The following is the first part in a two part series on managing import freight by 3PL consultant, Chuck Intrieri. While Cerasis does not directly offer products and services as an international freight forwarder, our affiliates and partners do, as well as Chuck can lead you to the best international freight forwarder through his consultancy. Cerasis focuses on the freight management for shippers in North America, specifically using freight technology, a TMS, to automate process in the shipment of LTL, TL, and Small Package freight.
An Introduction to the Best Practices in Import Freight
Managing import freight and goods is not a simple task. Importing a single shipment involves dozens of parties and complying with numerous requirements. The complex importing process is complicated further by the evolving requirements of the U.S. Bureau of Customs and Border Protection.
These requirements can have significant impact on a company’s supply chain. Take the 24-Hour Rule, which requires advance manifesting of a U.S.-bound ocean container before it can be loaded at the originating dock. This new rule can add processing fees as well as days to a company’s cycle time.
Here’s what you need to know to optimize imports and speed cycle time while complying with increased regulatory requirements. Effectively managing imports, requires understanding the three flows that are involved in the process:
- Managing imports depends on effectively managing information.
- Financial transactions are very complex
Understanding fiscal flow means knowing who needs to be paid—including suppliers, customs and tax authorities, 3PLs, packers and others—as well as when and how they need to be paid.
- Understanding the physical movement of import freight means accurately knowing how and where your goods will move, how they’ll be handled, where they’ll be stored, and the costs associated with this.
Every time someone touches your goods, whether loading, unloading, or inspecting them, it adds costs and increases the likelihood of damage or pilferage. You must also watch the condition of your import freight at all importation points
Understanding the physical flow also means having a true picture of timing. If you bring in goods from France via ocean freight, they may be locked in an ocean going container for over 20 days and you can’t touch them.
Know the Rules of Import Freight
In addition to understanding the supply chain implications of international trade, importers also must keep abreast of evolving customs regulations. In the post-Sept. 11 world, customs administration is focused more on security than anything else.
Customs, (renamed the U.S. Bureau of Customs and Border Protection (CBP)), has been moved to the Department of Homeland Security with a mission and goal to protect against terrorism and terrorist organizations, and secondly to protect the flow of legitimate trade.
The foundation for CBP programs such as the 24-Hour Rule is what Customs perceives as the threat that terrorists will infiltrate a legitimate cargo container and place in it a weapon of mass destruction. The means and methods of infiltrating containers exist today. Customs wants potential threats to be identified before they reach ports of entry.
Through its Customs-Trade Partnership Against Terrorism (C-TPAT) program, Customs is asking the business community to help secure the supply chain against terrorism by undertaking self-assessment, using C-TPAT security guidelines, and implementing a supply chain security program. Members of C-TPAT can expect fewer inspections and what Customs calls “an emphasis on self-policing,” rather than on customs verifications.
While becoming C-TPAT certified may take weeks or months, depending on the size and complexity of a company and its imports, investing in certification is well worthwhile.Any company that regularly has import freight and imports goods into the United States and is not participating in C-TPAT is making a big mistake. If your organization doesn’t have the time or resources required to become certified, work with a third party, such as a customs lawyer or broker, to get it done.
Another key program is Custom’s Cargo Security Initiative, under which U.S. Customs officials based in major ports around the world perform risk analysis of shipments before they’re loaded. This process requires having advance information on material that is being sent, as dictated by the 24-Hour Advance Notification Rule.
Vessel operators are required to provide electronic manifest information to Customs, based on the information that’s provided to them by the exporter or importer. In order to prepare the required documentation, carriers mandate that shippers provide them with documentation 24 to 72 hours beforehand.
While the requirement currently covers ocean freight only, depending on what happens in the rule-making that is currently in the works, advance notification may be required for shipments traveling via other modes in the near future. As a result, reevaluate your international transit times to ensure you have built in sufficient time.
What import freight best practices would you share? Tomorrow Chuck will cover some more managing import freight best practices covering more information, supplier importance, your internal team set up, documentation, and what should be included on invoices.