New Customs Regulations Require a Global Trade Management Strategy

In yet another step in the emerging homeland security strategy for global trade, U.S. Customs implemented the 24-hour vessel manifest rulewhere shippers are required to present an accurate cargo declaration of ocean container freight being shipped from foreign ports to the United States. Under these regulations, more detailed shipper, consignee, cargo, and container seal data is required to be provided electronically to Customs 24 hours prior to loading at the foreign port. Enforcement will commence on Feb. 1 and failure to comply could result in financial penalties to the shipper, carrier, or both. Modifications to documentation en route will increase the likelihood that the cargo will be targeted as a high risk causing delay at the port of discharge. Companies that have embraced lean supply chains are most susceptible to this significant change to the normal course of business.

To meet this new demand, companies will need a uniform process by which freight and documentation is managed effectively. Already an issue being addressed by U.S.-based C-TPAT shippers and carriers, all companies that conduct trade with the United States will need to improve their global visibility, asset tracking, and documentation capabilities. The most efficient means to achieve this is through the reevaluation of your business process, including the impact on make, source, and deliver functions. While the core adjustment will be to your global trade management capabilities, ancillary benefit will be derived to the complete supply chain through synchronized data that improves overall efficiency and reliability.

Technology vendors are prepared to provide the tools for it. While each user has unique requirements to best meet these regulations, best-in-class organizations will use a collaborative network environment of supply chain event management (SCEM), international trade logistics (ITL), transportation management systems (TMS), and financial service capabilities. No one vendor today has all these capabilities. Qiva, BridgePoint, GT Nexus, and such vendors have strong ocean competence, which allows users to use their different strengths as a starting platform and then address the missing components through the introduction of complementary applications, such as from ITL vendors Open Harbor, NextLinx, and Vastera or asset tracking vendors, including Savi Technologies and WhereNet.

In 2001, PIERS reported that 10.9 million sea containers entered the United States, with the overwhelming majority discharged at its eight largest seaports. While some customs functions will be addressed at CSI ports, such as Singapore and Rotterdam, it does not take much effort to identify the potential scrutiny and delay that a high-risk container has upon your supply chain. The legal burden is on the user that must retire manual, less-reliable global trade management processes and institute a more robust framework that improves the end-to-end supply chain.