargo should not make its originally intended
voyage, unless it meets the 24-hour requirement after the correction of the
information. If cargo is loaded without prior approval by Customs, the
container will be denied permit to unlade at all U.S. ports. If the container that is subject to the
denial to unlade in the U.S. is on a FROB container then a penalty will be
assessed against the carrier.
A) How will it be advantageous to be a
C-TPAT participant under this rule?
Answer: Customs expects that its partners in C-TPAT will provide the required information under this rule as a regular part of their security-related procedures. Accurate and timely cargo declarations are critical to the delivery of the cargo
release benefits that are part of C-TPAT participation. While C-TPAT participants will not be excluded from the advance reporting requirements, their participation in the program will be taken into account during the targeting process.
B) Will C-TPAT participation by a
carrier or a NVOCC be a mitigating factor in determining penalties for
violations of the regulation?
Answer: C-TPAT participation by the carrier
or automated NVOCC will be a mitigating factor for penalties and liquidated
damages.
Trucked or railed across the border
Canada/Mexico
Shipments: Please
clarify whether the final rule applies to cargo shipped from a foreign port to
Canada or Mexico and then trucked or railed across the border to a final U.S.
destination. How will Customs address
the concern that cargo may be diverted from ocean carriers to truck or rail
carriers as a means of circumventing the rule?
Answer: The final rule does not apply to cargo
that is shipped to Canada or Mexico and subsequently trucked or railed into the
U.S., if the vessel does not call on a U.S. port. Customs has targeting personnel stationed at seaports in Canada
and cooperation with Canadian authorities has been excellent. If either Customs administration suspected
that goods were being routed in an attempt to evade scrutiny, those goods would
likely be treated as high risk. For
vessels that are departing Canada or Mexico with cargo destined for the United
States, the 24-hour rule does apply.
Customs
is not mandating that carriers submit cargo declaration information to Customs
prior to receiving the container. That
is a business decision for the carrier to determine. Customs was clarifying that, for Customs purposes, the container
did not have to be physically located at the dock for the carrier to transmit
the cargo declaration to Customs.
What
constitutes a precise description of the cargo?
Answer: The regulation requires a precise narrative description of the cargo or
the 6 digit tariff number for those with the skill to provide it
correctly. If there is doubt about the
accuracy of a 6 digit tariff number, which can sometimes be difficult to
ascertain, a precise narrative description should be used.
A precise narrative description is a
description that is precise enough for Customs to be able to identify the
shapes, physical characteristics, and likely packaging of the manifested cargo
so that Customs can identify any anomalies in the cargo when a container is run
through imaging equipment. The description must also be
precise enough to identify any goods, which may emit radiation. How specific that information must be
depends on the nature of the commodity.
For example, "electronics" is not a precise description, but
"CD players" or "computer monitors" would be.
Customs will continue to work with
the trade to refine what descriptions are acceptable. Customs will not begin its enforcement actions with descriptions
where the required level of precision is not clear. Customs will continue to notify the carriers when these more
difficult commodities are not adequately described. However, cargo descriptions are one of the most important
elements to assist Customs in precise targeting, and it is in the trade’s
interest to become precise and compliant as quickly as possible. Not only will this avoid eventual
enforcement action, but it may also avoid container "do not
load" message and “holds”
due to Customs not being comfortable that it knows what is in the
container.
To be clear, IN NO CASE is a blank description, freight
all kinds (FAK), said to contain (STC) with or without other description,
general merchandise, “26 pallets”, various retail merchandise, consolidated
cargo or other similarly vague descriptions acceptable. On February 2, 2003, Customs began
initiating strong enforcement actions in cases where these kinds of general
descriptions, which have continued during the transition period.
A) A “US Customer”, places an order with “Foreign Vender” located in England. “Foreign Vender” takes the order and advises that they will produce and ship the goods from their “Factory” located in Italy. The “Factory” produces the goods, and advises “Foreign Vender” that they are ready for shipment. “Foreign Vender” prepares shipping instructions and selects a local England NVOCC to move the goods directly from “Factory” in Italy, to Customer in the US. The terms of shipment are under a Line of Credit, between the “Foreign Vender” and “US Customer”.
Who should be shown as the Shipper on the Master Bill of lading if no House bill is involved? If a House Bill is involved, the Master will reflect the “Foreign NVOCC” as shipper to their “US NVOCC” office as the consignee. The House Bill will reflect the actual “US Customer” as consignee. Should “Foreign Vender” or “Factory” be shown as the shipper on the House Bill?
Answer: The shipper
should be, either "Foreign Vender" or the "Factory". Although, Customs would like to have the
most detailed information on the shipper available, for targeting purposes,
Customs will accept either party as the shipper until we can clearly identify
the term shipper to the trade. The
consignee will not be the "US NVOCC" office; it should be the actual
"US Customer".
B) A “US Customer” advises their NVOCC that they are purchasing several orders from several venders, and want them to collect the goods and ship them under one House Bill. The “US NVOCC” relays the various venders’ information to their “Foreign NVOCC” office for cargo collection. The “Foreign NVOCC” picks up all the goods from 3 different venders and prepares a House Bill of Lading. Since there will be three different venders, who should be shown as the shipper(s)?
Answer: For each shipment that does not
contain the same shipper and same consignee information it must be identified
on its own bill of lading. For
example:
1st bill of
lading - 1st vendor or factory is the
shipper - U.S. customer is the consignee
2nd bill of
lading - 2nd vendor or factory is the shipper
- U.S. customer is the consignee
3rd bill of
lading - 3rd vendor or factory is the shipper
- U.S. customer is the
consignee
Each shipment
will be identified in AMS under their own bill of lading but, in most cases,
listed in the same container.
C) Will Customs allow
multiple shippers on one bill of lading?
If so, what is the proper format for the bill of lading? Will Customs accept multiple manufacturers
I.D's on one bill of lading in lieu of separate addresses?
Answer:
Customs will not allow for
multiple shippers or multiple consignees on one bill of lading. For every shipper/consignee relationship a
separate bill Bulk and Break
Bulk Cargo:
Proper reporting of NVOCC bills of lading on entry/entry summary.
Answer: It has come to our attention that there is some misunderstanding by the import brokers and importers on how to report NVOCC ocean bills of lading on Entry/Entry Summary.
Under the new
24-hour manifesting rules, NVOCCs have been allowed to participate in the ocean
automated manifest program. Automated
NVOCCs are required to transmit their traditional house bills of lading as
master bills using their own SCAC codes.
These bills are being handled in AMS exactly the same as slot charter
bills, or vessel sharing agreement bills.
If an NVOCC is an operational AMS participant, it is imperative that
brokers and importers report those bill of lading numbers as master bills of
lading on their Entry/Entry Summary transmissions and documentation. Do not report them as house bill numbers and
do not report any bill numbers issued by the actual carrier.
In addition, use the NVOCC SCAC as both the issuer and carrier codes, do not report the actual carrier’s SCAC in either location.
Failure to properly report automated NVOCC bills of lading will result in the creation of AMS shell records, and may cause delays in obtaining release of freight.
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